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The Internet-of-Things is an ongoing revolution in the ICT sector under which there is shift from an “Internet used for interconnecting end-user devices” to an “Internet used for interconnecting smart physical objects that communicate with each other and/or with humans in order to offer a given service”.
The advancements of electronics has enabled miniaturized sensors, processors and communications functionalities to be integrated into everyday objects, making them ‘‘smart’’, such as smart watches, fitness monitoring products, food items, home appliances, plant control systems, equipment monitoring and maintenance sensors and industrial robots. By means of wireless and wired connections, they are able to interact and cooperate with each other to create new applications/services in order to reach common goals.
The Internet of Things (IoT) has now entered into mainstream business use. IoT is transforming a wide range of civilian activities by improving their productivity, efficiency, and profitability. These range from management of power and water resources; effective monitoring and coordination of manufacturing, supply chains and transportation systems; precision agriculture, environmental monitoring; monitoring the performance of jet engines, and improved patient monitoring and disease diagnosis.
IoT technologies have already given rise to a number of landmark applications in sectors as diverse as Industry 4.0, smart cities, smart homes, connected cars, and e-health. The IoT already numbers more than 200 known applications in enterprise settings, but IoT adoption isn’t limited to large companies. IoT technologies have already given rise to a number of landmark applications in sectors as diverse as Industry 4.0, smart cities, smart homes, connected cars, and e-health.
The IoT revolution is exploiting the convergence of ongoing explosive growth of miniaturized sensors, embedded hardware, mobile computing, networking, wireless connectivity, cloud computing, energy efficiency, information management, and Data analytics.
Advanced principal technologies and a proliferation of devices have helped fuel the growth of IoT technologies. Sensor technology—embedded in IoT devices—will continue to become cheaper, more advanced, and more widely available. In turn, this availability and cost-effectiveness will make new sensor applications possible, including large-scale monitoring and detection. Meanwhile, computing power has increased about 100 times in the past 15 years. Applications such as real-time analytics and artificial intelligence can thus shift activity from local devices toward cloud and edge computing solutions. In addition, improved mobile connectivity with the advent of 5G will allow new applications for experiences such as augmented and virtual reality.
Managing and analyzing data collected by IoT devices will help maximize its value for the company. Data analytics help in the analysis of IoT data in several areas, such as data accuracy in time series, predictive and advanced analytics, data preparation, geospatial and location real-time. Major cloud vendors such as Amazon, Microsoft, and Google are increasingly using data analytics for business improvement, and various companies hope to expand their market share with AI algorithms capable of exploiting machine learning and deep learning, allowing businesses to derive more value and make informed decisions from the increasing data volumes.
They will offer new opportunities for identity theft, disruption, and other malicious activities affecting the people, infrastructures and economy. 2022 IoT trends reveal that the most common concern of users and developers is regarding security, particularly ovecoming challenges and issues connected to it. In 2021, there were 1.5 billion cyberattacks focused solely on IoT devices. Experts are exploring blockchain technology and end-to-end solutions to help protect user privacy.
Market Growth
The global internet of things (IoT) market size was valued at USD 384.70 billion in 2021. The
market is projected to grow from USD 478.36 billion in 2022 to USD 2,465.26 billion by
2029, exhibiting a CAGR of 26.4% during the forecast period.
There are expected to be more than 64B IoT devices worldwide by 2025. By the end-2022, 29 billion devices will be on the IoT network. The 5G network will allow organizations to enter new markets and create new revenue streams.
By 2022, 100% of the global population is expected to have LPWAN coverage. Low-power, wide-area networks allow long-range communications among a large number of connected devices at optimized costs and power consumption rates. In 2017, only 20% of the world population was covered by this type of network. Many other advances are helping reduce costs and power requirements to help faster IoT adoption.
The ongoing large-scale deployment in China is the main factor behind the almost doubling of the forecast for the internet of things mobile market. Of the 3.5 billion cellular IoT connections, expected to be present in 2023, 2.2 billion are anticipated to be active in North East Asia.
