Worldwide Internet of Things (IoT) spending is forecast to reach US$745 billion in 2019, increasing 15.4% over 2018, according to IDC’s latest Worldwide Semi-annual Internet of Things Spending Guide. Looking further, IDC expects worldwide IoT spending to maintain a double-digit compound annual growth rate (CAGR) through 2017-2022 and surpass $1 trillion in 2022.
“We are increasingly observing how data generated by connected devices is helping businesses run more efficiently, gain insight into business processes, and make real-time decisions,” said Carrie MacGillivray, vice president, Internet of Things and Mobility at IDC. “For consumers, access to data is changing how they are informed about the status of households, vehicles, and their health and fitness and that of their family members. The next chapter of IoT is just beginning as we see a shift from digitally enabling the physical to automating and augmenting the human experience with a connected world.”
The industries forecast to spend the most on IoT in 2019 are discrete manufacturing ($119 billion), process manufacturing ($78 billion), transportation ($71 billion), and utilities ($61 billion). IoT spending among manufacturers will be largely focused on solutions that support manufacturing operations and production asset management. In transportation, more than half of IoT spend will go toward freight monitoring, followed by fleet management. IoT spending in utilities will be dominated by smart grids for electricity, gas and water. The industries that will see the fastest CAGR over the five-year forecast period are insurance (17.1%), government (16.1%) and healthcare (15.4%).
“Consumer IoT spending will reach $108 billion in 2019, making it the second largest industry segment. The leading consumer use cases will be related to smart home, personal wellness and connected vehicle infotainment,” added Marcus Torchia, research director, Customer Insights & Analysis. “Within smart home, home automation and smart appliances will both experience strong spending growth over the forecast period, making it the fastest growing industry segment overall, with 17.8% five-year CAGR.”
The IoT use cases that will see the greatest levels of investment in 2019 are driven by the industry spending leaders: manufacturing operations ($100 billion), production asset management ($44.2 billion), smart home ($44.1 billion), and freight monitoring ($41.7 billion). The IoT use cases that are expected to deliver the fastest spending growth over 2017-2022 identify where other industries are making their IoT investments: airport facility automation (transportation), electric vehicle charging (utilities), agriculture field monitoring (resource), bedside telemetry (healthcare), and in-store contextualized marketing (retail).
IoT services will be the largest technology category in 2019 with $258 billion going toward traditional IT and installation services as well as non-traditional device and operational services. Hardware spending will be $250 billion, of which $200 billion will be modules/sensors. IoT software spending will total $154 billion in 2019 and will see the fastest growth over 2017-2022 with a CAGR of 16.6%. Services spending will also grow faster than overall IoT spending with a CAGR of 14.2%. IoT connectivity spending will total $83 billion in 2019.