IoT spending will grow from $699 billion in 2015 to $1.3 trillion in 2019

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Billions of devices, trillions of dollars! Insurance, healthcare and consumer markets expected to see the fastest growth over the next five years.

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Worldwide spending on the Internet of Things is expected to be $698.6 billion this year and grow at a 17% CAGR to nearly $1.3 trillion in 2019, according to the International Data Corporation (IDC).

At the moment, the Asia-Pacific region accounts for more than 40% of worldwide IoT spending, followed by North America and Western Europe. The APAC’s activity is being fueled by developing countries’ continuing technology investment needs, government investments incorporating more IoT components, and a burgeoning new consumer class spending more on smart goods and services.

However, the regions that will experience the fastest growth in IoT spending over the five years are Latin America (26.5% CAGR), followed by Western Europe, and Central and Eastern Europe.

While manufacturing and transportation led the world in IoT spending ($165.6 billion and $78.7 billion, respectively) in 2015, the insurance, healthcare and consumer verticals are projected to experience the fastest growth through 2020.

The IDC also points out some of the unique fastest growing use cases in each global region. Take North America, for example. The IoT is thriving thanks to retailers deploying in-store contextual marketing like beacons, real-time streams of data from mobile devices, online consumer activity, as well as video cameras to gain insight into behavior and trends.

In Asia-Pacific, vehicle-mounted devices are being employed to monitor driver behavior to determine insurance rates, whereas in EMEA, a great deal of money is being poured into smart buildings to automate maintenance and operations. Meanwhile in Latin America, the fastest growing IoT category is field service, where service data is automatically measured, recorded and transferred remotely for monitoring and use by technicians.

This report piggybacks off recent research from Gartner which estimated that by the end of 2016, 6.4 billion devices will be connected to the Internet with as many as 5.5 million new things joining every day. That number represents a 30% jump from 2015, and will continue rising to 20.8 billion by 2020.

Report: Wearable device shipments predicted to grow 173% this year

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“Growth in the smart wearables market points to an emerging battleground among competing platforms.”

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An estimated 72.1 million wearable devices are expected to ship this year, IDC researchers have revealed in their latest report. If that’s the case, the number would surge 173% from the 26.4 million wearables delivered back in 2014. Moving ahead, the firm forecasts a CAGR of 42.6% over the course of the next five years, bringing the total shipped in 2019 to 155.7 million.

According to the report, nearly four in 10 wearables are now priced under $100. However, IDC expects devices classified as “smart wearables,” which refers to those capable of running third-party apps, to take the lead in 2016. These include gadgets like the Apple Watch and Micosoft’s Hololens that are believed to open up endless opportunities for vendors, app developers and accessory makers.

“The demand for basic wearables, those that do not run third party apps, has been absolutely astounding,” said Jitesh Ubrani, IDC senior research analyst. “Vendors like Fitbit and Xiaomi have helped propel the market with their sub-$100 bands, and IDC expects this momentum will continue throughout 2015.”

While the demand for more basic wearable devices, such as watches, fitness bands and eyewear, may have gotten off to a slower start, the market has certainly matured over the past couple of months with a wider range of products and improved consumer adoption.

Though shipments for the so-called basic wearables came in at 22.1 million in 2014, this segment will also continue to grow with 39 million projected for this year and 66.3 million by 2019. Meanwhile, smart wearables — which only stood at 4.2 million in 2014 — will rise to an incredible 89.4 million throughout the five year period.

“Growth in the smart wearables market points to an emerging battleground among competing platforms,” added Ramon Llamas, IDC research manager. “Android Wear, Tizen, and WatchOS are moving ahead with improved user interfaces, user experiences, and applications. These will raise the expectations of what a smart wearable can do, and each platform is vying for best-in-class status. We’re not there yet, but we’re seeing the building blocks of what is to come.”

Report: Shipments of wearable devices triple as prices get lower

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The wearable market recorded its eighth straight quarter of solid growth, according to a new report by IDC.

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Even in the months leading up to the highly-anticipated release of the Apple Watch, the wearable space continued to show strong growth, IDC has confirmed. In its latest report, the research firm revealed that the worldwide market recorded its eighth consecutive quarter of steady maturation in the first quarter of 2015. During this three-month period, vendors shipped a total of 11.4 million devices — a 200% jump from the 3.8 million wearables shipped that time last year.

