When telecoms operators first started dipping their toes into the Internet of Things (IoT) the idea of a world of objects entirely connected felt a long way off. Originally known as machine-to-machine, the IoT sector has seen significant growth in the last decade and spans several verticals.
It’s challenging to get a firm reading on how many IoT devices are in operation, because there is no 100% agreed term as to what constitutes the “thing” in Internet of Things. Some analysts count any device connected to the internet, including laptops and smartphones, while others restrict their count to “things” outside of the usual platforms.
According to Statista, the number of internet of things (IoT) connected devices worldwide will be 38.6 billion by 2025. The current figure is harder to get a read on – in 2020, Statista said there was 8.74 billion devices in use. But in other Statista reports, the estimates are more conservative – expecting the figure to be around 16.44 billion by 2025.
IoT Analytics offers slightly different figures, estimating the number of IoT devices in use worldwide by the end of 2020 as 21.7 billion. This will hit 30 billion by 2025, the analyst firm estimates.
By 2025, it is predicted there will be 152,200 IoT devices connecting to the internet per minute. So, getting a grip on the actual numbers is difficult – but from all these varying stats we can at least establish one fact: the market is growing.
Market value
The actual IoT market revenue is estimated to be around $212 billion worldwide. Though again, because of the lack of a unified definition of what makes up IoT, there are other figures from different analysts. Fortune Business Insights, for example, estimates the market will grow to be worth $1,854.76 billion by 2028, a CAGR of 25.4% from 2021-28.
Compare this to IoT Forecast’s report, which estimated IoT spending surpassed $1 trillion by 2020 – with consumer spend making up almost three quarters of this.
Business Insider claims that the revenue from IoT exceeded $212 billion worldwide. They also show significant optimism, saying the IoT marketplace will grow to over $3 trillion by 2026. While Bain & Company claims that the size of the IoT market, including hardware, software, systems integration and data services was around $520 billion in 2021.
What is clear is IoT is seeing significant growth. By 2023, Cisco predicts there will be 15 billion in M2M connections. This was 6bn in 2018, with connected home applications expected to be 48% the total M2M connections.
This will also lead to a surge in data collected. The amount of data generated by IoT devices is expected to reach 73.1 ZB by 2025, according to IDC, much of it being generated from smart surveillance tools. It is anticipated that 75% of the 56Bn connected devices worldwide will be connected to an IoT platform, IDC adds.
Driving growth
So what markets are playing the biggest role in driving IoT adoption? Cisco claims the fastest growing sector is connected vehicles, which includes fleet management, navigation, and vehicle diagnostics. This sector will see 30% CAGR from now until 2023.
IoT will also play a key role in the deployment of self-driving cars. Statista predicts that we will see a jump in partially automated vehicles by 2025 when the market will reach $36 billion. Eventually, by 2035 North America will hold 29% of the self-driving fleet, followed by China with 24% and Western Europe with 20%.
However, the smart home remains the biggest market for IoT devices. The global smart home market including automation system that controls the lighting, climate, entertainment, appliances and home security is estimated to be around $126Bn in 2022 and to hit $208Bn by 2026, according to Statista. The firm claims there were 258.54 million smart homes in 2021, which accounted for 12.2% of all homes
A study from Frost & Sullivan revealed that the top 600 smart cities would account for 60% of the global GDP by 2025. Experts estimate that smart cities will surpass $2 trillion in market value by 2025, with artificial intelligence and IoT being the main driving forces.
Another sector where IoT can play a major role is healthcare. Deloitte reports IoMT (Internet of Medial Things) is anticipated to reach $158.1 billion in 2022. The healthcare market for IoT is anticipated to reach $534.3 billion by 2025, according to Grand View Research.
Industrial sectors will also see major growth. Commonly referred to as Industry 4.0, industrial IoT is one of the largest segments for IoT projects, anticipated to reach $106.1 billion by 2026.
So why is IoT adoption growing? Gartner’s research found 63% of organisations that made IoT investments think that they would obtain the expected financial returns in three years.
According to PwC’s IoT Survey, the biggest benefits of IoT for businesses is the gaining of new capabilities (35%) and efficiencies.
Covid shift
One other key consideration is the impact of Covid-19. Much of the reporting and studies into IoT were made in 2020, though the likes of Gartner and Statista have provided results since the pandemic started.
Gartner found, after the Covid-19 outbreak, 47% of organisations are making plans for new investments in IoT and 35% of organizations have reduced their investments.
However, some IoT companies have seen a drop of 50% in new order intake as Covid-19 forced their customers to freeze budgets or delay IT/IoT spending, according to IoT Analytics. This has been compounded by shortages caused by the pandemic, including problems with supply lines for computer chips.
But the impact has been mixed. In 2020, one out of three company decision-makers decided to further invest in IoT adoption within the organisation. However, 41% chose not to increase IoT-related spending during 2020, according to research from Microsoft.
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