The Internet of Things (IoT) is poised to be one of the fastest growing segments of the Asia-Pacific technology industry, with spending in the region forecast to reach $56.9 billion by 2020.
Research and analyst firm Frost & Sullivan reported that IoT spending will reach $9.96 billion at the end of this year and will continue to grow at a compound annual growth rate of 34.1% in the coming years.
Andrew Milroy, Vice President, ICT Practice, Asia Pacific at Frost & Sullivan, said factors driving the adoption of IoT in the region include regional government efforts to improve competitiveness in their economies and city planners’ efforts to address social demographic challenges in their cities.
“From a technology perspective, the continued efforts to miniaturize and reduce the cost of sensors mean that sensors are expected to be integrated at the chip level and will be found in almost every device and home appliance," he said. "Furthermore the improved communication infrastructure in the region, coupled with the ready availability of cost effective compute and storage (cloud computing) will help drive development and adoption of Internet of Things.”
Countries that adopted Internet of Things technologies early include Japan, Singapore, China, Australia and South Korea. But Frost & Sullivan believes that countries in APAC like India, Malaysia, Thailand and Indonesia are posed for rapid growth between 2014 and 2017.
“The Asia Pacific region is characterized by a large presence of manufacturing economies and has one of the largest production networks in the world. This is expected to drive spending on Internet of Things applications in telematics and supply chain visibility. Internet of Things spending in the manufacturing industry is expected to be one of the fastest growing markets in APAC, growing at a rapid rate CAGR of 52.7% between 2014 and 2020," Milroy explained.
He added that while IoT spending in logistics and transportation currently contributes to the bulk of IoT spending (and is expected to remain the largest IoT segment in APAC for the foreseeable future), IoT spending in the consumer technology segment is expected to experience phenomenal growth between 2014 and 2017.
Some of the challenges facing the industry that could prevent it from achieving rapid adoption include security and information privacy; lack of standardization and data sharing framework that often results in fragmented and closed IoT ecosystems; and providing sustainable and cost effective power supply to millions (and in the future billions) of connected devices.