“Bucking the post-holiday decline normally associated with the first quarter is a strong sign for the wearables market,” IDC research manager Ramon Llamas said in the report. “It demonstrates growing end-user interest and the vendors’ ability to deliver a diversity of devices and experiences. In addition, demand from emerging markets is on the rise and vendors are eager to meet these new opportunities.”

The top five wearable vendors over the timespan included Fitbit, Xiaomi, Garmin, Samsung and Jawbone, in that order, each of whom have been able to collectively grow their dominance from two-thirds of the market in Q1 2014 to three-quarters Q1 2015. Fitbit’s extensive lineup of bands, such as the Charge, Surge and older Flex models, led the way by capturing just over a third (34.2%) of the space. Not far behind, Xiaomi made up about a quarter (24.6%), driven by the tremendous popularity of its Mi Band, primarily from China.

Meanwhile, Garmin’s health and fitness-focused devices, Samsung’s Gear smartwatches and Jawbone’s UP MOVE and continued demand of UP24 round out the list at 6.1%, 5.3% and 4.4%, respectively. Now with the Apple Watch in the equation, however, IDC expects that the wearables landscape will experience a seismic shift, one in which will “force the competition to up their game in order to stay on the leading edge of the market.”

Without question, helping to spur widespread adoption has been price erosion. As seen with many young forms of technology, gizmos and gadgets become much more affordable over time. In the case of wearables, more than 40% of devices are now priced under $100.

“Despite this price erosion, Apple’s entrance with a product priced at the high end of the spectrum will test consumers’ willingness to pay a premium for a brand or product that is the center of attention,” explained IDC research analyst Jitesh Ubrani.

Want to learn more? Download the entire report here.

Report: Internet of Things market to triple to $1.7 trillion by 2020

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According to IDC, the Internet of Things market will grow from $655.8 billion in 2014 to $1.7 trillion in 2020.

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The global Internet of Things market is expected to grow to $1.7 trillion in 2020, up from $655.8 billion in 2014, as more devices become connected and a bevy of vendors and enterprises begin to embrace the opportunities. According to the latest report from International Data Corporation (IDC), the market will rise at a CAGR of 16.9%.

The research firm projects that smart devices, connectivity and IT services will make up the majority of the IoT over the next five years. Together, they are estimated to account for over two-thirds of the worldwide IoT market in 2020 with modules and sensors alone representing 31.8% of the total.

By 2020, IDC anticipates that IoT purpose-built platforms, application software and “as a service” offerings will represent a much larger percentage of revenue as the market matures. IDC also goes on to note that the number of IoT endpoints will increase from 10.3 million last year to more than 29.5 million in 2020.

“While wearable devices are the consumer face of the Internet of Things, and where recognition of IoT appears to begin, the real opportunity remains in the enterprise and public sector markets,” explains Vernon Turner, SVP and IoT research fellow at IDC. “The ripple effect of IoT is driving traditional business models from IT-enabled business processes to IT-enabled services and finally to IT-enabled products, which is beginning to disrupt the IT status quo.”

The Asia Pacific region captured 58.3% of the revenue from IoT in 2014 and is forecasted to shrink slightly to 51.2% in 2020. IDC reveals that, in China, the combination of a growing population using mobile devices and a push to improve manufacturing efficiency could potentially drive an increase in new gadgets and IoT standards. Meanwhile, North America is expected to maintain revenue share of just more than a quarter (26%) over the five-year period, while Western Europe is projected to jump from 12% to 19.5%.

Want to learn more? Download the entire report entitled “Worldwide Internet of Things Forecast 2015–2020“ here.

Report: 8.6 billion “things” to be conneccted in Asia/Pacific by 2020

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By 2020, the total Asia/Pacific (excluding Japan) market size will increase from $250 billion to $583 billion.  

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The Asia/Pacific Internet of Things (IoT) industry will continue its strong growth with the number of connected units expected to increase from 3.1 billion to 8.6 billion by 2020. According to a new report from IDC, over this same period, the market size for the entire region excluding Japan (APeJ) will jump from $250 billion to $583 billion.

