Economic Benefits of IoT

The rapid development of the Internet has led to the "connectivity of everything", which is gaining momentum as a popular social development trend. The progress achieved in both technological and application fronts is the central focus of all industries. In recent years, smart home and intelligent government administration have been realized with the help of IoT. Vehicles and facilities such as household water meters and street lamps have been connected to the network. A number of people say that IoT favors things only. However, this is very far from the truth. Since one year ago, in the field of agriculture, animal husbandry has begun to seek connection of livestock to the network. Connected livestock such as cattle and other similar examples are now attracting particular interest and currently have the full attention of the industry. Today, we will take the opportunity to have a look at how cows are connected to the network.

A huge gap in milk production between China and developed countries calls for smart cow breeding.

According to statistics, China's milk production has been increasing since 1978. The increase accounts for more than half of the global increase, enabling China to rank the third in the world in terms of milk production. By 2015, China had amassed an abundance of 14.69 million cows to produce milk. Although the quantity of cows on hand quickly increases, the milk yield per cow is lower than that in developed countries. For example, the milk yield per cow per year is 11.8 tons in Israel, but is only 2.5 tons in China. The low level of production directly restricts the revenue growth for dairy farms.

As it stands, small- and medium-sized dairy farms currently in China rely on farm workers to detect cow estrus (period of fertility of many mammals), the detection of which is crucial for high milk yield. Timely mating can be arranged for cows during this period, allowing for uninterrupted milk production. Therefore, it is of the upmost importance for dairy farms to quickly and accurately monitor cow fertility. If a cow is not closely supervised, only medicine treatment can be used to compensate for the detection failure. This not only increases costs but also harms the health of cows and reduces the quality of milk supplied. No matter how experienced the farm workers are, it is still difficult to accurately detect the status of each cow within a large herd. Therefore, missing detection of cow fertility can often occur. The accuracy rate of traditional manual estrus detection is only 75%, which greatly reduces the milk yield. If one estrus cycle (21 days) is not detected, the dairy farm will potentially lose 2,268 RMB based on the assumption that a cow yields 30 kilos of milk a day (one kilo of milk sells for 3.6 RMB).

Over the years, dairy farms have been trying to solve this challenging problem. However, traditional solutions are inefficient due to issues such as high power consumption, complex installation and cabling, high fault rate, and expensive overall costs. Nowadays, smart cow breeding has emerged as a recognized development trend in the industry. New ICT-based IoT solutions can increase the cow estrus detection rate to 95%, increasing the rate of conception and milk yield in dairy farms.

NB-IoT helps detect cow estrus easily.

As a representative of next-generation technologies, NB-IoT serves as an important foundation for smart cow breeding. NB-IoT offers real-time cow information such as activity, temperature, and pulse. This crucial information can then be used to conduct a thorough big data analysis to determine cow estrus. Increases in milk yield, reduced labor and medicine treatment costs, and increases in the revenue of dairy farms are the most exciting benefits of this technology. This technology has also received close attention from dairy product enterprises and animal breeding initiatives.

Starting from March 2017, China Telecom and Huawei had begun to discuss cost-effective and feasible new solutions dedicated to the issues encountered by dairy farm owners. In the selected solution, smart wearable collars are used to monitor the temperature and pulse of cows, and then monitoring information is sent to the cloud through NB-IoT base stations. Users can easily access this information, which is viewable online via PCs and mobile phones. Dairy farm owners can now easily obtain information about the cows from any location. The launch of the "Connected Cow, Cash Cow" project was officially released in October 2017, with pilot tests beginning in Inner Mongolia, Ulanhot, Ningxia, Hebei, and Anhui.

The Connected Cow solution features the following advantages:

  • Low power consumption, massive connection, and wide coverage. This solution uses NB-IoT as its core communications technology and naturally can enjoy a myriad of inherent advantages accompanying such technological advancements. This solution allows for less power consumption of sensors than traditional methods, enabling a single battery to operate for over five years. A single NB-IoT base station supports network connection ranging in the thousands. In addition, this solution can ensure signal coverage over a much larger considerable area compared to other existing options.
  • Stable device performance. The NB-IoT sensors used in this solution can withstand severe outdoor temperatures ranging from –30°C to 45°C. This is able to meet high-level durability and shielding requirements of ingress protection 65 (IP65), describing protection of electrical devices against water, dust, and physical damage.
  • Cost-effectiveness. As long as there is NB-IoT network coverage, neither dedicated power supply lines nor RFID base stations are required. Therefore, line and node maintenance is not involved, helping to limit future O&M costs.

Dairy farm owners see great potential of connected cows to generate cash.

The sharp growth of any technical innovation or solution relies on its contribution to business profits. In terms of the business models of smart cow breeding solutions, most products require one-off payment after cost-based pricing. In the business model of the Connected Cow solution, dairy farm owners are required to buy the entire set of devices at 290 RMB per set, which is only one third of the average price of other products of the same type. Then, each set of devices is charged an additional 60 RMB for software and traffic each year for five consecutive years. Based on current market responses, the business model is well received and accepted. In the future, more value-added services can be provided to gain more considerable profits.

The current business model helps reduce the initial investment pressure for dairy farm owners, deepens the cooperation between the industry and the operator, and effectively improves economic return, while promoting information-based, smart development of animal husbandry. In the future, the data of the cloud-based monitoring system used in the Connected Cow solution will provide related industries with important support, for example, source-tracing of milk quality. Data monetization will drive future decisions for operators to transform their business models and develop more innovative services.

Nowadays, "connectivity of everything" is breaking down the once isolated information islands of vertical industries. It connects various devices, services, and roles such as producers, consumers, operators, and schedulers to promote the development of large-scale industry applications, creating new industry environments for increased service value. In addition, the data aggregated by platforms can be used to explore potential values of everything, allowing for the development of more applications that can bring added comfort and convenience to people's daily lives and work.

In an era when connectivity becomes the norm, Huawei always continues to focus on customers' requirements to help operators construct an object-oriented optimal experience. This is accomplished through greater collaboration with global partners to promote the "connectivity of everything", working together towards a prosperous win-win IoT ecosystem, and sharing in mutually beneficial joint-achievements to expand the industry.