IoT Ecosystem: How the IoT Market will Explode by 2021
Last Updated: December 28, 2020
The IoT (Internet of Things) is growing at a significant pace as consumers, businesses, and governments are recognizing the benefits of connecting inert devices to the internet. A recent report titled ‘The Internet of Things Ecosystem Research’ from Business Insider (BI) states that the number of devices connected to the internet will increase from 10 billion in 2015 to 34 billion by 2020. Cisco’s Trend Report estimates this number to be 50 billion while Gartner Inc. is less hopeful with its estimate of just 20.8 billion connected devices. BI’s report foresees that the global market will witness an investment of nearly $6 trillion in IoT solutions over the next five years and investments made in the next five years are projected to generate $13 trillion in revenue by 2025.
According to BI’s report, businesses are going to be the top adopter of IoT, leaving governments and consumers behind in the race. Businesses will spend $3 billion in the IoT ecosystem and deploy 11.2 billion devices by 2020. On the other hand, governments will spend up to $2.1 billion in IoT and install 7.7 billion devices, while customers will only invest up to $900 million. Businesses are eagerly gearing up to invest in IoT since they can leverage IoT solutions to achieve essential metrics such as: – reduced operating costs – increased productivity – expansion to new markets – development of new products
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IoT is certainly poised to explode by 2021 with such growth projections. With it being labeled as the “next Industrial Revolution”, let’s take a look at fifteen environments using IoT Ecosystem and the projected growth for IoT in them:
The IoT market in intelligent transportation systems is expected to reach $143.93 billion by 2020 at an estimated CAGR of 8.95%. The Transportation Industry will mainly focus on using the IoT Ecosystem to create convenient transportation systems that have greater efficiency, higher reliability, and improved safety, with reduced overall costs and improved service. This will include deploying smart devices as transportation solutions for traffic, asset, ticketing, supervision, operations, passenger information, and maintenance. Connected cars are going to be the top IoT device with over 220 million of them on road by 2020.
Juniper Research has revealed in one of its reports that retailers are expected to spend an estimated $2.5 billion to capitalize on IoT (Internet of Things) technologies. Retailers are already using iBeacon technology worldwide to study customer behavior and engage them accordingly via contextually relevant notifications. It comes as no surprise that Juniper Research projects beacon-triggered coupons to reach 1.6 billion in 2020, while the BI Intelligence report anticipates that beacon-triggered messaging will generate $44 billion in revenue.
IoT is poised to deliver a $1.9 Trillion boost to supply chain and logistics operations. The global connected logistics market is estimated to grow from $5.05 billion in 2015 to USD 20.46 Billion by 2020, at a CAGR of 32.3%.With the adoption of network enabling technologies such as RFID, iBeacon, and integrated IoT platforms, logistics vendors and industrial enterprises are focusing on re-engineering the entire logistics and warehouse management process. It will facilitate and simplify inventory and workforce management, and asset tracking.
Image source: accenture.com The hospitality industry is aiming to benefit from the IoT by utilizing it to enhance the guest experience and increase operational efficiency. According to Hospitality Technology’s 2015 Lodging Technology survey, 31% of hotels already use next-generation door locks, 33% of hotels have room control devices, and 16% have connected TVs. The survey also reports that 15% of hotels use iBeacon technology throughout the hotel infrastructure.
The adoption of IoT may bring exceptional operational efficiency to hospitals and surgical centers in managing day-to-day clinical operations, and tracking hospitalized patients. Markets and Markets predict that the global IoT healthcare market is estimated to grow from $32.4 billion in 2015 to $163.2 billion by 2020, at a CAGR of 38.1 %. According to Business Insider, 646 million IoT devices will be used for healthcare by 2020.
6) Smart buildings
Memoori’s report, that analyses the market for IoT technologies, network, and services in buildings till 2021, predicts that the overall market for systems in buildings will grow with Physical Security, Lighting Control and Fire Detection & Safety representing the three largest segments. The global market for the Internet of Things in Buildings (BIoT) will rise from $22.93 billion in 2014 to over $85 billion in 2020. In the survey conducted by DainTree Networks, 43% of the building managers in the US believe that IoT will have an impact on how they manage and run their buildings.
