Scaling the Internet of Things – 25 billion connections by 2025
According to GSMA Intelligence, the number of IoT connections (cellular and non-cellular) will increase more than threefold worldwide between 2017 and 2025, reaching 25 billion. While IoT is rapidly becoming a mainstream technology in consumer markets such as consumer electronics and smart homes, the industrial IoT segment is still in its infancy – but is set to be the largest source of connections growth going forward. Globally, the industrial connections base will overtake consumer IoT connections in 2023. A number of trends will drive development and growth in the IoT ecosystem over the period to 2025:
Funding and innovation – IoT start-ups are increasingly backed by private investor financing and a supportive ecosystem for innovation. Amazon, Cisco, GE, Google, Intel, Microsoft, Qualcomm and Samsung have invested significant amounts into the developing IoT arena over the last five years. Some of them are also adopting a horizontal business model by establishing their presence across multiple sectors and segments of the IoT value chain. A growing number of companies (such as Sierra Wireless, Gemalto, MobileTEK, Quectel and Telit) commercialise mobile IoT2 modules for both LTE-M and NB-IoT, typically supported by software development kits. Some mobile operators and equipment vendors are also establishing open labs to help solution developers test new concepts and certify products
Development in connectivity to best suit a variety of use cases – While the majority of IoT devices – typically in indoor environments – will likely be connected by radio technologies designed for short-range connectivity (such as Wi-Fi, Z-Wave and Zigbee), other IoT devices that require wide-area network coverage, coverage on the move, lower latency and ultra-reliability will likely be primarily connected by cellular networks using licensed spectrum. At the end of 2017, there were 30 commercial deployments of LTE-M and NB-IoT across 20 countries, including the US, China and across Europe. Looking out to 2025, licensed cellular IoT connections3 will reach 3.1 billion worldwide, or 12% of total IoT connections.
Proliferation of use cases across verticals – The number of industrial IoT connections will grow from 3 billion to almost 14 billion between 2017 and 2025, driven by rising adoption of solutions for smart buildings (for heating, air conditioning, building security, lighting, office equipment and automation), utilities (energy, water & gas smart metering and smart grid solutions) and manufacturing (inventory tracking, monitoring and diagnostics, warehouse management).
Momentum in smart cities – Smart city initiatives are on the rise across major metropolitan areas in the US and in other regions such as China (part of the 13th Five Year Plan), Singapore (Smart Nation), India (100 Smart Cities Mission) and Qatar (2022 FIFA World Cup). Dubai is also taking a lead role in preparation for Dubai Expo 2020; the CEO of the Smart Dubai project announced the ambition for 25% of all journeys in Dubai to be autonomous (i.e. driverless) by 2030.
The rise of smart homes – Smart homes are increasingly becoming a platform for a suite of digital services, applications and devices, and will be the largest source of growth within the consumer segment. Connections will grow threefold to more than 5 billion by 2025, driven by home security, thermostats for energy monitoring, and enabling infrastructure such as routers and extenders.
Asia Pacific will continue to be the largest regional IoT market by number of connections. In terms of growth, nearly 90% of all IoT net additions between 2017 and 2025 will be in Asia Pacific, North America and Europe. Developing markets will lag behind in growth and scale due to lower affordability among consumers and enterprises, and a less developed ecosystem and environment for innovation and technology deployment.