Another example is the cost of lidar sensors, essential for autonomous driving, which have become 10 times cheaper in the last decade and are expected to get several times cheaper still in the next few years.
IoT has the potential to generate $4T to $11T in economic value by 2025. The main revenue driver for 54% of enterprise IoT projects is cost savings. the greatest contribution is expected to be from factories ($1.2 to $3.7 trillion), followed by smart cities, health care, retail, non-urban outdoor environments, custom production environments, automotive, home, and office.
The industrial internet of things (IIoT) market could add $14.2 trillion to the global economy by 2030. The top drivers of IIoT growth according to Accenture, include improved operational efficiency, improved productivity, creation of new business opportunities, reduction in downtime, and optimization of asset utilization.
Discrete Manufacturing, Transportation & Logistics, and Utilities industries are projected to spend $40B each on IoT platforms, systems, and services. B2C commerce will be spending $25 billion on IoT software and platforms within the next two years. Health care is projected to be spending $15 billion, as are process industries.
The wearable devices market will be worth $1.1 billion by 2022. With LTE, WiFi6, and 5G expansion continuing to be a reality, wearable technology adaptation is becoming widespread. There have also been vast developments in crucial technologies like augmented reality, next-generation telepresence, and virtual reality, which has helped with the wearable technology evolution.
The IoT in banking and financial services market size is expected to grow to $2.03B by 2023. The global utility IoT market is expected to hit $129.1 billion by end-2032—with an 11.9% compound annual growth rate (CAGR). Since this sector continues to receive steady support from several governments, market revenue is expected to hit $41.8 billion by end-2022.
The main revenue driver for 54% of enterprise IoT projects is cost savings. Only 35% of IoT projects are used to increase revenue (e.g., by offering new IoT-connected products and services). 24% of projects also increase overall safety (e.g., by offering enhanced monitoring systems with real-time alerts and notifications).
A more granular study of the main purpose for deploying enterprise IoT found that while cost reduction might be the priority in USA, UK, France, and Australia, in other countries the top goal cold be increasing competitiveness (China, S. Korea, Italy, Mexico), improving business processes (Germany, Japan, Brazil), or improving customer experience (Spain).
Sector-wise break-up of manufacturing shows that the reliance on IIoT applications is the highest in power and energy (64%), aviation and aerospace (62%), and utilities (58%). This survey by GE also found that investment costs are the biggest barrier to preventing faster adoption of IIoT in manufacturing. 97% of organizations feel there are challenges to creating value from IoT-related data.
Drivers
The major factors fueling the Internet of things market include access to low-cost, low-power sensor technology, availability of high-speed connectivity, increase in cloud adoption, and Increasing use of data processing and analytics. Moreover, increase in smart city initiatives worldwide, increase in connected devices to drive the growth of IoT, and emerging 5G technology to help IoT adoption, globally would provide lucrative opportunities for IoT vendors.
In terms of average implementation percentage of high potential use cases by industries, telecom is the leader at 36%. High potential use cases in telecom include monitoring of inventory, remote monitoring and management of telecom base stations, and environment monitoring for telecom equipment.
Other leading sectors are industrial manufacturing (33%; production asset maintenance, manufacturing intelligence, and product quality optimization) and consumer products (27%; manufacturing intelligence and monitoring shipment conditions).
Rising Smart City Initiatives to Bolster Growth of Market
Smart home remains the biggest market for IoT devices. 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.
With increasing population and urbanization, many countries across the world are initiating smart city projects and adopting smart city solutions to manage the resources. Connected devices, including sensors, smart light, smart meter, among others, help in improving the functions and efficiency of infrastructure and related services. The global smart home market including automation system that controls the lighting, climate, entertainment, appliances and home security.
In smart cities, IoT assists in traffic decongestion by use of electric aircraft (eVTOL). It contributes in climate change control by helping cities discover new ways of getting energy as opposed to using fossil fuel.
The rising number of smart homes and buildings, smart infrastructures, smart manufacturing, and Industry 4.0 projects are expected to create a huge transformation in business areas, thereby accelerating market growth.
