The Internet of Things industry: a growing success
The IoT revolution is well and truly upon us, invading both our professional and personal lives. And that is not about to change: according to a study by American firm Gartner, the IoT sector is set to grow by 31% in 2017, from 6.4 billion to 8.3 billion devices.
But where is the market? Primarily in North America, Western Europe and China. These three regions represent 67% of the market share.
IoT for consumers
The B2C applications of the IoT will represent an estimated 5.2 billion connected devices this year, worth $725 billion. And it should not be taken lightly, given that of all the devices sold, those destined for ultimate consumers constitute 63% of the market.
What are the most popular IoT devices? The majority are in the field of home automation. Peter Middleton, Research Director at Gartner, goes even further: “aside from automotive systems, the applications that will be most in use by consumers will be smart TVs and digital set-top boxes.”
The main sectors responsible for the extra 1.3 billion units that will flood the B2C market are home automation (virtual assistants, household appliances), leisure (sport, entertainment), and, to a lesser extent, fashion, as with the H&M’s digital dress. This growing market has piqued much interest in France.
However, the Gartner study does not stop there: it estimates that the number of B2C connected things will rise by 25% between 2017 and 2018, and by 45% between 2018 and 2020, reaching 12 billion units. Endpoint spending will increase by 26% in 2018 and reach $1,494 billion within 3 years.
While the IoT B2C sector is larger in terms of volume, it comes second in value. In 2016, each B2C generated $134 of revenue, compared to $350 for B2B. However, the Gartner study forecasts that this figure will drop to $190 in 2020.
From clothing to toothbrushes and a host of other daily accessories, it is estimated that 20 billion things will be connected throughout the world by 2020. This proliferation underlines the need to address the issue of potential security flaws.
IoT in business
When Garnter published the results of its study, it divided the B2B sector into two parts: cross-industry and vertical-specific (e.g. manufacturing). These sub-categories represent 1.5 and 1.64 billion things respectively in 2017.
Smaller than B2C, the business IoT market accounted for 2,418 billion units in 2016, worth $846 billion. In 2017, this volume is estimated to rise by 30% and spending by 14%, hitting a high of $964 billion.
The number of companies offering or using connected devices is definitively growing. Even without this expansion, the simple fact of being connected means improving their security should be made a key concern.
Now what about the years to come? 2018 should see 1,024 billion new devices in the manufacturing and services sector. These additional devices are set to bring in $145 billion. The biggest markets are, without doubt, commercial properties (logistics, assembly line, security); residential property, via home automation; and smart cities through climate, security and behaviour sensors.
Cross-industry business will witness better growth than vertical-specific. The number of connected things will soar with 399 million more devices. Spending will naturally follow, with an increase of $69 billion (compared to $49 billion for the services sector). These sums show that a poorer sector can be richer in terms of growth.
The Big Four are heavily investing in the IoT, as proven by Google and Amazon’s virtual assistants (Google Home and Alexa). Since 2010, the giants have concentrated on Artificial Intelligence to develop complete connected devices. The Gartner study predicts that the number of connected devices will overtake the world population, mainly thanks to smart buildings and services. In the coming years, the IoT will be a prominent feature both at home and in the workplace.