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The Asia-Pacific (APAC) region is expected to be the forerunner in using the internet of things (IoT) by 2023, accounting for 48% of global spending on the technology that helps organisations operate more efficiently and improve decision-making.
According to research by technology research and advisory firm Ecosystm, global IoT spending is expected to grow at a compound annual growth rate (CAGR) of 7% from 2018 to 2023, reaching a value of US$394.4bn.
Much of this growth will be led by China, which will take up the mantle of being the global centre for IoT solutions, accounting for 23% of the market ($92bn) alone.
This makes China the largest country market, and placing it ahead of the US ($81.9bn) and on a par with Europe, Middle East and Africa ($94.7bn) as it continues to deploy the IoT in smart cities, as well as the energy and manufacturing sectors.
Manufacturing firms, in particular, are the biggest adopters of IoT, with spending slated to grow at a CAGR of 7.6% to account for close to $69bn by 2023.
Meanwhile, previous boom industries, including healthcare, life sciences and retail, will continue their IoT charge, with spending increasing at a CAGR of 8.35% and 8% respectively. This, however, represents a slowdown from the previous forecast – and 2023 will see spending in these sectors plateau.
Instead, resources and primary industries will see the most aggressive growth in IoT spending over the forecast period at a CAGR of 9.9%.
As for IoT technology components, Ecosystm expects spending on hardware and connectivity to peak by the end of 2023 due to growing commoditisation. In the case of IoT servers, the analyst firm expects spending to fall from $52.8bn in 2022 to $48.8bn in 2023.
Additionally, while 5G will remain a key component for IoT offerings, the monetisation of 5G systems for IoT is unlikely to live up to expectations.
Instead, software management and service management will drive the overall market as more IoT-based data services are created, innovated and delivered, according to Ecosystm. Between them, they are expected to account for over 57% of the total IoT technology market forecast.
“While IoT hype may be peaking, and attention is turning to analytics, we mustn’t overlook the basics – what smart connected devices are and can do,” said Vernon Turner, executive analyst at Ecosystm.
“We should be asking, what does it mean to manage a growing and distributed network of uncharacteristic looking IT assets? How do we connect them? Who do we partner with to fill in the gaps? It’s only when we master this that we’ll really begin to see the value IoT has to deliver and transform business.”
Security concerns continue to stand in the way of maximising IoT’s potential, with almost half of the respondents in a global survey commissioned by Inmarsat calling for a different approach to data security.
The lack of skills is another bugbear, with 45% of respondents citing the lack of skills as a challenge for their organisations in deploying IoT.
Read more about IoT in APAC
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