For instance, According to July 2021 White & Case LLP report, Saudi Arabia is constructing four
major smart cities, NEOM, Qiddiya, the Red Sea Project, and Amaala, each with multibillion-dollar building contracts. According to revealed designs, the biggest of these developments is NEOM, a planned USD 500 billion megacities that would include a zero-carbon hyper-connected city. Additionally, smart city solutions, such as smart utility meters, smart grids, smart air quality
controllers, smart waste management, and smart transportation are being increasingly
adopted by consumers, thereby increasing the market potential of connected devices
worldwide
Automotive Industry
The application of IoT in various industries, such as the automotive industry, is driving the growth of the global IoT market. Cisco claims the fastest growing sector is connected vehicles, which includes fleet management, navigation, and vehicle diagnostics. IoT offers enhanced communication, control, and data delivery at any transportation point. IoT will also play a key role in the deployment of self-driving cars.
Major companies like Mercedes-Benz, Volkswagen, Volvo, Toyota, and Google Inc. are increasingly investing in developing smart cars with rich features that offer healthier, more convenient, and more enjoyable driving experiences. According to UBS, 12% of the total cars sold in 2030 will be for autonomous taxi fleets, with 26 million driverless taxis in operation worldwide, approximately.
The Internet of Medical Things sector is estimated to reach $158 billion by 2022.
Patient monitoring is the number one use of IoT in the health care sector, followed by remote operation and control and location-based services. Executives here mention increased innovation as the top benefit from IoT, along with high numbers for organization visibility and cost savings. Energy meters, X-rays, and imaging devices also make use of IoT.
For these reasons, experts predict a $158 billion valuation of the IoMT sector in 2022, up from $41 billion in 2017. The recent COVID-19 crisis has hastened the process of hyper-growth of the industry.
Driver: Access to low-cost, low-power sensor technology
Sensors are the most important components in IoT devices. They help in generating information
about a physical event or state. Sensors can measure everything from their surroundings, including orientation, motion, light, sound, humidity, and temperature to biometrics, such as blood pressure and heart rate. These sensors will drive the practicality of the IoT across industry verticals for various application areas. Additionally, continued innovation in sensor technologies is expected to further expand IoT capabilities.
The cost of certain low frequency passive categories of Radio Frequency Identification (RFID) tags and sensors has decreased significantly in the past decade. Additionally, the average cost of sensors has decreased from USD 1.30 per unit in 2004 to USD 0.38 per unit in 2020. As the IoT market matures, the widely deployed and low-cost sensors and devices are less likely to be viewed as technological advancements
Restraints
The Russia-Ukraine Conflict Is A Significant Market Restraint
The ongoing war between Russia and Ukraine is expected to impact the overall information and communications technology (ICT) market, with sanctions and other measures levied upon Russia by the United States, the European Union (EU), and other countries. The war could lead to a possible shortage of semiconductors, with chip-reliant industries like the Internet of Things being impacted as well. Both Russia and Ukraine are among the top suppliers of essential semiconductor raw materials, with Russia supplying nearly 44% of the world’s palladium and Ukraine producing 70% of global neon supplies. The shortage of chips could translate to lower production output and higher operating costs, leading to higher product costs.
Security Concerns
Internet of things technology has numerous applications, ranging from gathering biometric
data via wearable devices to controlling connected equipment via communication
networks and cloud platforms. These devices have unique IP addresses that allow them to
communicate and exchange information with other devices.
However, as the number of connected devices, smart devices, mobile devices, and
platforms grow, so does the need for data protection and privacy. These devices and
networks could include sensitive and personal data that attackers could use. Data
exploitation may emerge as a result of the rising reliance on connected devices, reflecting
design flows and the vulnerabilities of connected devices.
Various data protection enterprises are developing a range of solutions. However, due to
the market’s framework and ecosystems complications, 100% data security is presently not
achievable. For Instance In December 2020, the U.S. introduced cybersecurity regulations to secure all potential devices from hackers. The IoT Cybersecurity Improvement Act of 2020 has
provided robust infrastructure for the country’s security and created awareness
Restraint: Lack of advancements in communication technology Technology advancements and operational efficiency are the key factors responsible for the successful functioning of IoT.
