Source: IHS; Forbes
Internet of Things (IoT) was touted as the industry’s next big thing for the last half-decade with as many as 100 billion connected devices counted as part of the connectivity revolution. A more conservative estimate puts the number of active IoT devices at almost 27 billion. The numbers are still growing and are expected to hit 75.44 billion by 2025.
North America leads with a market revenue of $194 billion for 2019. Revenues came from electronic device imports, which America also leads, and smart city implementation. Asia Pacific, led by China, follows next with $182 million coming from smart city implementation and smart agriculture.
Top company decision-makers believe IoT will bring revenue and is important for their business but are not quite sure of the exact definition of IoT. Without clarity, project implementation is delayed and the possible benefits derived for the business do not see full fruition. Other reasons for hesitance in IoT adoption are data privacy and security breaches.
This article explores the number of IoT devices installed worldwide, the use cases and industries that benefit from IoT use, the revenue generated by IoT, security concerns on IoT adoption, and a look at the trends shaping the industry by digging deep into the categories below:
Leading IoT markets include the US, China, and the mature markets of Western Europe and the Asia Pacific region. As with trends associated with APAC, the region is forecast to also lead in spending and adoption in the global market. Market projections estimate China will make up two-thirds of the APAC region’s industrial IoT market by 2025.
The US was an early adapter and leads the list of countries with IoT deployment. A strong startup culture with a focus on providing IoT solutions coupled with funding from venture capital firms with strong technology thrust has helped propel the country as the global leader in IoT projects. Strong government support and legislation have pushed 2019 IoT connectivity spending to $194 billion in the US.
The majority of the countries are EU members who have strong IoT regulations and infrastructure due to foresight and planning on the government’s part. The EU had invested close to €500 million in IoT-related research, innovation, and deployment.
Singapore is the leader among countries with strong IoT readiness in the APAC region while Japan has long had high IoT-readiness and is transitioning to strengthening security strategies for the country’s IoT infrastructure and protocols.
Three countries made a mark with IoT spending and investments in the APAC region in 2019—China, Japan, and India. Spending is focused on smart city planning and implementation, connected industries, and AI-assisted farming.
The UK and Germany lead the IoT market in Western Europe with a market share of 23% and 21% respectively. The six-year growth rates for both countries are robust—9.53% for the UK and 10.52% for Germany. The UK has a strong record on IoT-related technology inventions while Germany is heavily investing in the manufacturing industry.
Many people are familiar with IoT technology for the consumer market. These consist of wearables, voice-enabled assistants for the home, and smart-car technologies. By 2020, it is estimated each individual will own 6.5 connected devices. Due to the familiarity and the ease with which these consumer electronics are bought and deployed, consumer product spending is double the combined spending for cross-industry and vertical-specific businesses spending combined.
Internet-of-Things technology goes beyond the home and consumer goods and encompasses processes that help manufacturing, industry, and energy sectors perform more efficiently and lessen operational expenses. Research done by IoT Analytics found enterprise IoT projects were primarily motivated by cost-reduction rather than revenue increase.
It is estimated there are over 900 applications for IoT in the enterprise market. Research suggests there was a 93% IoT technology adoption rate among enterprises. But progress is still slow. Industries that lead in IoT spending include discrete manufacturing, fleet management and logistics, and energy utilities. These three business verticals are projected to spend $40 billion each to invest in IoT platforms, hardware, and services.
Benefits derived after IoT deployment can be found in the performance areas of efficiency, profitability, and innovation. Twenty-nine percent of executives surveyed prior to the implementation of IoT strategies had conservative estimates of efficiency. Post-project audits showed a 49% increase. The same is true for profit gains with only 16% of executives setting higher expectations in profit gains. Results show a healthy 32% profitability increase. The healthcare industry is inherently innovative and consistently seek new ways to further innovate its processes and products. Over 60% of the healthcare industry already use IoT and report an 80% increase in innovation since adopting IoT technology.
The retail sector lags with less than half of the industry employing IoT protocols. Of those that do, 51% report an increase in positive customer experience while 88% says IoT boosted business efficiency.
Governments have the lowest adoption rates at just 4 in 10. The lack of understanding among government decision-makers impedes implementation. Another challenge that needs hurdling is integrating legacy systems to newer platforms. Governments are moving forward with IoT adoption as 7 in 10 early adopters cite cost-savings and better organizational visibility as major advantages.
Internet-of-Things (IoT) adoption is the rule rather than the exception for businesses in 2019. The global IoT market was worth $212 billion in 2019 with revenues expected to reach between $1.1 to $1.6 trillion in 2025. Year-over-year (YoY) market size growth projections have an average of 40.79% with the largest gain forecast to hit in 2021.
A compound annual growth rate (CAGR) forecast of 34.89% for 9 years from 2017 to 2025 ensures steady growth. Initial investments in connectivity will dominate the early years of the digital industrial transformation. Initial deployment roll-out focused on installing endpoints and providing connectivity across platforms and devices. Succeeding years will be driven by applications, platforms, and services and makes up double the revenue forecast for connectivity and professional services.
Top barriers to IoT adoption have been previously mentioned and include a lack of understanding of what IoT is and how its benefits translate to economic gains. The fear is compounded by a high financial outlay to upgrade existing systems with no clear standards in place to regulate interoperability.
Other barriers that top the list are privacy concerns and data breaches. Eighty-four percent of IT decision-makers admit to having experienced IoT-related breaches.
Despite the fears and misconceptions, 90% of enterprises, industry, and healthcare have started using IoT technology in 2019. Kevin Ashton, who coined the term “Internet of Things,” eases the resistance and fear of IoT deployment by seeing it as an opportunity to take advantage of setbacks and seeing it as an opportunity:
“When an initial Internet of Things deployment uncovers new opportunities, it is relatively easy to expand the system to take advantage of them. There’s no need to say, ‘I wish we had thought of that when we designed this thing.’ If you want to turn your great Internet of Things navigation system into a tool for helping business customers manage their fleets more efficiently, or for predicting where to find parking spots, you probably can.”
Internet-of-Things in 2019 saw adoption rates across industries rise with as much as 9 out of 10 deploying a form of IoT technology. As with any new technology, standards are still shifting and new advancements are rolled out and tested. Some trends shaping the IoT industry include the Fourth Industrial Revolution, adopting a standard messaging protocol, and smart offices.
Industrial IoT as the Fourth Industrial Revolution – Industrial Internet of Things (IIoT) is an application of IoT in the manufacturing and energy industry sectors. IoT in the form of sensors, endpoint devices, and software will streamline industry processes, collect and analyze huge streams of data with better accuracy and fewer rooms for errors, and ensure higher productivity and efficiency reflected in business revenue gains.
More smart offices for a streamlined workplace – The functionality, savings, and energy efficiency of a smart home are carried over to smart workplaces. More than managing device connectivity, smart offices will make communication and collaboration simpler. AI automation can monitor temperature, lighting settings, even noise levels for a conducive work environment. Data-driven strategic decisions on operational costs, workforce management, and facilities management streamline processes crucial to proficiency and profitability.
A single messaging protocol to bridge platform fragmentation – A quarter-century-old communication protocol is presented as the answer to fragmentation and varied bandwidth availability of IoT devices. MQ Telemetry Transport. ( MQTT), an open-source communication protocol, is gaining traction as the standard messaging protocol for IoT tech as it uses low-power and two-way connections between devices.
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