Industrial IoT Market Size, Share & Trends Analysis Report By Offering (Hardware, Software, Services), By Connectivity (Wired, Wireless), By End-use Industry (Aerospace and Defense, Automotive, Chemicals, Energy & Power, Food & Beverage, Metal and Mining, Oil & Gas, Pharmaceutical, Semiconductor & Electronics, Others (Healthcare, Water & Waste Water, etc.)) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global industrial IoT market size was valued at USD 334.53 billion in 2022. It is projected to reach USD 2916.21 billion by 2031, growing at a CAGR of 27.2% during the forecast period (2023-2031). 

A considerable degree of intelligent automation, reducing operational cost, and the growing implementation of 5 G-powered infrastructure for industrial IoT are the two-pronged drivers boosting the market growth. On September 26, 2018, the Federal Communications Commission (FCC) proclaimed to accelerate the deployment of cell sites necessary for 5G wireless networks in the U.S. However, inadequate IT Infrastructure might impede the market growth. Many developing countries lack considerable infrastructure. For instance, poor internet connectivity in countries such as Africa, Malaysia, Chile, and Brazil is foreseen to dramatically thwart market growth. It is projected that over 120 billion IoT devices will be online by 2030. Considering the present infrastructure, it is a challenging task to quench the estimated vision.

Market Dynamics

What are the Primary Factors Driving the Industrial IoT Market?

Increasing Awareness and Adoption of IoT

The widespread adoption of various IoT solutions in various industrial applications, including robotics, medical devices, and software-defined production processes, among others, is one of the key factors propelling the growth of the global Industrial IoT market. Automation, optimization, maintenance, and networking are just a few of the industrial processes that industrial IoT has integrated with. Businesses and industries can benefit from improved operational efficiency and dependability thanks to industrial IoT. Due to the high level of performance and efficiency offered by IIoT during operations, the Industry Internet of Things is now driving market growth.

Government Initiatives to Support IoT

The expansion of the global Industrial IoT market is also being fueled by favorable governmental initiatives, plans, and programs in every country. To adapt to the industry 4.0 revolution, various governments around the world are putting more emphasis on enhancing corporate flexibility and competitiveness. Governments are also concentrating on enhancing the workforce's efficiency and skill set, which will help suppliers of industrial IoT solutions.

What are the Main Factors that Will Slow Down the Industrial IoT Market?

Rising Importance of Privacy and Cybersecurity Concerns

The surface area of a network is increased by many IoT devices, which increases the number of potential attack vectors. From a single connected, unprotected device, IIoT could face an active attack on the network. Massive losses could result from attacks on crucial industrial infrastructure. Consequently, this is impeding market expansion. With enough time and effort, researchers have been able to breach real, commercially available devices; therefore, hackers would probably be able to duplicate their efforts. For instance, a group of researchers from Microsoft and the University of Michigan discovered numerous security flaws in Samsung's SmartThings smart home platform using techniques that were hardly sophisticated. Therefore, such issues can restrain the growth of the market. 

What are the Future Opportunities for Industrial IoT Market?

Increasing Technological Advancements 

The development of technology and the introduction of new products in semiconductors and electronic devices are anticipated to have a significant positive impact on the global market. Real-time access to information is also made possible by the simple availability of low-cost sensors and processors. This is then anticipated to have a positive impact on the expansion of the global market. For example, the CBI Ministry of Foreign Affairs claims Hardware was predicted to account for nearly 35% of the internet of things market in 2019, followed by connectivity (22%), IoT services (27%), and software (16%). Additionally, a number of R&D organizations are creating new potential applications for Industrial IoT. Major well-known vendors are investing in R&D to boost operational productivity, which is a key component of the Internet of Things industry. Internet-based operation technology may also increase the viability of certain industries or businesses. The convergence of the IT sector has many opportunities thanks to the Industrial Internet of Things. Additionally, a lot of governmental entities have disclosed their investments in IIoT 4.0. With this investment, businesses can allocate the largest percentage of their IT budgets to IoT projects. The South Korean government announced in August 2019 that it is investing WON 4.7 trillion, or roughly USD 3.2 billion, in cutting-edge industries.

Regional Analysis

The global market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA. 

North America Dominates the Global Market

North America is the highest contributor to the global market and is expected to grow at a healthy CAGR during the forecast period. The region is readily implementing the IoT in various industrial sectors, including oil & gas, utilities, transportation, chemical, agriculture, and pharmaceutical. In the U.S., many manufacturers are early adopters of the Internet of things to facilitate efficacy in asset management, manufacturing plants, warehouses, extended supply chains, etc. In North America, there are a number of well-known market participants. Additionally, the area was a pioneer in IIoT adoption and has since developed into a hub for innovation. Due to government efforts to encourage the adoption of IIoT solutions in the country, Canada has also experienced tremendous development.