Various countries in Asia Pacific, Middle East & Africa, and Latin America suffer from the unavailability of basic technologies, such as telecom and networking infrastructure, and are not able to rapidly implement smart projects due to various factors, such as low budget and low literacy rate. The 4G technology in several countries is yet to be mature or even introduced, whereas countries, such as China, have completed their trials on the 5G technology.
Though the governments and enterprises of such countries are aware of IoT technology benefits
and huge RoI from the market, the initial budget constraint plays a key role in lowering the
development of the Internet of Things market in such countries. Even developed countries, such as those of Europe and North America, face difficulties replacing their legacy infrastructures with new and smart ones.
Opportunity: Increase in connected devices to drive the growth of IoT
Internet connectivity and connected devices present organizations with tremendous opportunities to extract relevant data, such as consumer behavior in retail outlets, for real-time marketing analysis, sensor-driven decision analytics, and instantaneous control response in complex autonomous systems. IoT connects companies and governments with all smart prospects, such as smart cities, smart transportation, and smart utilities, and enables them to get location-based data in real-time. Additionally, the high-speed network connectivity has created opportunities for various sectors, such as energy, healthcare, transportation, and other utility sectors, for better monitoring and efficient management of the entire infrastructure. The healthcare sector has already initiated the implementation of IoT across application areas, including remote consultation and monitoring, virtual health kiosks and portals, and electronic personal health records. The energy sector deploys IoT
Blockchain Technologies to Shape the Future of Internet of Things
Data management is one of the most important aspects of internet technology. Internet-connected devices accumulate immense amounts of data and information for processing.
However, the internet of things standard security gateway raises numerous security and privacy difficulties. The blockchain-based architecture provides linked devices with minimal
and decentralized security solutions. For instance, In freight transportation applications, moving freight is a complicated process involving many parties with varying priorities. An IoT-enabled blockchain can record the arrival times, the status of shipping containers, temperatures, and position, when in a movable state. Similarly, in the component tracking and compliance application, IoT data kept in shared blockchain ledgers allows all parties to track component provenance throughout the product life cycle.
SEGMENTATION
By Component Analysis
Rising Demand for Efficient Connected Devices Platform to Drive Market Growth
On the basis of components, the market is bifurcated into platforms, and solutions &
services. The platform is sub-segmented into device management, cloud platform, and network
management. The solution is categorized into real-time streaming analytics, security, data
management, remote monitoring, and network band management.
Platform is expected to grow at the highest CAGR owing to the rising demand for effective
platforms for downstream data servers and enterprise application connectivity. The
worldwide business enterprise rapidly adopted new internet of things technologies and
platforms during the COVID-19 pandemic.
However, solutions and services are expected to dominate the market with the highest
internet of things market share. Several industries are implementing intelligent solutions
to improve their present systems. For instance, healthcare facilities deploy connected
devices to improve medical outcomes.
Further, network management is expected to hold a significant market share during the
forecast period due to the growing demand for remote monitoring systems and internetready devices in businesses. The network management solution is device-independent and
provides an easy approach to integrate cross-vendor hardware models and data structures
into the workflow
By component, the Software Solutions segment is expected to have the largest market share during the forecast period
IoT software solutions offer business applications that enhance operational efficiencies, enrich the
customer experience, and develop new revenue-generating opportunities. Internet-connected
devices of IoT interact conveniently with other devices/applications/things to exchange data and
deliver trusted data decisions to the end-user. Software solutions offer a wide range of technologies that help organizations meet their objectives and maintain a crucial competitive edge. Software solutions are witnessing traction for the established infrastructure systems to automate several functions at critical infrastructure, manufacturing, and others. However, revenue from new projects has been halted at many places for the 2020-2021 period. Also, software solutions offer great visibility and control over assets from a remote location, thus offering flexibility in decentralized locations. Hence, software solutions are expected to have the largest market size during the forecast period.