Charles Reed Anderson, AVP and Head of Mobility & Internet of Things at IDC Asia/Pacific, said the IoT industry has matured considerably over the past year, with a number of large government initiatives across APeJ, and China in particular, driving demand.

“This increase in market demand has led to an increased focus on IoT from leading ICT vendors, as well as startups – with each keen to grab their share of the growing IoT market.”

IDC’s IoT Market Forecast reveals that China will not only continue to dominate the Asia/Pacific region — accounting for 59% of the APeJ market opportunity by 2020 — but will be emerge as one of the leading markets throughout the world with nearly one out of every five units connected over the net five years to be in China. However, market size is not the same as market maturity. In fact, the top three “most mature markets” are South Korea, Australia, and New Zealand, while China came in sixth out of the 13 APeJ Countries.

“High-level IoT market forecasts of information by region or country can be useful to certain audiences. It adds little value to those functional areas with more specific requirements. Sales and marketing, for instance, require IoT forecasts aligned to industry verticals so they can effectively set targets and tailor their go-to-market messaging; while product management requires IoT forecasts aligned to use cases such as digital signage so they can understand the addressable market for their solution portfolio across multiple industries,” adds Anderson.

The IoT market forecast also looks at which industries are leading the way with IoT. The government industry tops the charts, as national, regional and city governments aggressively try to leverage smarter solutions to drive new revenue streams, reduce costs and enhance citizen services as part of their smart government initiatives. What’s more, an even more recent study from IDC found that more than 50% of government agencies with direct citizen engagement missions will direct at least 25% of their programmatic budget to third platform technologies and IoT.

Other leading industries include utilities, discrete manufacturing, healthcare and retail.

“For the vendors looking at IoT, it is vital they understand which industries are driving the markets they are targeting as each country has its own unique drivers. Singapore’s leading industries, for instance, are telecoms, consumer and transport, none of which are ranked in the APeJ top five industries for market opportunity. Having this level of market knowledge will allow the vendor community to tailor their go-to-market messaging for each market and increase their chances of success.”

Want to learn more? Download the research firm’s entire report here.

Worldwide IoT market to exceed $7 billion by 2020

Analysts at IDC confirm a transformation is underway that will see the worldwide market for IoT solutions increase from $1.9 trillion in 2013 to a staggering $7.1 trillion in 2020. Indeed, consumers continue to experience and embrace IoT in their homes, cars and in many other aspects of their daily life.

Globally, individuals are developing a high affinity for full-time connectivity, which makes consumer IoT a compelling proposition. Businesses are also intrigued by the efficiencies, business process implications and revenue opportunities IoT solutions are capable of generating.

“Businesses are taking the necessary steps to gain a deeper understanding of IoT and the overall value,” explained Vernon Turner, Senior VP of IDC’s Enterprise Infrastructure, Consumer, Network, Telecom and Sustainability Research. “Technology vendors are evolving their solutions in a supply-driven market that’s edging toward becoming a more demand-driven market.”

Carrie MacGillivray, Program VP, Mobile Services, IoT, and Network Infrastructure at IDC, expressed similar sentiments.

“The worldwide IoT market is exploding… IoT solutions are at the heart of IDC’s view of the third platform and the four pillars — mobility, social business, big data/analytics, and cloud — resulting in millions of applications available to billions of end points.”

MacGillivray also noted that developed regions (currently) garner the majority of the IoT market, representing approximately 90% of installed units. However, the worldwide IoT install base is expected to experience a compound annual growth rate (CAGR) of 17.5% from 2013 to 2020.

As we’ve previously discussed on Bits & Pieces, Atmel is well-positioned to benefit from the rapidly evolving Internet of Things (IoT). According to Oppenheimer & Co. analyst Andrew Uerkwitz, Atmel is one of a handful of companies that makes microcontrollers (MCUs) that will increasingly be in demand.

“As we move toward Internet of Things, if you think about everybody’s connected devices today, everybody has about three to four connected devices, meaning connected to each other in some way. And we believe within five to 10 years, that’s going to be about 10 devices,” said Uerkwitz. “Everyone’s going to have 10 things that are connected to the Internet or connected to a smartphone or just generally connected whether it’s in the automobile, in the home or in the office.”

