Tag Archives: IoT Report

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

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

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: IoT devices will nearly triple by 2020 to reach 38 billion

Over 80% of companies increased revenue by investing in Internet of Things, a new study has found.

While there already may be more than two connected devices accessing the web for every person on Earth, this is merely the ground floor of the Internet of Things’ gargantuan promise.


In fact, new data from Juniper Researcher has revealed that the number of smart devices is expected to surpass 38.5 billion in 2020, up from 13.4 billion in 2015, constituting an increase of 285%. And though it may appear that connected home-centric applications have been the focus of attention as of late, it will actually be the industrial and public services sector – such as retail, agriculture, buildings and smart grid applications – that will form the majority of the user base.

The report goes on to list Michelin and John Deere as examples of companies who have successfully transitioned their businesses towards being service-based companies through the use of IoT, as opposed to their previous incarnations as product vendors. Most notably, the tire maker has begun deploying sensors in trucks to monitor driver performance and better mange fuel consumption, while the tractor giant has been using smart machinery to provide real-time analysis to farmers.

Juniper notes that interoperability will play a pivotal role in the IoT’s progression. While conflicting standards continues to slow down its pace, there are signs that standards bodies and alliances are beginning to come together to overcome these hurdles.

“The IoT represents the combination of devices and software systems, connected via the Internet, that produce, receive and analyze data. These systems must have the aim of transcending traditional siloed ecosystems of electronic information in order to improve quality of life, efficiency, create value and reduce cost,” Juniper added.

Aside from that, Tata Consulting Services has published a study that suggests 26 companies (including 14 in the United States) plan on spending $1 billion or more on IoT initiatives this year. These organizations will stem from seven industries: six from banking and financial services, five from automotive, four from travel, hospitality and transportation, four from high tech, three from insurance, two telecommunications firms, one from retail and another from healthcare.

Manufacturing along with the travel, hospitality and transportation sectors are planning to spend 0.6% of revenue this year, while media and entertainment companies will dish out 0.57% — this is significantly more than the 0.4% average spending in banking and financial services. The report also shows that companies predict their IoT budgets to continue increasing year-on-year, with spending expected to grow by 20% by 2018 to $103 million.

“Across the board, those companies investing in IoT are reporting significant revenue increases as a result of IoT initiatives with an average increase of 15.6% in 2014. Almost one in ten (9%) saw a rise of at least 30% in revenue,” TCS writes. “Company executives still see the IoT as a growing area for businesses, with 12% identifying a planned spend of $100 million in 2015 and 3% looking to invest a minimum of $1 billion among the 795 companies surveyed.”

Companies at the very forefront of this drive for innovation through IoT have seen the biggest benefits from their investments. The top 8% of respondents, based on ROI from IoT, demonstrated a staggering 64% average revenue gain in 2014 as a direct result of these investments. TCS points out that the biggest business impact, at the moment, is that companies can offer their customers more bespoke products and services. Yet, by 2020, this will convert from marketing functions to increased sales, through adding considerable value to the customer.


This is reflected in the finding that the most frequent use of IoT technologies by companies is tracking customers through mobile apps, used by almost half of all businesses (47%). Over 50% of IoT leaders admit to investing in IoT to track their products and how these were performing, whereas this is only the case with 16.1% of the respondents with the lowest ROI from IoT.  What’s more, nearly eight in 10 enterprises (79%) surveyed claim to have IoT initiatives in place at the moment to better understand customers, products, the locations in which they do business with customers or their supply chains.

According to the study, revenue increases are being experienced worldwide with all regions reporting double-digit growth in 2014. However, it’s the U.S. firms that have enjoyed the largest gains of 18.8%. Europe as a whole is seeing a 12.9% jump, while APAC has shown a 14.1% rise and Latin America an impressive 18.3%.

Meanwhile, North American companies will spend 0.45% of revenue this year on IoT initiatives, while European companies will spend 0.40%. APAC companies will invest 0.34% of revenue in the IoT, and Latin American firms will spend 0.23% of revenue. This has led to North American and European companies more frequently selling smart, connected products than are APAC and Latin American companies.

Despite the encouraging data on investment and its impact on revenue growth, the report found that major challenges remain in realizing the promise of the Internet of Things for businesses across all sectors, namely corporate culture (ability to get employees to change the way they think), leadership (having top executives who believe in the IoT) and technology (questions around big data, integration with enterprise systems and security).