Manufacturing Industry to Lead Backed by Huge Spending on Advanced Technologies
Based on the end-use industry, the market has been segmented into BFSI, retail,
government, healthcare, manufacturing, agriculture, sustainable energy, transportation, IT
& telecom, and others.
Agriculture is predicted to grow at the fastest CAGR owing to the rising demand for fieldbased sensors and equipment. Some of the major applications of the technology in the
agricultural sector are smart farming, smart greenhouse, smart agriculture, precision
farming and smart drones, among others. The benefits of implementing the internet of
things for farmers are two-fold. It has assisted them in lowering expenses while increasing
yields by boosting farmer decision-making with precise data. For example, smart farming
enhances the entire agricultural system by monitoring the farm in real-time and allowing
farmers to produce food efficiently.
Healthcare and manufacturing are projected to have the highest market share during the
forecast period. Industry 4.0 technologies, including the industrial internet of things (IIoT),
machine learning, and big data, are enabling the manufacturing industry to shift its focus
to digital transformation to increase productivity and quality, reduce downtime, and assist
in supply chain management. For example, by providing a digital footprint of products,
digital twin, in collaboration with other industry 4.0 technologies, might keep production
facilities at the cutting edge of productivity. Since it could help manufacturing
plants discover physical imperfections sooner, forecast outcomes more precisely, and
design better products.
Retail is expected to show second-highest CAGR during the projection period due to
growing demand for tracking lost in-store sales, real-time monitoring of sales prospects,
and supply and demand forecasting advancement. The technology can assist retailers in
predictive equipment maintenance, smart transportation, warehouse automation, and
smart store development. For instance,
In October 2020, Lenovo launched a set of ThinkIoT Smarter Store Solutions to assist
retailers in improving productivity and store safety.
BFSI is predicted to grow steadily owing to enhanced demand for IoT solutions to manage
the supply of liquid cash in multiple branches, ATMs, bank partner organizations, and
others. Additionally, the rising adoption of blockchain technology in the BFSI industry is
expected to drive market growth. As blockchain provides a scalable and decentralized
ecosystem for connected devices, platforms, and applications, several banks and financial
institutions, such as ING Group, HSBC, and Deutsche Bank are conducting proof-of-concept
(PoC) tests to validate blockchain technology.
Regional Analysis
The market has been analyzed across five major regions: North America, Europe, Asia
Pacific, South America, and the Middle East & Africa. According to internet of things statistics, among Smart City projects, nearly half were ongoing in Europe, while in all other segments, the largest share was in the Americas. Smart Agriculture is one area where the APAC region has more projects than Europe and almost as many as the Americas.
North America to hold the largest market size during the forecast period
North America is one of the main contributors to the global Internet of Things market due to being a technologically advanced region. Both the US and Canada have established economies, which empower them to strongly invest in R&D activities. Rapid digitalization across industry focus areas, increasing adoption of smart connected devices, and technological advancements have further fueled the growth of the North American IoT market. The major drivers that help in the growth of the IoT market in the North American region are the increase in the use of connected devices and their network infrastructure and the increase in the collaboration of hardware, network, and software vendors. There is a proliferation of smart transportation in the region, which is helping commuters reach their destinations safely. Canadian companies are improving and optimizing their business processes by utilizing IoT capabilities. Moreover, the companies are manufacturing and selling IoT infrastructure for the optimization of businesses. Smart citizen services are a growth enabler in North America due to the presence of a large number of prominent public safety institutions, such as firefighter services and emergency medical services. Technological advancements have led to the rise in the adoption of smart services setup, which helps the region create a safe environment.
Europe
Europe is expected to dominate the market in the near future by overtaking North America with maximum market shares. Since healthcare is predicted to hold a substantial market share in Europe, the industry is becoming increasingly linked to big databases. IoT technology in conjunction with big data analytics, can provide various insights, such as diagnostic analytics, descriptive analytics, predictive analytics, and prescriptive analytics.
