IDC Forecasts Worldwide Spending on the Internet of Things to Reach $772 Billion in 2018

IDC Forecasts Worldwide Spending on the Internet of Things to Reach $772 Billion in 2018

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FRAMINGHAM, Mass.–()–Worldwide spending on the Internet of Things (IoT) is forecast to reach
$772.5 billion in 2018, an increase of 14.6% over the $674 billion that
will be spent in 2017. A new update to the International Data
Corporation (IDC)
Worldwide
Semiannual Internet of Things Spending Guide
forecasts worldwide IoT
spending to sustain a compound annual growth rate (CAGR) of 14.4%
through the 2017-2021 forecast period surpassing the $1 trillion mark in
2020 and reaching $1.1 trillion in 2021.

IoT hardware will be the largest technology category in 2018 with $239
billion going largely toward modules and sensors along with some
spending on infrastructure and security. Services will be the second
largest technology category, followed by software and connectivity.
Software spending will be led by application software along with
analytics software, IoT platforms, and security software. Software will
also be the fastest growing technology segment with a five-year CAGR of
16.1%. Services spending will also grow at a faster rate than overall
spending with a CAGR of 15.1% and will nearly equal hardware spending by
the end of the forecast.

“By 2021, more than 55% of spending on IoT projects will be for software
and services. This is directly in line with results from IDC’s 2017
Global IoT Decision Maker Survey where organizations indicate that
software and services are the key areas of focused investment for their
IoT projects,” said Carrie
MacGillivray
, vice president, Internet
of Things
and Mobility
at IDC. “Software creates the foundation upon which IoT applications and
use cases can be realized. However, it is the services that help bring
all the technology elements together to create a comprehensive solution
that will benefit organizations and help them achieve a quicker time to
value.”

The industries that are expected to spend the most on IoT solutions in
2018 are manufacturing ($189 billion), transportation ($85 billion), and
utilities ($73 billion). IoT spending among manufacturers will be
largely focused on solutions that support manufacturing operations and
production asset management. In transportation, two thirds of IoT
spending will go toward freight monitoring, followed by fleet
management. IoT spending in the utilities industry will be dominated by
smart grids for electricity, gas, and water. Cross-Industry IoT
spending, which represent use cases common to all industries, such as
connected vehicles and smart buildings, will be nearly $92 billion in
2018 and rank among the top areas of spending throughout the five-year
forecast.

“Consumer IoT spending will reach $62 billion in 2018, making it the
fourth largest industry segment. The leading consumer use cases will be
related to the smart home, including home automation, security, and
smart appliances,” said Marcus
Torchia
, research director, Customer
Insights & Analysis
. “Smart appliances will experience strong
spending growth over the five-year forecast period and will help to make
consumer the fastest growing industry segment with an overall CAGR of
21.0%.”

Asia/Pacific (excluding Japan) (APeJ) will be the geographic region with
the most IoT spending in 2018 – $312 billion – followed by North America
(the United States and Canada) at $203 billion and Europe, the Middle
East, and Africa (EMEA) at $171 billion. China will be the country with
the largest IoT spending total in 2018 ($209 billion), driven by
investments from manufacturing, utilities, and government. IoT spending
in the United States will total $194 billion in 2018, led by
manufacturing, transportation, and the consumer segment. Japan ($68
billion) and Korea ($29 billion) will be the third and fourth largest
countries in 2018, with IoT spending largely driven by the manufacturing
industry. Latin America will deliver the fastest overall growth in IoT
spending with a five-year CAGR of 28.3%.

The Worldwide
Semiannual Internet of Things Spending Guide
forecasts
IoT spending for 14 technologies and 54 use cases across 20 vertical
industries in eight regions and 53 countries. Unlike any other research
in the industry, the comprehensive spending guide was designed to help
vendors clearly understand the industry-specific opportunity for IoT
technologies today.

About IDC Spending Guides
IDC’s Spending Guides provide a
granular view of key technology markets from a regional, vertical
industry, use case, buyer, and technology perspective. The spending
guides are delivered via pivot table format or custom query tool,
allowing the user to easily extract meaningful information about each
market by viewing data trends and relationships.

For more information about IDC’s Spending Guides, please contact Monika
Kumar at mkumar@idc.com.

About IDC
International Data Corporation (IDC) is the
premier global provider of market intelligence, advisory services, and
events for the information technology, telecommunications, and consumer
technology markets. With more than 1,100 analysts worldwide, IDC offers
global, regional, and local expertise on technology and industry
opportunities and trends in over 110 countries. IDC’s analysis and
insight helps IT professionals, business executives, and the investment
community to make fact-based technology decisions and to achieve their
key business objectives. Founded in 1964, IDC is a wholly-owned
subsidiary of IDG,
the world’s leading media, data and marketing services company that
activates and engages the most influential technology buyers. To learn
more about IDC, please visit www.idc.com.
Follow IDC on Twitter at @IDC
and LinkedIn.

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December 7, 2017 at 12:17PM

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