Worldwide spending on the Internet of Things (IoT) is forecast to reach USD 772.5 billion in 2018, an increase of 14.6% over the USD 674 billion that will be spent in 2017, according to a new update to the International Data Corporation (IDC) Worldwide Semiannual Internet of Things Spending Guide.
The guide forecasts worldwide IoT spending to sustain a compound annual growth rate (CAGR) of 14.4% through the 2017-2021 forecast period surpassing the USD 1 trillion mark in 2020 and reaching USD 1.1 trillion in 2021.
IoT hardware will be the largest technology category in 2018 with USD 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.
The industries that are expected to spend the most on IoT solutions in 2018 are manufacturing (USD 189 billion), transportation (USD 85 billion), and utilities (USD 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.
International Data 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. To learn more about IDC, visit www.idc.com.