Connected devices combined with big data are expected to gain traction in Europe. Further, Germany, the U.K., France, Italy, Spain, and the Netherlands are driving the adoption of this technology in the region due to the growing demand for IIoT technology by enterprises in the region. Similarly, Eastern Europe and Nordic countries are showing a significant adoption rate of advanced technology. According to a March 2021 report by the CBI Ministry of Foreign Affairs, several organizations in Europe are beginning to see the value of industry 4.0 and its advantages.
The Middle East and Africa are expected to witness significant growth during the forecast
period. Middle Eastern countries, such as Saudi Arabia and UAE, have been actively
engaged in building smart cities, preferring to build and create them from scratch rather
than integrating technology into existing ecosystems. Additionally, government-funded
public administration efforts, such as Smart Dubai Office’s Dubai Blockchain Strategy are
preparing the ground for deploying connected networks and related edge network
technologies, 5G, and analytics applications.
Asia Pacific to grow at the highest CAGR during the forecast period
Asia Pacific consists of several emerging and developed economies, such as Australia, India,
China, Japan, and Singapore. The high adoption rate of new technologies has made this region a
lucrative market for the IT industry. Due to this reason, the IoT market in the Asia Pacific is expected to grow at the highest rate. As the world’s most dynamic region for urbanization, the region is home to a majority of developing members that are experiencing rapid urbanization. This trend, while creating enormous business opportunities, also presents grave challenges for sustainable development. Japan has already declared completion of most of its ‘smart city’ projects, while other countries in the region are still in the initial development phase. China is the biggest marketplace in the region in developing IoT in smart cities. In India, more than 5,000 smart cities projects with investments valued at over INR 2 trillion were in various stages of implementation as of January 2019. In addition, the countries in the region are taking aggressive initiatives to upsurge their IT infrastructures, enabling commercial users to adopt cutting-edge technologies. Some countries are more technologically developed, while some still show reluctance in adopting the latest technologies. The lack of knowledge and expertise among end-users and the lack of resources and infrastructures in developing economies are expected to restrict the growth of the Internet of Things market in the Asia Pacific. Some widespread government initiatives in the region aim at improving the efficiency of the services.
Key Market Players
Major market players such as Intel Corporation, Microsoft Corporation, AWS (US),
Oracle (US), Cisco Systems, Inc., Amazon Web Services, Inc., Siemens AG, and PTC Inc., among others, are making substantial investments in advanced technologies such as AI, cloud computing, and others. Investments in advanced technology have enabled these players to expand their business into various End-user industries and gain a competitive edge.
Industry Developments
February 2022 – Siemens updated its NX Software under Xcelerator portfolio, with
features such as intelligence-based design. This update enables the application to
leverage AI and advanced simulation technologies, providing efficient insights to the
users.
January 2022: PTC announced an alliance with Schaeffler Group, a Germany-based manufacturer to deploy a complete IT landscape. The new alliance aims to support Schaeffler’s initiatives for digital twin and visualization of 3D models.
May 2021: SAP SE, along with Honeywell, launched a connected building solution,
Honeywell Forge Real Estate Operations, that is capable of providing operators better
insights by making smart real-estate decisions. The solution bridges SAP’s IT data with
Honeywell’s OT data
April 2020 – Haltian, headquartered in Finland, received USD 9.8 million funding
from Finnish venture capital (FVC), Nordic Option Haltian and Ilmarinen. The firm aims
to use this fund to expand its product portfolio and offer efficient solutions for smart
factories, smart washrooms, and smart facilities.
In April 2020, GE Healthcare announced a partnership with Microsoft Corporation. The objective was to introduce cloud-based patient monitoring software for COVID-19 wards. The solution gathers information from all connected systems and devices and provides notifications to at-risk and ventilated patients. This enabled healthcare staff to manage patients’ health remotely while reducing self-exposure to the infection.
References and Resources also include:
https://www.marketsandmarkets.com/Market-Reports/internet-of-things-market-573.h
https://www.fortunebusinessinsights.com/industry-reports/internet-of-things-iot-market-100307
https://techjury.net/blog/internet-of-things-statistics/#gref
