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Utility sector will drive adoption of IoT this year and next year

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Utility sector will remain the highest user of the Internet of Things (IoT) endpoints globally this year and next year, due to the growth in smart electricity meters, according to a new report by Gartner.

The overall IoT market volume will grow by 21.5% to 4.81b units this year compared to 3.96b last year. Next year, the market will grow by 20.79% to reach 5.81b units.

Out of the 4.81b units this year, utilities will reach 1.17 billion endpoints, and increasing 17% in 2020 to reach 1.37 billion.

Peter Middleton, senior research director at Gartner, said that electricity smart metering, both residential and commercial, will boost the adoption among utilities.

“Physical security, where building intruder detection and indoor surveillance use cases will drive volume, will be the second-largest user of IoT endpoints in 2020,” he said.

(Image credit: Gartner)

Greater China and Western Europe to fuel demand

Building automation, driven by connected lighting devices, will be the segment with the largest growth rate in 2020 (42%), followed by automotive and healthcare, which are forecast to grow 31% and 29% in 2020, respectively.

In healthcare, chronic condition monitoring will drive the most IoT endpoints, while in automotive, cars with embedded IoT connectivity will be supplemented by a range of add-on devices to accomplish specific tasks, such as fleet management.

Residential electricity smart metering will be the top use cases in Greater China and Western Europe and will represent 26% and 12% of total IoT endpoints respectively.

North America, in comparison, will see its highest IoT endpoint adoption in building intruder detection, such as door and window sensors, which will represent 8% of total IoT endpoints.

In 2020, revenue from endpoint electronics will total $389 billion globally and will be concentrated over three regions: North America, Greater China and Western Europe.

These three regions will represent 75% of the overall endpoint electronics revenue. North America will record $120 billion, Great China will achieve $91 billion and Western Europe will come in third totalling $82 billion in 2020.

In 2020, the two use cases that will produce the most endpoint electronics revenue will be consumer connected cars and networkable printing and photocopying, totalling $72 billion and $38 billion, respectively.

How to succeed in the crowded arena

Connected cars will retain a significant portion of the total endpoint electronics spending resulting from increasing electronics complexity and manufacturers implementing connectivity in a greater percentage of their vehicle production moving forward.

While printers and photocopiers will contribute significant spending in 2020, the market will decline slowly and other use cases such as indoor surveillance will rise as governments focus on public safety.

 “Overall, end-users will need to prepare to address an environment where the business units will increasingly buy IoT-enabled assets without policies for support, data ownership or integration into existing business applications,” said Alfonso Velosa, research vice-president at Gartner.

 “Product managers will need to deliver but also to clearly and loudly communicate their IoT-based business value to specific verticals and their business processes if they are to succeed in this crowded arena,” he said.