Asia Pacific is anticipated to be a prominent region in the Industrial IoT network due to the wide and diverse set of organizations involved in IoT as compared to other regions. The magnitude and potential of the markets and local activities are drawing the attention of international organizations to contemplate IoT initiatives in the region. The popularity of advanced factory automation systems is rising in the region, especially in China, Japan, and Taiwan. Manufacturing businesses all over the region are starting to recognize the benefits of using robot arm technology. Thanks to government initiatives like "Made in China 2025," which place a high priority on the development of cutting-edge automation technology in the region.

Europe region is projected to witness moderate growth in the Industrial IoT market share during the forecast period. The U.K. government-backed innovation body Digital Catapult is working with two manufacturers – Dyer Engineering and Special Metals Wiggin, to create a 'Connected Factory Demonstrator' and is looking for IoT and LPWAN-powered startups willing to deploy their asset tracking solutions in a live manufacturing operational environment. While supporting the expansion of the retail and agricultural sectors, the home, finance, health, and manufacturing sectors are adopting the internet of things. During the forecast period, it was expected that European IoT spending would total $ 184 billion in 2021. Furthermore, it is anticipated to grow at a double-digit rate through 2025.

The LAMEA region is expected to register a healthy growth rate in the Industrial IoT market due to the increased use of Industrial IoT in marketing campaigns across countries such as Saudi Arabia and the UAE. The Saudi Arabian government is making significant investments in digital ecosystems that will increase demand for IoT devices and support the market's expansion. Additionally, the IoT industry's technological advancements are beneficial. Fleet Management Systems & Technologies (FMS Tech) has introduced Industrial IoT software as part of its portfolio for the GCC in UAE to boost fleet management. 

Segmental Analysis

The global industrial IoT market is segmented by type and application. 

Based on type, the global market is bifurcated into solutions, services, and platforms.

The solution segment is the highest contributor to the market and is expected to grow at a healthy CAGR during the forecast period. Solution providers are placing a strong emphasis on the introduction of cutting-edge information systems for various industries and industrial verticals as part of their efforts to increase their market share. To track real-time data and boost operational efficiency, they are also focusing on integrating sensors and other systems into crucial equipment. With the aid of such solutions, manufacturing companies should be able to automate their intricate manufacturing processes while maintaining efficient monitoring.

The services segment is expected to witness a higher CAGR. The rise is the result of a sharp rise in the number of connected devices, which produce enormous amounts of data. IIoT applications currently use centralized cloud services to control data flow and overall business processes. By offering real-time analytical tools and strategies for decentralizing network storage and transactions, edge computing will also revolutionize the sector. 

Based on application, the global market is bifurcated into manufacturing, agriculture, healthcare, energy & utilities, logistics & transport, and others.

The manufacturing segment is the highest contributor to the market and is expected to grow at a healthy CAGR during the forecast period. Digital manufacturing technologies are being quickly adopted by the manufacturing industry, and the Internet of Things (IoT) is essential to these cutting-edge innovations. Due to the strategic alliances and partnerships that involved parties are forming, as well as the rising demand for a connected supply chain to provide adaptability, operational effectiveness, and regulatory compliance, the market is anticipated to experience significant growth in the near future. 

The logistics and transportation segment is expected to grow at a significant rate. The rise can be attributed to the significant emphasis logistics, and transportation companies are placing on enhancing asset management and, as a result, on the adoption of smart transportation. RFID tags, which have been used extensively in the logistics sector, are being phased out in favor of internet-connected trackers that can support a variety of functions. Modern alternatives like Bluetooth tags and beacons are also gaining popularity. These kinds of solutions not only make it possible to track data in more constrained, smaller areas, but they can also enhance operational management.

Impact of covid-19

As part of steps to control the transmission of the COVID-19 pandemic, governments in several nations have limited the movement of commodities and people and suspended the functioning of manufacturing facilities. It has impacted power usage throughout the world. As per the short-term forecast of the United States Energy Information Administration (EIA), electricity consumption in the United States is expected to fall by a record 4.5% by the end of 2020, as businesses have temporarily shut down due to the government lockdowns to stop the prevalence of the coronavirus. As a result, global demand for and manufacturing instrument transformers is expected to fall.

Recent Developments

• In December 2021, Silicon Labs launched a customized component manufacturing service. This facilitates the factory-level customization of makers' Silicon Labs hardware. Wireless SoCs, modules, and MCUs are all part of Silicon Labs' hardware lineup. Customers who use this feature will be able to leave a trail and be identified throughout the entire journey of the chip.
• In April 2022, ARM Holding widens its Total solutions for IoT portfolio with the latest Corstone subsystems for Cortex-M processors and Cortex-A processors.
• In January 2022, Intel Corporation launched 12^th Gen Processors with a hybrid architecture, which combines performance and efficient cores with Intel Thread Director.