The Internet of Things is on track to be an absolutely huge market.
BI Intelligence predicts that by 2019:
- IoT device shipments will reach 6.7 billion.
- Revenues from devices, services, and software will reach $600 billion.
- A massive $1.7 trillion of value will be added to the economy in the form of revenues and efficiency cost savings.
A new report from BI Intelligence finds that there are four key elements that are driving the explosion in the IoT. The report also provides downloadable charts, forecasts, and analysis on how the IoT market will develop over three main sectors — home, government/infrastructure, and enterprise.
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Here are the four important factors propelling the IoT forward:
- The cost of internet-connected sensors is coming down: Many IoT devices rely on multiple sensors to monitor the environment around them. The cost of these sensors declined 50% in the past decade, according to Goldman Sachs. We expect prices to continue dropping at a steady rate, leading to an even more cost-effective sensor.
- A lot more money is being poured into the IoT: Large companies like Dell have begun to aggressively open IoT divisions and innovation labs. There have also been a range of IoT acquisitions including Google acquiring Nest and Intel acquiring Basis. In addition, innovative IoT startups, such as IoT cloud-platform provider Electric Imp and smart plug maker Zuli, have received a combined $70 million in funding just this summer.
- Expanded internet connectivity: The International Telecommunication Union (ITU) estimates that currently 40% of the global population is connected to the internet and by 2019, roughly 57% will be connected. This increase in connectivity will lead to a larger base of individuals interested in purchasing IoT devices.
- High adoption of "remotes," especially smartphones, phablets and tablets: The IoT is heavily reliant on "remotes," primarily smartphones and tablets that can manage the IoT. Today, smartphones account for 69% of mobile phones sold globally, and their share is still rising as developing nations introduce better wireless infrastructure.
In full, the report:
- Defines what devices we include in the IoT and how the devices will be controlled
- Forecasts the potential size of the IoT by 2019 in terms of revenue, number of devices, and value-added to the economy
- Examines why factors including the drop in sensor prices, increases in internet penetration, and current sales of smartphones and tablets are the drivers of rapid IoT growth
- Looks at how the home, government, and enterprise sectors use the IoT differently, and lists possible future uses
- Identifies the major consortia of IoT companies and examines what they are doing to help drive IoT growth
- Compares our device estimates to those of other research firms
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