Global Internet of Things (IoT) spending is predicted to grow at a compound annual growth rate (CAGR) of 6.9% from 2017 to 2022, reaching a value of $367 billion, according to new research from technology research and advisory firm Ecosystm.
The findings, based on Ecosystm’s semiannual IoT Global Forecast, suggest the Asia Pacific region will become the global center for IoT solutions, growing at a CAGR of 7.4% to account for almost half (48%) of worldwide spend at $177 billion by 2022.
In particular, China is expected to maintain its leading position as the largest country market, beating forecasts for the United States and Europe as it continues to commit spend to smart cities, autonomous vehicles, healthcare and manufacturing.
Indeed, manufacturing is predicted to represent the largest vertical opportunity globally, accounting for $63 billion by 2022.
Meanwhile, health & life sciences ($38 billion by 2022) and retail, distribution & consumer goods ($42 billion by 2022) are forecast to have the fastest growth rates at CAGR 9.6% and 9.2% respectively.
Previously, end-point devices were considered low value elements of any forecast. However, the rise of IoT Edge IT requirements, coupled with AI, machine learning, blockchain, and AR/VR capabilities is driving new, richer hardware configurations. As a result, the study suggests that Hardware will grow at a CAGR of 9.2% to $115 billion by 2022.
On the flip side, contrary to prior industry predictions, the research showed that IoT services will slow down to a CAGR 7.7% as companies are challenged to monetize IoT-only solutions without pulling in the other adjacent technologies.
Vernon Turner, executive analyst at Ecosystm, commented: “In our pursuit to develop an intelligent and connected world, there’s a need for large amounts of data to inform our environments so that they can react and respond to our requirements. IoT is what will feed transformation technologies, such as analytics, machine learning, and augmented and virtual reality, to help us achieve these goals.”
The forecast data has minimized double counting from existing ICT spend that could be reused for IoT projects (e.g. Cloud, Hardware, Network, Connectivity), and net new IoT spend. The forecast also excludes adjacent spending on ICT technology, such as analytics and machine learning, to isolate IoT spend.
First published in Enterprise Innovation