As Uerkwitz points out, a number of devices, such as thermostats and televisions that may not currently be connected to the Internet will increasingly become “smart devices.” 

As this trend plays out, those devices will require the components that Atmel supplies.

“So, their core business has thousands of customers trying to add these microcontrollers to devices, consumer electronics and we think that core business will grow nicely,” Uerkwitz added.

Interested in learning more about the IoT? You can check out Atmel’s recent IoT SoMa panel on the subject here, Patrick Sullivan’s EELive! 2014 presentation and our extensive Bits & Pieces IoT article archive here.

Understanding the IoT/M2M IT ecosphere

IDC analyst Scott Tiazkun confirms that the Internet of Things (IoT) is beginning to coalesce – both in terms of abstract concept and concrete solutions. As such, Tiazkun recommends vendors take the next step by analyzing IoT’s huge IT opportunity in a “more realistic and valuable” framework.

“As exciting as the overall opportunity for the IoT market currently exists, understanding the vertical ramifications is paramount,” he explained.

“All of the greatest IoT IT opportunities – from the connected home, smart meters, the connected car, and smart grid to personal wellness and connected health – are driven from a vertical market perspective.”

According to Tiazkun, the IoT market must be understood in terms of vertical markets, as the value of IoT is based on individual use cases across all markets.

“Successful sales and marketing efforts by vendors will be based on understanding the most lucrative verticals that offer current growth and future potential and then creating solutions for specific use cases that address industry-specific business processes,” said the analyst. 

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“IoT already impacts our everyday life down to the smallest processes. The vertical opportunity that arises from IoT is already in play, but only if the need for vertical expertise is recognized and offered. Realizing the existence of vertical opportunity is the first step to understanding the impact – and therefore market opportunity that exists – for IT vendors.”

More specifically, IDC expects IoT technology and services revenue to expand from $4.8 trillion in 2012 to $7.3 trillion by 2017 at an 8.8% CAGR, with the greatest opportunity initially in the consumer, discrete manufacturing and government vertical industries.

Similarly, the IoT/M2M market is growing quickly, although the development of this market is not expected to be consistent across all vertical markets. 

For example, industries that already “understand” IoT will experience the most immediate growth, such as industrial production/automotive, transportation and energy/utilities. However, all verticals will reflect great opportunity.

“IoT is a derivative market containing many elements, including horizontal IT components as well as vertical and industry-specific IT elements. It is these vertical components where IT vendors will have to distinguish themselves to address industry-specific IoT needs,” Tiazkun continued.

“IoT opens up many IT vendors to the consumer market, providing B2B2C services to connect and run homes and automobiles — all the places that electronic devices will have a networking capability.

The first step to understanding how vendors can position themselves will be to analyze the components of the IoT/M2M IT ecosphere. Because this is a derivative market, there are many opportunities for vendors to offer parts or product suites that cover the needed IoT IT set. 

Vendors, Tiazkun confirmed, will have incentive to do so due to rapid growth which will occur as industries see the convenience, productivity and efficiency that IoT brings to business processes.

“While horizontal-focused IT vendors will look to offer IoT solutions that appeal to many industries, there will also be impetus to offer vertical-focused solutions that make IoT tangible for both industries applications (M2M) and consumer needs (B2B2C),” he added.

“The IoT market will greatly impact and offer the potential for vertical-aligned businesses to improve both performance and profitability. The IoT solutions space will expand exponentially and offer every business endless IoT-focused solutions. The initial strategy of businesses should be to avoid choosing IoT-based solutions that will solve only immediate concerns and lack ‘staying power.'”

IDC: 3D printing is going mainstream

Analysts at IDC have confirmed that 3D printing is now “on the verge” of mainstream adoption as businesses begin to recognize and embrace the product manufacturing benefits of the technology. According to Keith Kmetz, IDC VP, Imaging, Printing and Document Solutions, the worldwide 3D printer market will experience tremendous unit and revenue growth from 2012 to 2017, with compound annual growth rates (CAGRs) of 59% and 29%, respectively.

“Print is extending beyond output on media to the creation of an actual object, and that presents incredible opportunity,” said Kmetz. “While traditional print technologies are facing maturity, 3D printers will see worldwide unit shipments grow by 10 times over the forecast period, and worldwide hardware value will more than double in the short term.”

