The Internet of Things (IoT), (excluding PCs, tablets and smartphones) will increase to 26 billion units in 2020 – representing an almost 30-fold increase from 0.9 billion in 2009. According to Peter Middleton, research director at Gartner, IoT product and service suppliers are projected to generate incremental revenue exceeding $300 billion (mostly in services), resulting in $1.9 trillion in global economic value-add through sales into diverse end markets.
“The growth in IoT will far exceed that of other connected devices. By 2020, the number of smartphones tablets and PCs in use will reach about 7.3 billion units,” said Middleton. “In contrast, the IoT will have expanded at a much faster rate, resulting in a population of about 26 billion units at that time.”
Enterprises are also expected to make extensive use of IoT technology, with a wide range of products sold into various markets, such as advanced medical devices; factory automation sensors and applications in industrial robotics; sensor motes for increased agricultural yield; and automotive sensors and infrastructure integrity monitoring systems for diverse areas, including road and railway transportation, water distribution and electrical transmission.
“By 2020, component costs will have come down to the point that connectivity will become a standard feature, even for processors costing less than $1. This opens up the possibility of connecting just about anything, from the very simple to the very complex, to offer remote control, monitoring and sensing,” Middleton explained. “The fact is, that today, many categories of connected things in 2020 don’t yet exist. As product designers dream up ways to exploit the inherent connectivity that will be offered in intelligent products, we expect the variety of devices offered to explode.”
Middleton also confirmed that incremental IoT supplier revenue contribution from IoT in 2020 is projected to hit $309 billion, with economic value-add totaling $1.9 trillion across sectors in 2020. Current verticals leading IoT adoption are manufacturing (15 percent), healthcare (15 percent) and insurance (11 percent).
“IoT value-add is composed of the combination of mature IoT, which is already yielding benefits, and a high-growth emerging IoT opportunity,” the analyst continued. “It is derived from a combination of sector-specific technology (such as connected, automated manufacturing systems) and more generic, widely used technology, such as the suite of ‘smart building’ technologies, including light-emitting diode (LED) lighting and smart HVAC systems.”
In addition, says Middleton, emerging areas will witness rapid growth of connected things, leading to improved safety, security and loss prevention in the insurance industry. For example, IoT is projected to facilitate new business models, such as usage-based insurance calculated based on real-time driving data, while the banking and securities industry will continue to innovate around mobile and micropayment technology using convenient point-of-sale (POS) terminals and investing in improved physical security systems. IoT is also capable of supporting a large range of health and fitness devices and services, combined with medical advances, leading to significant benefit to the healthcare sector. Last, but certainly not least, emerging connected sensor technology will lead to value creation in utilities, transportation and agriculture.
As we’ve previously discussed on Bits & Pieces, the IoT represents one of the greatest potential growth markets for semiconductors over the next several years. That is precisely why Atmel remains focused on designing the absolute lowest power sipping products, particularly with regards to microcontrollers (MCUs) which offer maximum performance and meet the requirements of advanced applications. Atmel also offers highly integrated architecture optimized for high-speed connectivity, optimal data bandwidth and rich interface support – making our microcontrollers ideal for powering the smart, connected products at the heart of the IoT.