The healthcare sector has been hailed as having the greatest potential to benefit from the IoT, but remains one of the most underdeveloped industries due to regulatory restrictions and data security concerns that currently hinder innovation. The sector plans to spend just 0.3% of revenue in 2015, but will be increasing this investment by at least 30% come 2018. In comparison, executives in the industrial manufacturing sector are reporting the largest increase in revenue from IoT, with an average 28.5%, followed by financial services (17.7%), and media and entertainment (17.4%). The automotive industry has the lowest revenue gain with just a 9.9% increase.

[Image: Tata Consultancy Services]

6 reasons why the IoT’s true value remains untapped

The Internet of Things could generate up to $11.1 trillion a year in economic value by 2025, McKinsey report says.

As if you hadn’t heard enough of the hype surrounding the Internet of Things, in comes McKinsey Global Institute’s 142-page report that reveals quite the opposite of some other analysts. In fact, the firm believes that we’re underestimating the potential impact of a more connected, much smarter world. By 2025, McKinsey says that the potential economic influence of the IoT, or what it defines as “having sensors and actuators connected by networks to computing systems,” could be anywhere from $3.9 to $11.1 trillion annually. This includes profits to device makers, efficiencies, new businesses and savings to consumers from better-run products.

(Source: McKinsey Global Institute,

(Source: McKinsey Global Institute / “Unlocking the potential of the Internet of Things”)

The biggest gains will be made by companies that can successfully figure out how to adapt to the next-gen technology, whether that’s more autonomous oil-drilling platforms or intelligent city traffic lights. Whatever the case, McKinsey notes that the economic opportunity created by the ever-growing IoT has barely been scratched. Here are six reasons why:

1. Only 1% of the data constantly being sent by sensors and RFID tags is being utilized. That’s because this information is used mostly to detect and control anomalies, not for optimization and prediction, which provide the greatest value.

2. Only focusing only on industries, not “settings. Instead of focusing on various verticals, McKinsey delves deeper into the changes taking place in nine different physical “settings” where the IoT can actually be deployed, such as the home, retail stores, offices, factories, industrial sites, inside vehicles, health and wellness, logistics and navigation, as well as cities. Of that $11 trillion in economic value, four of the nine settings top out at over $1 trillion in projected economic value – factories ($3.7 trillion), cities ($1.7 trillion), health and fitness ($1.6 trillion) and retail ($1.2 trillion). For example, the value of improved health of chronic disease patients through remote monitoring could be as much as $1.1 trillion per year in 2025.

(Source: McKinsey Global Institute /

(Source: McKinsey Global Institute / “Unlocking the potential of the Internet of Things”)

3. Only thinking about B2C applications, not B2B. Ironically, B2B use cases will probably capture nearly 70% of the value than consumer use cases, although consumer applications like wearable fitness monitors and self-driving cars garner the most mainstream attention and can create significant value as well.

4. Ignoring the fact that “interoperability” could be the new “synergy,” in that it can increase the world without increasing the sum of the parts. According to McKinsey, approximately 40% of the total economic value of the IoT is driven by the ability of all the physical devices to talk to each other via computers. Adopting open standards is one way to accomplish interoperability, while the study points out that it can also be achieved by implementing systems or platforms that enable different IoT systems to communicate with one another. If machines can’t talk to each other, the report highlights that the market may only be a $3.9 trillion opportunity.

5. Underestimating the affect on developing economies. In terms of economic impact, there will be approximately a 60:40 split between economic gains for developed economies and developing economies. What’s more, McKinsey believes some of the greatest gains will be in developing nations, contingent upon setting, industry, and application. In other cases, these nations will be able to “leapfrog” others in IoT implementation given that there is no retrofitting of existing equipment or infrastructure. Nevertheless, the firm estimates that 62% of the potential annual economic impact of IoT applications in 2025 will be in advanced economies and that 38% will be in developing economies. As the values in developing economy markets rise, as will the economic impact associated with IoT.

(Source: McKinsey Global Institute /

(Source: McKinsey Global Institute / “Unlocking the potential of the Internet of Things”)

6. Forgetting about the new business models that will be formed. As in other technology waves, both incumbents and new players have opportunities. It’s not just that the Internet of Things will lead to efficiencies and cost savings, but it will lead to entirely new ways of doing business, too. Digitization blurs the lines between technology and other types of companies, like makers of industrial machinery, who are creating new business models by using IoT links and data to sell products-as-services.

