Internet of Things (IoT) is the networking of physical devices, often referred to as connected devices, via the Internet. These physical devices are embedded systems, which use hardware (processors, sensors, connectivity ICs, memory devices, and logic devices), software solutions, and platforms to connect with each other. These technologies allow the exchange of data between these devices and collectively constitute the IoT technology market.
The IoT technology market is expected to grow from USD 176.00 Billion in 2016 to USD 639.74 Billion by 2022, at a CAGR of 25.1% during the forecast period. Major drivers for the growth of the IoT technology market are the increasing adoption of cloud platforms, the declining cost of smart sensors, and increasing investments by major giants of this industry in the IoT market.
The IoT technology market has been segmented into node component, network infrastructure, software solution, platform, and service. The software solution segment held a major share of the market in 2016. The significant growth in the number of connected devices and the requirement for data storage and analysis are the key factors leading to the dominance of this segment.
Of all the major end-use applications, the industrial end-use application held the largest share of the IoT technology market in 2016. The growth of the industrial application was primarily driven by the need to implement predictive maintenance techniques in industrial equipment to monitor their working and to avoid unscheduled downtimes in the production cycle. Furthermore, the government initiatives such as Industrie 4.0 in Germany and Plan Industriel in France are also promoting the implementation of the IoT solutions for the industrial end-use application.
The IoT technology market for the BFSI end-use application is expected to grow at the highest CAGR from 2017 to 2022, followed by building automation. The mass adoption of online banking, contactless payment, and mobile banking apps has increased significantly. Banks are trying to create intelligent and personalized customer cross-selling opportunities, which would drive the market of IoT technology.
Of all the regions, North America held the largest market share of the overall IoT technology market in 2016. An established IT ecosystem and the early adoption of various IoT-enabled products across multiple end-user applications are the most prominent factors behind the growth of the market in this region. The IoT technology market in APAC is expected to grow at the highest CAGR from 2017 to 2022 owing to the huge investments by the companies for the development of IoT and the growing penetration of the Internet across commercial as well as residential spaces, high consumer base, and improving IT infrastructure.
One of the key restraining factors of the overall IoT technology market is the lack of privacy and security of data. As the number of connected devices is increasing with the growth in the adoption rate of IoT in end-use applications, a huge amount of data are being generated. Cyber criminals can hack into systems and use these data to automatically determine one’s car insurance, evaluate health status, track the behavior of a company’s strategy, and so on. Although encryption security keys can be used to secure the data, the key management would still be a major concern. The data security concern will continue to prevail and is expected to affect the demand for software and hardware for IoT applications, leading to the need for the development of more secure and highly encrypted chipsets in the near future.
The companies profiled in this report are Intel (US), QUALCOMM (US), Texas Instruments (US), International Business Machines (US), STMicroelectronics (Switzerland), General Electric (US), Hewlett Packard Enterprise (US), Cisco Systems (US), Microsoft (US), Amazon Web Services (US), Symantec (US), PTC (US), and Alphabet (US). The report also covers some of the new players in the Internet of Things (IoT) Technology market such as Ayla Networks (US), Losant IoT (US), Notion (US), Pepper (US), and Helium Systems (US).
The manufacturers of IoT technology products, which are constantly striving for technology innovation, play a major role in the IoT ecosystem. These players demonstrate significant product innovations compared with other competitors in the IoT ecosystem. Players under this category have a focused product portfolio. Major innovators in the IoT technology market are Schneider Electric (France), Rockwell Automation (US), and Siemens (Germany), among others.