The global IoT market is expected to reach a value of USD 1,386.06 billion by 2026 from USD 761.4 billion in 2020 at a CAGR of 10.53%, during the forecast period (2021-2026). During the Covid-19 pandemic, the vendors in the market are collaborating with several organizations to offer emerging technology-enabled solutions to the healthcare organizations, to help them ovrcome the crisis effectively. For instance, at the end of January, the Shanghai Public Health Clinical Center (SPHCC) has used the California-based connected health startup VivaLNK's continuous temperature measuring device to monitor COVID-19 patients, which therefore reduces the risks of caregivers being exposed to the virus.
- With the development of wireless networking technologies, the emergence of advanced data analytics, a reduction in the cost of connected devices, an increase in cloud platform adoption, the market is expected to grow at a positive rate.
- The internet of things technology helps in connecting various smart devices together to ease the operation and sharing of data amongst themselves. There are various smart devices, such as sensors, smartphones, and wearables, which collect necessary data from the devices which are further utilized to enhance customer's experience. The increasing need for data analysis and integration of analytics is expected to propel the utilization of the Internet of Things market over the forecast period.
- Industry 4.0 and IoT are at the center of new technological approaches for development, production, and management of the entire logistics chain, otherwise known as smart factory automation. Massive shifts in manufacturing due to industry 4.0 and acceptance of IoT require enterprises to adopt agile, smarter, and innovative ways to advance production with technologies that complement and augment human labor with robotics and reduce industrial accidents caused by a process failure.
Key Market Trends
Retail Segment to Witness a Significant Growth
- The retail industry is witnessing significant growth in the last two years, especially with the massive expansion of the e-commerce industry, across the globe. Hence, the retailers are not only utilizing IoT solutions to improve their operational efficiency but also to enhance the customer experience to gain competitive advantages. Therefore, the reducing cost of IoT-based sensors and connectivity, customer demand for a better shopping experience, and increasing adoption of smart payment solutions are some of the major factors driving the adoption of IoT solutions in the studied segment.
- IoT is playing a significant role in process automation and enhancing the operational efficiency of retail stores. It is providing energy optimization, surveillance and security, supply chain optimization, inventory optimization, and workforce management. IoT is also gaining capabilities in cold chain monitoring for temperature-sensitive grocery and pharmaceutical goods.
- Retailers are also utilizing IoT to avoid security pitfalls, and are deploying IoT-enabled systems that can withstand jamming in their warehouses and stores. Recently, in 2020, UK-based RELX launched its first flagship store in China equipped with facial recognition cameras that can alert staff when a suspected person enters the store.
- IoT is also helping retailers to offer better customer experience, hence helping in gaining profit margins. For instance, US-based retailer Walgreens has been experimenting with IoT-enabled displays on refrigerator doors that utilize face detection technology to show ads based on approximate age and gender. Many retailers in Europe are also installing small, customizable, IoT-connected dashboards, or buttons to gather customer feedback and then use those insights to enhance customer experiences.
North America to Witness a Significant Growth
- North America is expected to be a prominent market, owing to the growing role of IoT among the significant revenue-generating end-user industries of the region, driven by the deployment of connected cars, smart energy projects, home automation, and focus on smart manufacturing. Additionally, rapid digitalization across industry verticals and technological advancements have further fueled the growth of IoT in this region.
- Moreover, the region has a strong foothold of IoT vendors, which contributes to the growth of the market. Some of them include IBM Corporation, Microsoft Corporation, Intel Corporation, Cisco Systems, Inc., and Google Inc, among others. In February 2020, Cisco announced enhancements to its IoT portfolio that enable service provider partners to provide optimized management of cellular IoT environments and new 5G use-cases. New wireless technologies such as 5G, Wi-Fi 6 - would lead to more devices and new IIoT use cases and would give service providers the tools to create competitive cellular IoT offerings for their customers. Machine-to-machine connections are anticipated to rise 19% and account for 50% of all connections by 2023, according to Cisco's 2020 Annual Internet Report.
- Another primary market in the region is the home automation systems. The products consumers are looking to add to their homes include connected cameras (highest demand), video doorbells, connected light bulbs, smart locks, and smart speakers of late. According to a study at Stanford University and Avast, North American homes have the highest density of IoT devices of any region in the world. Notably, 66% of homes in the region have at least one IoT device. Additionally, 25% of North American homes boast more than two devices. The average household in the region would have an average of 9 devices by 2022, and nearly half (48%) of total devices and connections will be video capable.
The Internet of Things (IoT) market is highly competitive owing to the presence of many large and small players in the market operating in the domestic as well as in the international market. The market appears to be fragmented due to the presence of many technological giants in the market. Key strategies adopted by the major players in the market are product innovation and mergers and acquisitions. Some of the major players in the market are Cisco Systems, Inc., Google, Inc., IBM Corporation, Microsoft Corporation among others.
- March 2020 - Microsoft & Cisco Systems announced a partnership to enable seamless data orchestration from Cisco IoT Edge to Azure IoT Cloud. One of the outcomes of this collaboration would be to provide customers a pre-integrated IoT edge-to-cloud application solution.
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