“The digitization of machines, vehicles, and other elements of the physical world is a powerful idea. Even at this early stage, the IoT is starting to have a real impact by changing how goods are made and distributed, how products are serviced and refined, and how doctors and patients manage health and wellness,” McKinsey writes. “But capturing the full potential of IoT applications will require innovation in technologies and business models, as well as investment in new capabilities and talent. With policy actions to encourage interoperability, ensure security, and protect privacy and property rights, the Internet of Things can begin to reach its full potential—especially if leaders truly embrace data-driven decision making.”

Want to download the entire report? You can find it here.

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

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

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: Internet of Things to reach 30 billion devices in 2020

The global Internet of Things (IoT) market will increase 13% to just over $3 trillion in 2020, a new IDC forecast has revealed. During this timespan, the number of installed and connected devices is expected to surpass 30 billion.


IDC defines the IoT as a “network of networks of uniquely identifiable endpoints (or ‘things’) that communicate without human interaction using IP connectivity – be it ‘locally’ or globally.” This connected ecosystem includes everything from intelligent systems and network equipment to data integration and other types of software, applications, services and security.

As IoT moves beyond the hype and promise, a variety of vendor strategies and key players will emerge to find success in meeting customers’ needs as well as growing new revenue streams from this net new market opportunity, IDC points out.

“The opportunities presented by IoT are driving widespread attention among both traditional and non-traditional ICT vendors looking to take advantage of emerging revenue opportunities,” explained Vernon Turner, IDC Senior Vice President. “We’re still in the early stages of maturation and IoT represents unparalleled opportunity in government, consumer, and enterprise environments.”


The research firm notes that homogeneity of connectivity needs has enabled the North American market to sidestep border-driven IoT adoption challenges and set the groundwork for IoT market growth. In addition, government mandates and more openly eco-conscious cultures will drive the Western Europe and APAC regions to outpace North America in terms of IoT revenues and installed base through 2020.

“There will be no one leader in this market,” added Carrie MacGillivray, Vice President, IoT and Mobile Service & Infrastructure. “The market will rely on partnerships, federation, and innovative services to create truly valuable IoT solutions.”

Evident by the emergence of recent [Atmel powered] Kickstarter and Indiegogo campaigns, startups are working feverishly to carve out their strategies to capitalize on this market and will ultimately drive the innovation pace of larger vendors. Gartner recently revealed that by 2017, over half of the IoT solutions on the market will originate from startups that are less than three years old.

IDC isn’t the only research firm anticipating an uptick for the Internet of Things market. In fact, Gartner predicts that there will be 26 billion installed units by 2020, up from 0.9 billion just five years ago. The firm also believes the IoT processor, sensor and communications markets are set for 30% growth over the next five years.

Meanwhile, Strategy Analytics has stated that there will be 4.3 connected devices for every person on earth come 2020, when 33 billion devices are expected to be in use throughout the world. Cisco has also been an aggressive advocate of IoT, noting that not only are 13.5 billion devices are connected today, but there will be 50 billion device connections by the end of this decade.


While some projections are a bit more optimistic than others, it is without question the IoT will surely go mainstream over the next couple of years. As we’ve previously discussed on Bits & Pieces, the rapidly evolving IoT represents perhaps the greatest potential growth market for semiconductors throughout this time period. And, that is precisely why Atmel remains focused on designing the absolute lowest power sipping products, particularly with regards to MCUs. Whether it’s bringing wireless capabilities to an embedded design or securely connecting an IoT application, we’re making it easier than ever to create the smarter world of tomorrow.

Don’t forget, you can experience all the latest in IoT firsthand this week at Electronica 2014! From November 11-14th, head on over to Messe München where you will find a plethora of smart solutions throughout the the Atmel booth — located in Hall A5, Booth 542.


Report: Four connected devices for every person in the world by 2020

According to a new report from Strategy Analytics, there will be nearly 12 billion connected devices in use worldwide by the end of 2014. That is equivalent to 1.7 devices for every person on the planet, a ratio which will rise to 4.3 come 2020, when 33 billion devices are expected to be in use.

Strategy Analytics Global Internet Device

The report, entitled “Connected World: The Internet of Things and Connected Devices in 2020,” quantifies the scale of the connected device opportunity across the Internet of Things (IoT), smart home, smartphones, PCs, tablets, smart TVs and wearables.

“Back in 2007 PCs accounted for two-thirds of Internet devices — now it’s only 10 percent,” reveals David Mercer, Principal Analyst at Strategy Analytics. “The impact of the Internet on daily lives has increased rapidly in recent years. Huge growth potential still lies ahead, in terms of both the number of devices relying on Internet connectivity and its geographic reach.”

