The ongoing COVID-19 pandemic is set to create the perfect storm for the internet of things (IoT) market during 2021, which is estimated to surpass US$14.3 billion by the end of the year.
According to analyst firm IDC, is this a yearly growth of 10.4 per cent. It's also expected to keep growing, with a compound annual growth rate (CAGR) of 9.5 per cent through to 2025.
Backing this growth is rising demand for smart devices, digital infrastructure, automation and growing government initiatives, which have all stemmed in the fallout of the coronavirus pandemic, IDC VP of telecom and IoT in Asia Pacific excluding Japan Hugh Ujhazy claimed.
“2020 was a volatile year around the globe. Organisations and individuals adapted to COVID-19 and adjusted course relative to how they worked and lived despite restrictions and constantly changing protocols," he said.
“Such events have highlighted the need for accelerated digital transformation and IoT based use cases can assist in delivering remote and distributed operations across the enterprise.
“Though the pandemic caused temporary slowdown in IoT investments, we expect transformation initiatives to pick up pace as enterprises look to become more resilient and thrive despite the pandemic.”
The manufacturing, utilities and transportation sectors accounted for more than 50 per cent of overall IoT spending in the region, while construction and utilities is expected to be the fastest growing sector for IoT spending this year.
Sharad Kotagi, market analyst at IDC Asia Pacific, said industrial IoT is one of the top three technologies to enable remote working, leading to improved productivity during current restrictions.
In addition, the firm’s fourth wave of its Future Enterprise Resiliency and Spending Survey found a majority of A/NZ enterprises are intending to invest in IoT-related projects over the next 12 months, which indicated to Kotagi that the market has “healthy growth” in its future.
Such projects could include manufacturing operations, production asset management, smart electricity grids and freight monitoring, which are set to be the IoT use cases with the highest spending in 2021 to make over a third of the overall IoT spending in the region.
Meanwhile, the use cases with the fastest spending growth are expected to be healthcare-related like bedside telemetry, cutting down on human interactions such as advanced payment and shopping, as well as maintenance and field services.
Additionally, the IoT services market will be the “most significant” technology group by the end of this year and through to 2025, IDC claimed, with industrial implementation and other ongoing services to make up approximately another third all IoT spending.
This claim comes as the global IoT managed services market is forecast to more than triple by 2025 to reach US$166.7 billion, according to analyst firm Frost & Sullivan.
Meanwhile, the APAC IoT market is set for substantial growth as well, with Frost & Sullivan predicting the market will hit US$436.8 billion by 2026, representing a CAGR of 28.52 per cent.