As Kmetz confirms, the fast-paced evolution of 3D printing has moved well beyond early adopters and hobbyists, with the technology now being utilized regularly in business applications where substantial cost and time-to-market benefits are gained.

In addition to general manufacturing/R&D applications, 3D printing tech is also finding sweet spots in aerospace, automotive, education, dental, jewelry, medical and recreation vertical industries.

“Traditional printer vendors are increasingly seeing 3D printing as an opportunity, and are getting into the game. HP is preparing to enter the market in mid-2014 and Konica Minolta is about to sign a U.S. agreement to distribute a leading manufacturer’s 3D printers. Other printer vendors will look to enter this lucrative opportunity in the near future as well,” Kmetz added.

As we’ve previously discussed on Bits & Pieces, Atmel AVR XMEGA and megaAVR MCUs can be found in the majority of 3D printers on the market, including the popular MakerBot and RepRap. Clearly, the meteoric rise of 3D printing has paved the way for a new generation of Internet entrepreneurs, Makers and do-it-yourself (DIY) manufacturers. So it comes as little surprise that the lucrative 3D printing industry remains on track to be worth a staggering $3 billion by 2016 – and $8.41 billion by 2020.

IDC says the IoT will change everything

The Internet of Things (IoT) represents a new construct in the information and communications technology (ICT) world that is occupying the minds of IT vendors, service providers and systems integrators.

According to analysts at IDC, IoT technology and services spending are projected to generate global revenues of $4.8 trillion in 2012 and $8.9 trillion by 2020, growing at a compound annual rate (CAGR) of 7.9%.

“The momentum of the Internet of Things is driven by a number of factors. There is no doubt that business and consumer demand exists and will continue to expand for IoT solutions,” confirmed Vernon Turner, Senior Vice President of IDC’s Enterprise Infrastructure, Consumer, Network, Telecom, and Sustainability Research. “I expect the current IoT use cases are just the tip of the iceberg.”

Turner identified a number of enablers for the rise of IoT, including:

• Ongoing development of smart cities, cars, and houses
• Enhanced connectivity infrastructure
• An increasingly connected culture

Carrie MacGillivray, Program Vice President, Mobile Services, M2M & Network Infrastructure, expressed similar sentiments, noting that the installed base of the IoT will be approximately 212 billion “things” globally by the end of 2020.

This, said MacGillivray, will include 30.1 billion installed “connected (autonomous) things” in 2020. The devices will largely be driven by intelligent systems tasked with collecting data – across both consumer and enterprise applications – by the end of the forecast period.

“It is important to remember that while the market for the Internet of Things is still in its infancy, there is a long legacy of autonomous wired connected things,” MacGillivray concluded. “The enabler for increased growth over the forecast period is the pervasiveness of wireless connectivity and ubiquitous access to the Internet regardless of location.”

IDC’s assessment comes just weeks after Morgan Stanley published a comprehensive report analyzing the rapidly evolving Internet of Things (IoT). Essentially, the report defines the IoT as an “army of tens of billions of tiny robots” making life easier for users on a global scale.

“While this may seem a simplistic definition, in our view it summarizes very well the aim of the Internet of Things. It is like an army of small semiconductor based robots, all connected and able to take decisions on their own or based on higher level decision making. The Internet of Things is the next generation of personal computing, whereby objects interact, potentially independently, with each other and with their environment,” the report (via Barron’s) opined.

“[In reality], this is more of an historical definition, as it positions the Internet of Things as the next evolutionary step for personal computing […] The Internet of Things is the combination of sensors, actuators, distributed computing power, wireless communication on the hardware side and applications and big data/analytics on the software side. This is more of a functional definition, but it shows that there are many prerequisites for the Internet of Things to exist.”

As previously discussed on Bits & Pieces, the IoT represents perhaps the greatest potential growth market for semiconductors over the next several years. And that is why Atmel remains focused on designing the absolute lowest power sipping products, particularly with regards to microcontrollers (MCUs).

Simply put, Atmel MCUs are designed to deliver maximum performance and meet the requirements of advanced applications. That is why we offer highly integrated architecture optimized for high-speed connectivity, optimal data bandwidth and rich interface support – making them ideal for powering the smart, connected products at the heart of the IoT.