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The global Internet of Things (IoT) market size stood at USD 250.72 billion in 2019 and is projected to reach USD 1,463.19 billion by 2027, exhibiting a CAGR of 24.9% during the forecast period.
The Internet of Things includes network connectivity architecture, advanced equipment such as smart sensors and meters, as well as smart devices. It offers an exchange of information between the machines and devices. Globally, the technology has gained significant potential across the industries such as BFSI, healthcare, manufacturing, and agriculture to name a few. It offers digital transformation to the industries and businesses by upgrading their existing process. The associated technologies such as digital twin, artificial intelligence, and 5G infrastructures are boosting the adoption. Areas such as precision farming, smart cities, and E-health are offering significant opportunities for the market. For instance, with the help of precision farming, farmers can gain access to the data provided by the sensors for improving farming efficiency and effectiveness. This technology has a variety of smart farming applications, such as irrigation management, crop observation, vehicle tracking, livestock management, and storage monitoring.
COVID-19 Impact: High Dependency on Novel Technology to Bode Well for Market
Coronavirus is creating an unparalleled impact on people and the economies of the countries. The pandemic has a varied impact on the IoT market. The temporary shutdown of manufacturing, transportation, and automotive industries has affected the adoption of solutions. During the lockdown period, its growth is expected to be steady but sluggish. However, post the lockdown, the industries will need to adopt new strategies in accordance with the guidelines provided by the government. According to the industry experts, the industries across the globe are planning to slowly reopen the production plant; however, the percentage of the workforce is likely to be reduced considering the social distancing norms. This will create high dependency of the operational process on technologies. Considering the “new normal” situation around the world, the enterprises and industries are likely to invest in digital technology. This is expected to boost the adoption of solutions and the market is likely to showcase significant growth post-pandemic.
On the other hand, industries such as retail, BFSI, agriculture, and healthcare were only operational during the lockdown. The market, along with the technologies such as cloud and AI has seen vast applications during the crisis in these operational industries. For instance, in healthcare, to screen the patients, connected thermometers are being used. Kansa Health in the U.S. issuing these thermometers’ reading to gain the data of people with high temperature and in building real-time maps based on the data to show the health of the nearby people. In China, cloud-based wearable connected devices such as rings and wristbands are used to continuously track the patients’ health. In the retail industry, the prolonged effect of social distancing has boosted the adoption of smart retails solution.
The coronavirus infection has created a mixed impact on the industries. During the lockdown period, the growth is likely to be slow. However, it is expected to exhibit a surge in demand post the lockdown period.
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Increasing Trend of Adopting Digital Twin to Accelerate Market Demand Globally
The digital twin transforms the physical assets of the industry into a virtual representation which is useful for remote monitoring, viewing, and controlling the operations. Along with the virtual depiction, the digital twin also provides functional information of the equipment which helps in the operational processes, such as behavior of the equipment, condition of the machine, and real-time dynamics. Digital twin receives information from the physical assets, such as equipment and sensors. Based on that information, it provides prediction and simulation for the operation. Thus, with the help of digital twin real-time information industries can optimize the adoption of technology. With digital twin, organizations get a better view of the information and situation.
The implementation of digital twin requires flexible device management capabilities which are offered by IoT platforms. The platform enables a high level of device and network connection based on the requirements. On the other hand, twin’s devices such as smart sensors are connected to the physical world. It offers real-time data of the assets and equipment of the physical world to the digital twin. This creates a powerful way to monitor and control processes.
The digital twin simplifies working with the technology. This is likely to drive this market growth.
Shift from Traditional Sensor to Smart Sensors is likely to Drive Growth
The advancements and miniaturization have enabled sensors to integrate with smart devices. The application of smart sensors is one of the key drivers for the expansion of the market. The sensors provide measured physical inputs and transform them into raw data, which is then digitally stored to access and analyze for the process. Along with the feature of measurement of input, the advanced smart sensors are now able to transmit information through the internet. This is boosting their adoption in all the connected and smart application such as smart metering, security and emergency services, precision agriculture and farming, home automation, and e-health among others.
The IoT solutions and platform require continuous data from the surroundings for better functioning of the things. This information is provided by the sensors integrated with the things i.e. the connected devices. The smart sensor makes the technology intelligent by predicting and analyzing the collected data from the devices. Instead of just measuring they offer only relevant data which reduces the network load.
The adoption of smart sensors has enabled the platforms to offer more reliable, accurate, and intelligent solutions for the users. Advanced sensing and intelligent data processing have offered automation to the industries and businesses. These factors are driving the Internet of Things market growth.
Growth in Smart City Projects to Boost Adoption of Internet of Things
Smart city solutions provide improved quality of life, digital connection, and increase the efficiency of operation to meet the rising demand of the present and future generations. Today, over half of the population worldwide is living in cities and it is expected to increase exponentially by the year 2050, according to a report by McKinsey.
Considering the increasing issues, several countries have started investing in smart city projects. The advanced technologies can cater to the rising demand in the cities. To provide proper support to the people in cities, real-time data can be helpful in making better decisions and in shaping the overall performance of the city. Owing to this, many countries are heavily investing in setting up smart cities to provide smart solutions and to reduce the everyday challenges.
