Internet of Things (IoT) Market

Market Overview

The global Internet of Things (IoT) market size was valued at USD 813.29 billion in 2021. It is projected to reach USD 2,483.25 billion by 2030, growing at a CAGR of 13.19% during the forecast period (2022-2030).

The Internet of Things (IoT) is a network of connected devices that execute a single or a group of functions. Networking technology links multiple components incorporated inside a system using software, electronics, sensors, and wireless chips. IoT is critical in the development of smart communication settings such as smart homes, smart transportation, smart healthcare, smart retail, and so on. IoT technology provides the foundation for numerous industries to change digitally, allowing them to enhance old processes by developing and tracking new business models. Enterprises and service providers have identified IoT as a critical enabler for enhancing digital transformation and operational efficiency.

Market Dynamics

Global Internet of Things (IoT) Market Drivers

Increasing Adoption of Connected Devices and Technology Proliferation

The IoT market is favorably impacted by the growing trend of adopting linked devices in both residential and industrial sectors. In the home market, voice assistant modules are becoming more and more common, which has increased the penetration of smart devices like smart thermostats, Bluetooth speakers, lighting, and metering solutions. According to Metova's research, smart Bluetooth trackers (over 30%), smart thermostats (63%), and home retrofit devices (70%), which continue to be the most popular products that consumers find fascinating, are the categories of IoT devices that are most frequently owned. In addition to the home market, industrial usage is exploding. For instance, Aruba Networks estimates that 85% of enterprises will have implemented IoT devices, indicating that the technology is becoming increasingly common.

Global Internet of Things (IoT) Market Restraint

Growing Issues Related to Security and Privacy of Data and Connectivity of Devices and Interoperability

When more devices, like IoT, are introduced to a network, the surface area grows, which could mean an increase in the number of attack vectors. It only takes one unsecured, actively attacking device to bring down an entire network. IoTs are being used in an increasing number of private network and device intrusions. The recent cybersecurity issue with Xiaomi Mijia intelligent security cameras prompted Google to stop supporting its devices. For example, a user who owned Xiaomi Mijia cameras connected to a Google Nest Hub received random images from other people's homes when streaming content from the camera to a Google Nest Hub. Such attacks on vital infrastructure in industrial space can cause enormous damage. One of the biggest pure-play semiconductor businesses (WannaCry) had to shut down some of its fabs due to ransomware spreading through the production network. Aside from industry, the infrastructure might be destroyed by an attack on smart city solutions like electricity grids, water systems, and communication networks.

Global Internet of Things (IoT) Market Opportunities

Proliferation of New Devices and Cost Effectiveness

Advanced primary technologies and many devices have aided IoT technology development. New sensors, increased computer power, and reliable mobile communication will develop further in the upcoming years. The sensor technology in the Internet of Things (IoT) devices will keep becoming more affordable, sophisticated, and accessible. New sensor applications, such as extensive monitoring and detection, will be made available through this accessibility and affordability. In contrast, over the previous 15 years, processing power has increased nearly 100 times. Thus, activities can be shifted away from local devices and toward cloud and edge computing solutions using real-time analytics and artificial intelligence applications. Additionally, the introduction of 5G will enhance mobile connectivity and open up new applications for experiences like augmented and virtual reality. Finally, the requirement to connect existing IT equipment to the IoT will drive growth in the IoT market.

Regional Analysis

The global Internet of Things (IoT) market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant shareholder in the global Internet of Things (IoT) market and is expected to grow at a CAGR of 11.90% during the forecast period. The Asia-Pacific region is known for being a leader in the adoption of new technologies like AI and IoT. Due to the absence of the burden of rebuilding existing machine investments and automation systems, the market in these developing economies offers a significant advantage when introducing industrial automation. The Asia-Pacific manufacturing sector is significant. In addition, China's economy contributes significantly and is going through a rapid shift due to rising labor costs and the unsustainable nature of the traditional migrant worker model. These trends have forced the economy to incorporate automation into its industrial procedures. IoT solutions are being adopted by many businesses across numerous sectors to boost their competitiveness in specialized markets. In a survey by Ovum, it was found that Chinese businesses frequently adopted IoT to boost their competitiveness. In addition, it appears that India is deploying innovative technology first. The nation presents a chance to widely use cutting-edge technologies to achieve economies of scale.

North America is expected to grow at a CAGR of 9.85%, generating USD 589.49 billion during the forecast period. Modern manufacturing facilities in the US utilize new technologies and innovations to create goods of excellent quality more cheaply and at a higher rate. Robots are expected to significantly contribute to the restoration of American jobs, increase manufacturing productivity, and assist manufacturers in adjusting to shifting customer tastes. Robots are projected to reduce the Chinese labor cost advantage in the future because they are equally expensive for Chinese and American businesses. The convergence of AI and IoT, promoted by firms like SAS Software as the next wave of IoT built upon AI, is among the future technologies anticipated to arise out of the present technologies altering manufacturing in the United States. It has come to light that hospitals in Vancouver, Canada, have begun using the Wanda Quicktouch IoT buttons made by Visionstate Corporation. These run on batteries and link via LTE-M, sending notifications to janitorial or maintenance management in the event of any potential dangers to public safety.