As Strategy Analytics reveals, emerging categories alone will connect an additional 17.6 billion devices to the Internet by 2020, with IoT leading to rapid growth among new categories such as M2M, smart objects, smart grid and smart cities.

Evident by this recent study, a new generation of connected products is well upon us. From smart meters to wearables, we can expect to see an emergence of web and wireless-enabled devices embedded with Atmel | SMART ARM-based microcontrollers.

“The Internet of Things has already connected five billion devices and we are only at the beginning of this revolution,” explains Strategy Analytics Executive Director Andrew Brown. “Smart cities and smart grid are just two of the ways in which the Internet of Things will touch everyone’s lives over the coming years and decades.”

In fact, the Internet of Things is forecasted to become the world’s most massive device market. BI: Intelligence estimates that by 2019, the IoT will account for more than double the size of the smartphone, PC, tablet, connected car, and the wearable market combined


Additionally, these smart gadgets will result in an additional $1.7 trillion in value to the global economy in 2019, which includes hardware, software, installation costs, management services, and economic value added from realized IoT efficiencies. BI: Intelligence goes on to note that device shipments will reach 6.7 billion in 2019 for a five-year CAGR of 61%.

It is believed that the enterprise sector will lead the IoT pack, accounting nearly half (46%) of device shipments in 2014; however, that share will surely be reduced as the government and smart home markets continue to gain momentum. Government will be the leading sector for IoT device shipments within the next five years, says Business Insider.


Furthermore, during the recent Internet of Things World Forum, Cisco Chief Globalization Officer Wim Elfrink explored the ways in which the IoT will transcend well beyond consumer-centric connections and transform traditional industries with billions upon billions of sensors.

Elfrink said more than 3 billion objects have been digitally connected over the last year and that the number is growing by 300,000 things every hour. “And, one percent of all things that can be connected, are connected,” he added.

Cisco engineers believe that today 13.5 billion devices are connected and predict that by 2020 there will be 50 billion device connections. Elfrink recounted Cisco’s announcement of 10 billion connected things back in 2013, comparing it to 30 years ago, where he said only 3,000 things were connected.

It is without question that the Internet of Things is surging ahead. Whether it’s bringing wireless capabilities to an embedded design or securely connecting an IoT application, Atmel is making it easier than ever to create our smarter world of tomorrow.

69% of consumers will own an in-home IoT device by 2019

According to recently released study by Accenture’s Acquity Group, 69% of consumers will own an in-home Internet of Things (IoT) device within the next five years. Additionally, the “State of the Internet of Things” report revealed that by the end of 2015, 13% of consumers will have at least one IoT device in their house, such as a thermostat or in-home security camera, tripling today’s 4% ownership.

IoT_Graph_AUG 19

At the same time, sales of wearable technology, like smartwatches and fitness bands, are expected to initially grow faster than the market for connected appliances in the home but somewhat slower over the longer haul. The firm found that just shy of half (43%) of the respondents planned to purchase a wearable device in the next five years, while 22% said they already owned or plan to buy one by 2015.

“These digital devices present major opportunities for improving a brand’s customer experience for a range of consumers. Our data reveals that it’s not only tech enthusiasts who are interested in these kinds of products, but late adopters who also express interest in buying them,” Acquity Group President Jay Dettling said in a statement.

The study, which surveyed more than 2,000 consumers across the United States, found 78% of “late adopters” believed they’d be purchasing a home IoT product in the next five years, while 62% planned on buying a wearable device in that time period.

A pair of major smart home product categories seem to be well poised for strong growth. Accenture highlighted that while only 13% of respondents intend buying a smart thermostat for their homes in the next year, 43% will likely do so by 2019. In addition, 11% of those polled believe they will be installing connected security systems this year or next, with 35% saying they’d do so by 2019.

“On the whole, most devices today aren’t connected nor are they intelligent. By connecting devices ranging from fitness wearables to devices inside the home, I am expecting huge growth over the next five years,” explained Patrick Moorhead, Lead Analyst for Moor Insights & Strategy.

Unfortunately, smart clothing and heads-up displays are expected to see the least overall adoption, with only 3% projected adoption in the next year, and 14-16% over the next five years.


As Internet-enabled devices ranging from home automation to wearables proliferate over the next five years, one can expect to find Atmel | SMART microcontrollers embedded inside.

Interested in more of the study’s findings? You access the entire “State of the Internet of Things” report here.