The proper functioning of the connected devices depends on the adoption of technology, right analysis of raw data into insights, alert and actions, and the mass adoption and usage by the public. For this, the services, solutions, and platforms are one of the key elements for the connections. The IoT and connected technologies can transform cities into smart cities. They can be implemented to gain real-time data and to provide accurate analysis to alert the user and the provider. The technology can be used to improve the operations and it can be applied to gain information, accurate prediction, and more.
For instance, the technology can provide a smart traffic management system by installing connected devices and sensors. It detects and sends real-time traffic volume, road occupancy, and average travel speed of the vehicles by road to the controller. Based on the information pattern of traffic, advance decisions are automated by the platform.
Thus, the rising adoption of smart cities is creating various opportunities for the iot technology.
Security Challenges May Hinder Market Growth
The rapid adoption of Internet of Things is likely to face security limitations and challenges. Security has become a major concern for the businesses and industries. Most of businesses do not have proper security architecture. As massive information is stored and transferred across the network, there is a constant threat of data exploitation. Several industries have experienced attacks on the connected devices and the platform to gain personal and organizational private data. Thus, the rising adoption of connected devices is increasing the concerns over data privacy and safety, which is likely to hamper its demand.
Platform Segment to Gain Traction Owing to its Rising Adoption amongst Masses
Based on component, the IoT market is categorized into platform and solution & services. The rising adoption of connected devices for real-time monitoring and analysis is boosting the demand for its platforms. The platform is a set of software through which the connection is established and the information is shared between various devices and applications. A suitable platform is required to expand the solutions and their ability to connect with everything virtually. To boost the efficiency of the business, it is necessary to implement appropriate platforms. Owing to this, many businesses have started investing highly on the platform. It is referred to as middleware, i.e. it functions as a mediator between the hardware and applications. It thus is essential for establishing a continuous process.
Thus, the rising adoption of connected devices is boosting the need for implementing suitable platforms.
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Device Management Platform Segment to Grow Rapidly Owing to Its Ability to Offer Centralized Management
In terms of platform, this market is categorized into device management, cloud platform, network management, and cloud platform. The increasing number of connected devices on the platform is creating the need to manage many devices. As the demand continues to grow, the industries are facing challenges in maintaining the devices. The device management platform simplifies the management of industries and businesses by keeping a track of all the connected devices and networks. The platform offers information regarding the working state of the devices. It has the ability to detect the errors and remotely manage its working. It also helps to reduce the development and testing time of solutions by automating the device and network administration. This platform helps the industries to expand by providing centralized management and real-time insights of the connected and the integrated devices. This is likely to boost the demand for the device management platform for the forecasted period.
Similarly, cloud has emerged as a crucial component in the solutions. A cloud platform offers capabilities of cloud computing and services. It offers cost-effective services in the long run and provides better security, increased collaboration, as well as disaster recovery solutions. This is boosting the demand for cloud platforms in the market. User centric cloud platform helps to extend resources with the rising volume of data and devices.
Increasing Need of Real-Time Data to Boost Growth of Real-Time Streaming Analytics Segment
In terms of application, the market is segregated into real-time streaming analytics, security, data management, remote monitoring, and network band management.
Data is very important for the solutions to evaluate, control, and analyze the environment and the status of the device. Its application analyzes the historical data from the devices to derive trend and pattern. The crucial use case of data is when it is provided live. Today, IoT applications and solutions are not just used for monitoring, but they are mainly implemented for analyzing real-time data. The access to real-time data can offer accurate predictive maintenance and remote monitoring solutions to the industries such as manufacturing, healthcare, and automotive.
The adoption of streaming analytics is likely to grow as the majority of businesses are focusing on obtaining real-time streaming by processing and correlating data from multiple sources. As the potential of real-time streaming analytics is increasing, various industries are adopting it for various new applications. For instance, in the healthcare industry, real-time analytics offers capabilities to monitor patients remotely, can offer personalized patients’ data, and help to increase the organization’s efficiency.
Also, the quality of care can be raised by providing real-time patients’ monitoring data and rapid responses to the queries. Similarly, in the transportation industry, the logistics companies can detect the chances of engine failure of the vehicles by using smart sensors. These sensors continuously provide live data of the functioning of the engines to detect any abnormal changes. The rising application of real-time data is likely to boost the implementation of real-time streaming analytics solutions.
Rising Opportunities of IoT to Augment its Implementation in BFIS Industry
Based on end-use, this market is categorized into BFSI, retail, government, healthcare, manufacturing, agriculture, Sustainable energy, transportation, IT & telecom, and others.
The BFSI industry is currently showcasing fast digital transformation and mobilization. The banking and services businesses are exploring its opportunities in the financial sector to leverage the high amount of generated data and to reduce the security risks. The solutions and applications have tremendous opportunity in the BFSI sector.
One of the benefits of the technology in BFSI is offering ease of access services to the debit and credit card holders. For instance, the bank can track the usage of the ATM machines in specific areas and accordingly decrease or increase the installation of these machines based on the usage volume provided with the help of the solutions. The solution through the help of the customer data can identify the customer’s business needs and their value chain, which can help the banks to provide precise financial solutions to the customers. The banks can offer customized services to the clients by analyzing the information and recommendation provided by the solutions. This is expected to increase the adoption of this technology in the BFSI industry.
