(Copyright: IDC)
An update to IDC’s IoT spending guide reveals that worldwide spending on IoT is predicted to reach $772.5 billion (€658.3 billion) in 2018.
The new update, added to IDC’s Worldwide Semiannual Internet of Things Spending Guide, predicts that worldwide spending on Internet of Things (IoT) will reach $772.5 billion (€658.3 billion) in 2018, an increase of 14.6 percent on the $674 billion (€574.4 billion) which will have been spent in 2017.
In addition, the update forecasts “worldwide IoT spending to sustain a compound annual growth rate (CAGR) of 14.4. percent through the 2017-2021 forecast period surpassing the $1 trillion (€852 billion) mark in 2020 and reaching $1.1 trillion (€973.2 billion) in 2021.”
IoT hardware “will be the largest technology category in 2018 with $239 billion (€203.6 billion) going largely toward modules and sensors along with some spending on infrastructure and security.” Services is the second largest category, followed by software and then connectivity.
“By 2021, more than 55 percent of spending on IoT projects will be for software and services. This is directly in line with results from IDC’s 2017 Global IoT Decision Maker Survey where organizations indicate that software and services are the key areas of focused investment for their IoT projects,” said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC. “Software creates the foundation upon which IoT applications and use cases can be realized. However, it is the services that help bring all the technology elements together to create a comprehensive solution that will benefit organizations and help them achieve a quicker time to value.”
Industries predicted to plough the most investment into IoT are manufacturing ($189 billion/€160.9 billion), transportation ($85 billion/€72.396 billion) and utilities ($73 billion/€62.175 billion). According to IDC, “IoT spending among manufacturers will be largely focused on solutions that support manufacturing operations and production asset management. In transportation, two thirds of IoT spending will go toward freight monitoring, followed by fleet management. IoT spending in the utilities industry will be dominated by smart grids for electricity, gas, and water. Cross-Industry IoT spending, which represent use cases common to all industries, such as connected vehicles and smart buildings, will be nearly $92 billion (€78.357 billion) in 2018 and rank among the top areas of spending throughout the five-year forecast.”
“Consumer IoT spending will reach $62 billion (€52.805 billion) in 2018, making it the fourth largest industry segment. The leading consumer use cases will be related to the smart home, including home automation, security, and smart appliances,” said Marcus Torchia, research director, Customer Insights & Analysis. “Smart appliances will experience strong spending growth over the five-year forecast period and will help to make consumer the fastest growing industry segment with an overall CAGR of 21.0 percent.”