Worldwide spending on the Internet of Things (IoT) technology is expected to surpass the $1 trillion (€875 billion) mark by 2022, according to a new forecast from research company IDC.
The research company predicts IoT spending will rise 15.4 per cent in 2019 to $745 billion (€652 billion) from $646 billion last year as adoption rises in both the business space and the consumer space.
“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,” said Carrie MacGillivray, vice-president of IoT and mobility at IDC.
The industries that will see the fastest compound annual growth rates (CAGR) in spend over the five-year forecast period are insurance, government and healthcare.
IDC predicts the biggest spend on IoT solutions in 2019 will take place in discrete manufacturing with companies working in the segment expected to shell out almost $120 billion on related technologies. Other high-spending sectors include process manufacturing, transportation and utilities.
Spend will largely be focused on solutions that supports manufacturing operations and production asset management, IDC said.
Smart homes
Consumer IoT spending will reach $108 billion this year, making it the second-largest industry segment. The leading consumer use cases according to IDC 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 per cent.
“Adoption of IoT is happening across industries, in governments, and in consumers’ daily lives. 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,” said Ms MacGillivray.
IoT services will 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 and is expected to record the fastest growth over the five-year forecast period with a CAGR of 16.6 per cent. Services spending will also grow faster than overall IoT spending with a CAGR of 14.2 per cent. IoT connectivity spending will total $83 billion in 2019.
According to IDC, the United States and China will be the biggest spenders in IoT at $194 billion and $182 billion respectively. Japan will be in third place with spend of $65.4 billion forecast. It will be followed by Germany ($35.5 billion), Korea ($25.7 billion), France ($25.6 billion) and the UK ($25.5 billion).