The United Kingdom risks its market position to capitalize on the Internet of Things (IoT) advantages. Despite the findings of the research emphasizing the delayed adoption of the technology by UK businesses, those companies are investing more heavily in the technology than their counterparts in France and Japan. The UK invests a significant amount of money in the healthcare industry as a result of the pandemic's effects. A British textile business, Coats, also used Microsoft's technology to track environmental compliance across its global manufacturing facilities. Installation of the sensors at the factory allowed for tracking and updating operations involving wastewater pollution, which prompted the business to guarantee that relevant standards were adhered to as quickly as feasible. Since the UK is one of the world's key markets for innovative home solutions, the UK government has started a consultation process to regulate consumer Internet of Things (IoT) security. This is expected to substantially impact US manufacturers and boost the market during the forecast period.

A fund that awards funding to Brazilian entrepreneurs using Internet of Things (IoT) technology was established through a partnership between Qualcomm Ventures and Brazil's National Bank for Economic and Social Development (BNDES). Such activities are anticipated to accelerate the region's adoption of IoT. Additionally, encouraging government measures is anticipated to positively affect the IoT market's expansion. In the Middle East, applications for public administration and smart cities account for most IoT adoption. Also, city planners have been utilizing IoT networks to monitor and manage devices, infrastructure, and data generation while maintaining the overarching objective of maximizing public services, commercial opportunities, and living standards for inhabitants. Additionally, this initiative is anticipated to redefine smart living by Egypt Vision 2030's goals for national economic development.

Segmental Analysis

The global Internet of Things (IoT) market is segmented by component and end-user verticals.

By Components Analysis

Based on components, the global IoT market is bifurcated into hardware, software/platform, connectivity, and services.

The hardware segment owns the highest market share and is expected to grow at a CAGR of 10.53% during the forecast period. Over the past few years, IoT has experienced exponential growth and produced enormous amounts of data. As a result, edge computing has gained ground in cloud computing, cybersecurity, and SaaS installations in the IoT sector. The necessity for data generation and how modern networks can enable IT to combine with OT and disrupt the same for highly automated enterprise and industrial contexts are further evidenced by hardware advancements in routers and switches. As industry 4.0 takes hold in the industrial sector, numerous facilities are implementing digital technology to improve, automate, and modernize the entire procedure. The internet of things (IoT) is rapidly spreading because it offers outstanding advantages. For instance, IoT may provide manufacturing businesses with real-time warnings and feedback regarding damaged or defective goods.

Remote device lifecycle management for IoT is made possible by cloud services. This provides a complete data picture of the entire device infrastructure. Major cloud providers have been seen providing a variety of IoT device lifecycle solutions to make updating and configuring software and firmware over the air easier. The consumer's selection of the appropriate location for the device, the proper network and internet connection, and the appropriate configuration with the related apps are necessary for successful IoT onboarding. New strategies to assist IoT device onboarding are required as IoT usage progresses, and the variety and complexity of linked devices grow. Using the Internet of Things (IoT) for industrial purposes allows original equipment manufacturers (OEMs) to provide their customers with additional services, such as cloud-based remote asset monitoring and system updates. As more information is fed into the system, it improves efficiency.

By End-User Vertical Analysis

Based on the end-user vertical, the global IoT market is bifurcated into manufacturing, transportation, healthcare, retail, energy and utilities, residential, government, insurance, and other end-user verticals.

The manufacturing segment is the highest contributor to the market and is expected to grow at a CAGR of 10.46% during the forecast period. IoT technologies are used more frequently to optimize surroundings and products for discrete production. Process manufacturers and discrete manufacturers (in the automotive and industrial machinery industries) are rapidly investing in new technologies that use IoT, cloud, and Big Data analytics to improve their capacity for innovation and maximize return on their assets. Industrial IoT (IIoT), smart manufacturing, smart factories, predictive manufacturing, industrial robots, sensors, edge computing, digital twins, and software-as-a-service (SaaS) have made IoT the central backbone of discrete and process manufacturing environments, enabling remote monitoring, continuously scanning factory floor equipment, real-time analysis, and new capabilities. To incorporate predictive analytics in real-time manufacturing environments and to build the "Factory of the Future" by improving output and reducing waste, Jabil, a US-based manufacturing service provider, leverages Microsoft Azure's IoT Suite.

IoT is significantly affecting the entire supply chain in business. Many businesses have raised the amount they spend on IoT-enabled technologies; one example is the worldwide trucking sector. Older vehicles are being replaced with "smart trucks," which send crucial data and improve the entire supply chain utilizing Machine-to-Machine (M2M)/IoT systems and cellular communications technologies. Fleets with connectivity improve operational effectiveness and reduce their environmental impact. It cuts the distance traveled by the vehicle to the location by 68%, reducing fuel use, emissions, and carbon footprint. As a result, annual CO2 emissions are reduced by 75% or around 36 million metric tons. According to several industry experts, in-car infotainment and vehicle telematics will dominate 5G IoT applications during the projected period. The growing commercialization of 5G will make it possible to gather more detailed information about the functionality and health of the car, as well as the driver's behavior. It will also enable the delivery of more advanced services (like those offered by automotive OEMs and car dealerships) and new pricing schemes (e.g., insurance companies). US-based Harman also introduced the 5G-ready auto telematics solution.

Recent Developments

• June 2022- Cisco's improved converged network solution assists service providers in creating a future-proof internet while reducing expenses.
• September 2022- PTC introduced Onshape and Arena Connection to speed up product development and supply chain management.