U.S. organizations will invest more than $232 billion in Internet of Things (IoT) hardware, software, services, and connectivity in 2016.
IDC expects U.S. IoT revenues will achieve compound annual growth rate (CAGR) of 16.1 percent over the 2015-2019 forecast period, reaching more than $357 billion in 2019.
Manufacturing will make IoT investment of $35.5 billion, while transportation will be spending $24.9 billion in IoT, in 2016.
Cross-Industry investment, which represents use cases common to all industries, will approach $31 billion this year.
The IoT use cases:
Manufacturing Operations, which supports digitally-executed manufacturing, or how manufacturers use intelligent and interconnected I/O (input output) tools – e.g. sensors, actuators, drives, vision/video equipment etc. – to enable the different components in the manufacturing field – e.g. machine tools, robots, conveyor belts etc.– to autonomously exchange information, trigger actions and control each other independently.
Freight Monitoring, which uses radio frequency identification (RFID), global positioning system (GPS), GPRS, and GIS technologies to create an intelligent, Internet-connected transportation system. This system carries out the intelligent recognition, location, tracking and monitoring of freight and cargo through exchanging information and real-time communications via wireless, satellite or other channels.
Smart Buildings, which utilize advanced automation and integration to measure, monitor, control, and optimize building operations and maintenance. The key concept is optimization – meaning the deployment of a set of integrated control systems capable of adapting in real time to both internal policies and external signals. These systems manage how building equipment operates to use energy in the most efficient and cost-effective way.
The next three largest IoT use cases in terms of U.S. revenue will be Remote Health Management, Smart Grid (Electricity), and Smart Home. The IoT use cases that will experience the greatest revenue growth in the U.S. over the 2015-2019 forecast period are In-Store Contextualized Marketing, Connected Vehicles, and Insurance Telematics.
While Manufacturing and Transportation will lead the U.S. in terms of overall IoT investments, the Insurance, Retail, and Healthcare industries will see IoT spending levels increasing by 135 percent, 101 percent, and 96 percent, respectively. In addition to driving some of the largest IoT investments, the Cross Industry segment will also see revenue growth of more than 100 percent through 2019.
Meanwhile, Research and Markets said the IoT managed services market will grow at a CAGR of 15.3 percent during the forecast period 2016-2022.
Though security is a big concern, connected devices from autonomous vehicles to smart home products often lack it. ABI Research projects that this is largely due to economies of scale but anticipates that the world will undergo a swift change to better protect these devices as global embedded security shipments increase exponentially to near 4 billion by 2021.
“Most connected devices are not being built with security in mind, as many IoT device makers lack the funding, expertise, and awareness to properly implement it,” said Michela Menting, research director at ABI Research.