Image source: blogs.air-watch.com Financial institutions have currently reported an average IoT budget of $117.4 million, which will eventually increase to $153.5 million by 2018. A large amount of this IoT budget will account for monitoring financial products and services. Deloitte’s analysis of IoT in banking suggests that as many as 50% of sensors deployed in 2020 would be of use to Financial Services Institutes. The overall growth in sensor deployments for financial services is expected to range from over 20% to 100% annually on a compounded basis.
8) Home automation
Strategy Analysis reports that the number of households with smart systems will grow from 27.7 million to 46.1 million by 2020. According to Juniper Research, the Smart Home service revenue will reach over $72 billion in 2018, driven primarily by the entertainment segment. Moreover, by 2030, most of the home devices will be connected to the internet. Location-based technologies such as iBeacon have now forged their way into our homes to create ‘smart’ living spaces by enabling a mechanism that controls entertainment units, security systems, home appliances, thermostats, fixtures, surveillance cameras, and more.
9) Food and Beverage
Business Insider estimates that around 310 million IoT devices will be used by food services companies by 2020. The majority of these IoT devices will be digital signs used across grocery stores and fast-food companies. The connected kitchen will contribute to at least 15% savings in the food and beverage industry via big data analytics by 2020.
Image source: blueapp.io The smart agriculture market is expected to reach $18.45 Billion in 2022, at a CAGR of 13.8%. BI estimates that 75 million IoT devices will be shipped for agricultural uses in 2020, at a CAGR of 20%. IoT devices can be of great help in enhancing the production and yield in the agriculture sector since these devices can be used to monitor soil acidity level, temperature, and other variables. Moreover, smart agriculture will help in monitoring livestock productivity and health as well.
According to SMA Research Survey, 74% of insurance executives believe that IoT will disrupt insurance services within a span of the next five years. Also, 74% of insurance executives plan on investing in planning and implementing IoT strategies by the end of 2016. Several factors like insurers looking to cut costs, improve business practices, and better assess clients’ risk levels, will increasingly push the investment in IoT devices such as free fitness trackers and drones. In fact, consulting firm Cognizant estimates that devices such as drones will make insurance adjusters’ workflow more efficient by 40% to 50%.
Internet of Things enables us to derive information about most things and rather turn almost any object into a source of information about that object. This makes IoT devices critical for Defense Industry. Asset Tracking and Inventory Management are some of the major concerns that can be tackled via IoT. BI estimates that the spending on devices such as drones will reach $8.7 billion by 2020. In addition, research giant Frost & Sullivan predicts that 126,000 military robots will be shipped by 2020.
BI report projects that municipalities worldwide will increase their investment in IoT devices from $36 billion in 2014 to $133 billion in 2019, at a CAGR of 30%. This investment will generate $421 billion in economic value for cities worldwide in 2019. Additionally, the IoT in the smart cities market is estimated to grow from $51.96 billion in 2015 to $147.51 billion by 2020, at a CAGR of 23.2%. The factors driving this growth would be modern human settlements with smarter utilization and deployment of available resources, along with transportation and modern communication infrastructures.
The global IoT in the utility market is estimated to grow from $4.63 billion in 2015 to $11.73 billion by 2020 at a CAGR of 20.4%, according to Markets and Markets. IoT is expected to bring exceptional operational efficiency to the utility sector as it can provide more visibility in the challenging operational environment, along with increasing cost efficiency, reliability, and safety. The application of IoT in the three different areas of utility, namely water, gas, and electricity, are also taken into account. For instance, energy companies are predicted to install 1 billion smart meters by 2020 in an effort to meet the rising demand for energy.
Image source: windows10update.com The IoT in the manufacturing market is estimated to grow from $4.11 billion in 2015 to $13.49 billion by 2020, at an estimated CAGR of 26.9%. According to PwC, 35% of manufacturers already use smart sensors. 10 % of manufacturers plan to deploy IoT devices within a year. 8% of manufacturers plan to deploy IoT devices within three years.
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Research firm IDC’s report confirms that the worldwide IoT market is poised to grow to $1.7 trillion by 2020 with a CAGR of 16.9%. One of the primary developments in IoT is the emergence of location-based technologies such as iBeacon. With such an inexplicable growth insight, it is hardly surprising to see huge investment going into it. Businesses must watch the IoT and Beacon space closely to see what’s in store for them in it!
If you think we have missed out on an environment that will be visibly impacted by IoT, please share your views in the comments section.
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