IoT News

IDC: Worldwide IoT spending to reach $745B this year

The Internet of Things (IoT) business is sure to rake in billions of dollars in 2019, according to industry research firm International Data Corp. (IDC). Spending which is expected to $745 billion, up by 15.4 percent over the $646 billion spent in 2018, will come from consumer, manufacturing, transportation, and utilities sectors.

IDC’s Worldwide Semiannual Internet of Things Spending Guide, the firm is seeing a steady double-digit growth which started in 2017 and will last until 2022 when the spending surpasses the $1 trillion mark in 2022.

The United States and China will be the global leaders for IoT spending in 2019 at $194 billion and $182 billion, respectively. They will be followed by Japan ($65.4 billion), Germany ($35.5 billion), Korea ($25.7 billion), France ($25.6 billion), and the United Kingdom ($25.5 billion). The countries that will see the fastest IoT spending growth over the forecast period are all located in Latin America: Mexico (28.3 percent compound annual growth rate or CAGR), Colombia (24.9 percent CAGR), and Chile (23.3 percet CAGR).

Data and connected devices

“Adoption of IoT is happening across industries, in governments, and in consumers’ daily lives,” said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC. “We are increasingly observing how data generated by connected devices is helping businesses run more efficiently, gain insight into business processes, and make real-time decisions. For consumers, access to data is changing how they are informed about the status of households, vehicles, and family members as well as their own health and fitness. The next chapter of IoT is just beginning as we see a shift from digitally enabling the physical to automating and augmenting the human experience with a connected world.”

The industries that are forecast to spend the most on IoT solutions in 2019 are discrete manufacturing ($119 billion), process manufacturing ($78 billion), transportation ($71 billion), and utilities ($61 billion). IoT spending among manufacturers will be largely focused on solutions that support manufacturing operations and production asset management. In transportation, more than half of IoT spending will go toward freight monitoring, followed by fleet management. IoT spending in the utilities industry will be dominated by smart grids for electricity, gas, and water. The industries that will see the fastest compound annual growth rates (CAGR) over the five-year forecast period are insurance (17.1 percent), federal/central government (16.1%), and healthcare (15.4 percent).

Consumer IoT

“Consumer IoT spending will reach $108 billion in 2019, making it the second largest industry segment,” said Marcus Torchia, research director, Customer Insights and Analysis. “The leading consumer use cases will be related to the smart home, personal wellness, and connected vehicle infotainment. Within smart home, home automation and smart appliances will both experience strong spending growth over the forecast period and will help to make consumer the fastest growing industry segment overall with a five-year CAGR of 17.8 percent.”

The IoT use cases that will see the greatest levels of investment in 2019 are driven by the industry spending leaders: manufacturing operations ($100 billion), production asset management ($44.2 billion), smart home ($44.1 billion), and freight monitoring ($41.7 billion). The IoT use cases that are expected to deliver the fastest spending growth over the 2017-2022 forecast period provide a picture of where other industries are making their IoT investments. These include airport facility automation (transportation), electric vehicle charging (utilities), agriculture field monitoring (resource), bedside telemetry (healthcare), and in-store contextualized marketing (retail).

IDC says that it expects IoT services to be the largest technology category in 2019 with $258 billion going toward traditional IT and installation services as well as non-traditional device and operational services. Hardware spending will be close behind at $250 billion led by more than $200 billion in module/sensor purchases. IoT software spending will total $154 billion in 2019 and will see the fastest growth over the five-year forecast period with a CAGR of 16.6 percent. Services spending will also grow faster than overall IoT spending with a CAGR of 14.2 percent. IoT connectivity spending will total $83 billion in 2019.

The Worldwide Semiannual Internet of Things Spending Guide forecasts IoT spending for 14 technology categories and 82 named use cases across 20 industries in nine regions and 53 countries. Unlike any other research in the industry, the comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT technologies today.

Image by Gerald Altman/Pixabay

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