IT research group Gartner has forecasted that 8.4 billion connected things will be in use worldwide in 2017, 31% up from 2016, and will reach 20.4 billion by 2020. Total spending on endpoints and services will reach almost $2 trillion in 2017. Three regions namely Greater China, North America and Western Europe are driving the use of connected things and set to dominantly represent 67% of the overall IoT installed base in 2017.

Consumer apps to take up 63% of total IoT in 2017

The consumer segment is the largest user of connected things with 5.2 billion units in 2017; representing 63% of the overall number of applications in use (see Table 1). Businesses are on pace to employ 3.1 billion connected things in 2017. “Aside from automotive systems, the applications that will be most in use by consumers will be smart TVs and digital set-top boxes, while smart electric meters and commercial security cameras will be most in use by businesses,” said Peter Middleton, research director at Gartner.

 

| Category | 2016 | 2017 | 2018 | 2020 | | ---------- | ---------- | ---------- | ---------- | ---------- | | Consumer | 3,963.0 | 5,244.3 | 7,036.3 | 12,863.0 | | Business: Cross-Industry | 1,102.1 | 1,501.0 | 2,132.6 | 4,381.4 | | Business: Vertical-Specific | 1,316.6 | 1,635.4 | 2,027.7 | 3,171.0 | | Grand Total | 6,381.8 | 8,380.6 | 11,196.6 | 20,415.4 |

Table 1: IoT units installed base by category (millions of units). (Source: Gartner)  

In addition to smart meters, applications tailored to specific industry verticals (including manufacturing field devices, process sensors for electrical generating plants and real-time location devices for healthcare) will drive the use of connected things among businesses through 2017, with 1.6 billion units deployed. However, from 2018 onwards, cross-industry devices, such as those targeted at smart buildings (including LED lighting, HVAC and physical security systems) will take the lead as connectivity is driven into higher-volume, lower cost devices. In 2020, cross-industry devices will reach 4.4 billion units, while vertical-specific devices will amount to 3.2 billion units.

Businesses to represent 57% of overall IoT outflow in 2017

While consumers purchase more devices, businesses spend more. In 2017, in terms of hardware spending, the use of connected things among businesses will drive $964 billion (see Table 2). Consumer applications will amount to $725 billion in 2017. By 2020, hardware spending from both segments will reach almost $3 trillion.

 

| Category | 2016 | 2017 | 2018 | 2020 | | ---------- | ---------- | ---------- | ---------- | ---------- | | Consumer | 532,515 | 725,696 | 985,348 | 1,494,466 | | Business: Cross-Industry | 212,069 | 280,059 | 372,989 | 567,659 | | Business: Vertical-Specific | 634,921 | 683,817 | 736,543 | 863,662 | | Grand Total | 1,379,505 | 1,689,572 | 2,094,881 | 2,925,787 |

Table 2: IoT endpoint spending by category (millions of U.S. dollars)  

“IoT services are central to the rise in IoT devices,” said Denise Rueb, research director at Gartner. Total IoT services spending (professional, consumer and connectivity services) is on pace to reach $273 billion in 2017.

“Services are dominated by the professional IoT-operational technology category in which providers assist businesses in designing, implementing and operating IoT systems,” added Rueb. “However, connectivity services and consumer services will grow at a faster pace. Consumer IoT services are newer and growing off a small base. Similarly, connectivity services are growing robustly as costs drop and new applications emerge.”