The Internet of Things market is headed for strong growth, according to the International Data Corproration.
IDC says the number of connected units is set to increase from 3.1 billion to 8.6 billion by 2020. The total Asia Pacific region, excluding Japan (APej), market size will increase from 250 billion to 583 billion in the same period.
"The Internet of Things industry has matured considerably over the past year, with a number of large government initiatives across APeJ, and China in particular, driving demand," says Charles Reed Anderson, associated VP, head of mobility and Internet of Things at IDC Asia/Pacific.
“This increase in market demand has led to an increased focus on IoT from leading ICT vendors, as well as start-ups – with each keen to grab their share of the growing IoT market.
“While high level IoT market forecast information by region or country can be useful to certain audiences, it adds little value to those functional areas with more specific requirements,” says Anderson. “Sales and marketing, for instance, require IoT forecasts aligned to industry verticals so they can effectively set targets and tailor their go-to-market messaging; while product management requires IoT forecasts aligned to use cases (e.g. digital signage) so they can understand the addressable market for their solution portfolio across multiple industries.
IDC's IoT Market Forecast shows that China not only will continue to dominate the Asia/Pacific region, accounting for 59% of the APeJ market opportunity by 2020, but also be one of the leading markets globally with nearly 1 out of every 5 units connected by 2020 to be in China. However, market size is not the same as market maturity.
“While the market opportunity in China dwarfs the other leading countries like South Korea, India, Indonesia and Australia in terms of dollar value, that doesn't mean it is the most mature,” adds Anderson.
“To assess the maturity of a market, we compare the total number of things connected to the overall population to get a connections per capita figure. Based on this calculation, we discovered the top three most mature markets were South Korea, Australia and New Zealand, with China coming in sixth out of the 13 APeJ Countries.”
The IoT market forecast also looks at which industries are leading the way with IoT. Not surprisingly, the government industry leads the way, as national, regional and city governments aggressively try to leverage IoT solutions to drive new revenue streams, reduce costs and enhance citizen services as part of their Smart Government initiatives. Other leading industries include utilities, discrete manufacturing, healthcare and retail.
“For the vendors looking at IoT, it is vital they understand which industries are driving the markets they are targeting as each country has its own unique drivers,” Anderson explains.
“Singapore's leading industries, for instance, are telecoms, consumer and transport, none of which are ranked in the APeJ top five industries for market opportunity.
“Having this level of market knowledge will allow the vendor community to tailor their go-to-market messaging for each market and increase their chances of success,” he concludes.