Transforma Insights, led by veteran Internet of Things (IoT) analysts Jim Morrish and Matt Hatton, says it has established a new benchmark for global IoT forecasts, by publishing the first iteration of its “granular” Total Addressable Market (TAM) database based on analysis of hundreds of applications.
At the end of 2019 there were 7.6 billion active IoT devices. According to new research published by Transforma Insights, this total will grow to 24.1 billion in 2030, a compound annual growth rate (CAGR) of 11%.
Short range technologies, such as Wi-Fi, Bluetooth and Zigbee, will dominate connections, accounting for 72% in 2030, largely unchanged compared to the 74% it accounts for today. Public networks, which are dominated by cellular networks, will grow from 1.2 billion connections to 4.7 billion in 2030, growing market share from 16% to 20%. Private networks account for the balance of connections, 10% in 2019 and 8% in 2030.
In revenue terms, the total IoT market in 2019 was worth US$465 billion (€424 billion), a figure which will rise to US$1.5 trillion (€1.3 trillion) in 2030. Services, including connectivity, will account for 66% of spend, with the remainder accounted for by hardware, in the form of dedicated IoT devices, modules and gateways.
Commenting on the forecasts, Transforma Insights founding partner Jim Morrish says: “Matt and I are delighted to be back providing the highly granular and rigorously compiled IoT market forecasts with which we have been associated in the past. The value of a robust set of market data from a reputable source is not to be underestimated when planning to address the market opportunity.”
The consumer sector will dominate in terms of connected devices, accounting for 65% of all connections, up from 62% in 2019. Of the enterprise segment in 2030, 34% of devices will be accounted for by ‘cross-vertical’ use cases such as generic track-and-trace, office equipment and fleet vehicles, 31% by utilities, most prominently smart meters, 5% by transport and logistics, 4% by government, 4% for agriculture, and 3% each for financial services and retail/wholesale.
The single use case is Consumer Internet & Media devices, accounting for a third of all devices in 2030. The next largest is Smart Grid, including smart meters, representing 14% of connections. Connected Vehicles, dominated by connected cars, is the third biggest category, representing 7% of the global installed base.
l terms, the biggest vertical sector is Consumer, generating $652 billion (€592 billion) in revenue, or 43% of the total market value. Cross-vertical applications account for 24%. The remaining 33% is sector-specific applications across sectors such as energy, transport, retail and healthcare. Transforma Insights founding partner Matt Hatton notes, “One of the benefits of building a highly granular set of forecasts is that we can uncover striking trends, such as the huge $500 billion (€456 billion) revenue opportunity associated with a diverse range of niche vertical-specific applications.”
Geographically, China, North America and Europe dominate, accounting for 26%, 24% and 23% respectively of the total value of the IoT market in 2030.
Completing these forecasts has been complicated by an unpredictable business environment. Matt Arnott, principal analyst leading the forecasts at Transforma Insights, explains: “Naturally Covid-19 has loomed large in our consideration when completing these forecasts, having arisen during the process of compiling them. In a way the timing couldn’t have been worse, requiring a radical retake half-way through the process. However, it has allowed us to ensure that these forecasts take account of the impact in every number that we publish.
A forthcoming blogpost will provide further analysis of the impact of Covid-19 and how we have adjusted our forecasts to reflect the change.
About the forecast
The forecasts presented here are taken from Transforma Insights’ Total Addressable Market (TAM) Forecast Database. The TAM Forecasts provide our quantitative view of the market opportunity associated with Digital Transformation and all of the associated technologies.
The IoT Connected Things forecasts presented are based on an extensive and highly granular research methodology, which involves analysing over 300 combinations of application and vertical across each of 196 countries.
The TAM Forecast Database presents forecasts from 2019 to 2030 for Revenue Generating Units (RGUs), connected devices and gross additions (split between public, private and short range) and revenue (split between hardware and recurring) across 20 use cases, 67 application groups, 20 vertical sectors and 12 geographical regions.
A second phase, to be released in September 2020 will include further granular technology and revenue splits. Click here to find out more about Transforma Insights research.