The banking and financial service providers can offer industry specific solutions to the customers by implementing its services. For instance, in the farming and agriculture industry, banks can offer financial support on the output of the farming based on the information provided by implementing its solutions. By depending on the data of output of crops, expected yield, and frequency, the banks can estimate the financial requirements of the farmer. Thus, its rising application in the BFSI sector is likely to boost its adoption in the forecast period.
Asia Pacific Internet of Things Market Size, 2019 (USD Billion)
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The global market is classified across five regions, namely, North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America.
Our research findings suggest that Asia Pacific is set to procure the highest market revenue globally. It offers promising technology to the industries which are gaining traction across the countries. India is likely to showcase rapid growth of adoption in the forecast period. The government of India has implemented its ‘Make in India’ policy and has established the center of excellence of the technology program for the industries and start-ups. Also, the government’s plan to build 100 smart cities in the country will create massive and quick expansion of the market.
China is viewed as the leader in its adoption and application. In the year 2015, the country had established 74 million machine to machine (M2M) service connections, according to the report of GSMA Intelligence. The country aims to expand its industries such as robotics, autonomous and electric vehicles, manufacturing, artificial intelligence (AI), biotech, and aviation under Made in China 2025 Plan, which is likely to boost the demand for the solutions.
With the government support and significant private investments, China’s market has scaled up and delivered substantial economic growth to the county. The mobile operators of the country such as China Mobile, China Telecom, and China Unicom are establishing an international partnership with vendors and manufacturers of the solutions and services to offer advanced connectivity solutions. This is likely to boost the growth of the market in the country. China’s connected car market is also exhibiting significant growth, which will contribute to its high demand.
North America is likely to have the second-highest market revenue. The substantial numbers of players are headquartered in the U.S. With the investment from the government and private venture capitalists, the market has showcased a rising number of start-ups in the country.
Europe is expected to grow exponentially in the forecast period. The European countries are highly investing and focusing on the maximum utilization of the technology to boost the advancement across the industries.
The focus of Europe is to boost the industries and the SMEs to capture the opportunity of digital innovation. This is likely to propel its demand in the region. Germany and the U.K. are expected to gain the maximum market revenue in the region. It has led to significant government and private investments, which, in turn, will drive its application. Similarly, with the Austrian government and the manufacturers’ investment in IoT, the country is likely to gain traction in the forecast period.
The Middle East and Africa would gain traction in the forthcoming period. Its adoption is steadily growing within the businesses and consumers of Saudi Arabia. The government of Saudi Arabia had organized the Saudi International Exhibition & Conference for the Internet of Things in 2019, to focus on the opportunities offered by the technology. In Latin America, Brazil is showcasing rapid growth in the market. The Brazilian National Development Bank is offering financing for the country’s plans, such as smart cities, healthcare, agribusiness, and manufacturing. This is likely to create vast opportunities for the technology and will boost its demand in the near future.
Cisco Systems to Accelerate its Solutions, Security, and Platform Offerings
Cisco Systems is offering multiple solutions of IoT throughout the industries such as manufacturing, transportation, retail, utilities, and more. The company is expanding its product portfolio by offering a variety of solutions such as networking technologies, management, data management, and built-in security. It aims to provide its services to its partners across the industries to help them create and grow their IoT businesses. The company is highly investing in research & development to offer advanced solutions to serve around 67,000 businesses around the globe. Along with the expansion, the company is also focused on providing secured connected devices to boost the adoption. Additionally, it is significantly investing in iot security platforms.
February 2020 –Cisco System introduced machine learning capabilities and better integration between services at its IoT management platform for the vendors and providers. This will identify the anomalies and tackle all the errors before they impact the services. This capability offers control over the devices by enabling the providers to alert the customers about the error or the unused devices.
January 2020 – Cisco System launched its security architecture of securities for the industrial Internet of Things. Across IT and operational technology, this architecture will improve visibility. The security is powered by the company's research and security intelligence group named Cisco Talos.
An Infographic Representation of Internet of Things (IoT) Market
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The IoT market report highlights the leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest IoT industry trends and analyzes technologies that are being deployed by key players at the global level. The report examines various paradigm shifts associated with the transformation of software. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.
Value (USD billion)
Fortune Business Insights says that the market was valued at USD 250.72 billion in 2019.
Fortune Business Insights says that the market is expected to reach USD 1,463.19 billion in 2027.
A growth of 24.9% CAGR will be observed in the market during the forecast period (2019-2027).
Within the platform segment, the cloud platform is expected to grow rapidly during the forecast period.
The rising adoption of digital twin is likely to drive the market
Microsoft Corporation, Amazon Inc., Cisco Systems, Inc. (US), IBM Corporation, Bosch Software Innovations, and Oracle Corporation are the top companies in the market.
The solution and services segment is expected to grow significantly during the forecast period.
The revenue of the market in Asia Pacific in 2019 was USD 98.86billion
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