Asia-Pacific leads IoT spending growth, says IDC
December 16, 2015
Worldwide spending on the IoT will grow at a 17.0% compound annual growth rate (CAGR) from $698.6bn in 2015 to nearly $1.3tn in 2019, according to the International Data Corporation (IDC).
On a geographic basis, Asia-Pacific is the clear leader when it comes to IoT spending with more than 40% of the worldwide total coming from this region in 2015. North America and Western Europe are the second and third largest regions with combined spending of more than $250bn in 2015.
The regions that will experience the fastest growth in IoT spending over the five-year forecast period are Latin America (26.5% CAGR), followed by Western Europe, and Central and Eastern Europe.
"The Asia-Pacific region’s robust IoT spending outlook builds on three dynamics: developing countries’ technology investment needs are not fully met with traditional IT, which is allowing IoT investments to accelerate; government investments in infrastructure development and local business modernisation, in China, India and the Philippines for example, are incorporating more and more IoT elements; and a burgeoning new consumer class is accelerating expenditures in goods and services, including those with IoT components," said Marcus Torchia, IDC research manager.
From a vertical industry perspective, manufacturing and transportation led the way in worldwide IoT spending with 2015 totals of $165.6bn and $78.7bn, respectively. Over the next five years, the industries forecast to have the fastest IoT spending growth will be insurance (31.8% CAGR), healthcare and consumer. The fast expanding consumer IoT market will be the third largest IoT spending category by the end of the forecast period.
"Manufacturing and transportation are both a good fit for IoT deployments," said Vernon Turner, senior vice president and IoT research fellow. "Both industries have been connecting their supply chains, products, customers and even workers for some time now, and really embrace the value of business outcomes."
Because the IoT – a network of uniquely identifiable, autonomously communicating endpoints or things – is being applied in so many different ways across industries, it's not surprising that the fastest growing use cases vary from region to region.
In Central and Eastern Europe and the Middle East and Africa, for example, the fastest growing IoT category is smart buildings, where IoT technology that uses advanced automation and integration is being used to measure, monitor, control and optimise building operations and maintenance.
In Latin America, the fastest growing IoT category is maintenance and field service, where service data are automatically measured, recorded and transferred remotely from the field for monitoring and use by technicians.
In Asia-Pacific, insurance telematics is being used to monitor driver behaviour through a vehicle-mounted device and the data are rapidly being employed as a means of determining insurance policies and rates.
In North America, in-store contextual marketing is growing rapidly as retailers seek to capture continuous, real-time streams of data from mobile devices, online customer activity, in-store Wifi routers and beacons, and video cameras to gain insight into customer behaviour and desires.
In addition to these, connected vehicles – a broad category that includes emergency, infotainment, security, vehicle-to-vehicle (V2V) and vehicle-to-infrastructure (V2I) applications – was among the fastest growing use cases across five of the six geographic regions.