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Gartner says connected ‘things’ in use to rise

Consumer Applications to Represent 63 Percent of Total IoT Applications in 2017


Gartner Inc. forecasts that 8.4 billion connected things will be in use worldwide in 2017, up 31 percent from 2016, and will reach 20.4 billion by 2020. Total spending on endpoints and services will reach almost $2 trillion in 2017. 

Regionally, Greater China, North America and Western Europe are driving the use of connected things and the three regions together will represent 67 percent of the overall Internet of Things (IoT) installed base in 2017.

The consumer segment is the largest user of connected things with 5.2 billion units in 2017, which represents 63 percent of the overall number of applications in use (see Table 1). Businesses are on pace to employ 3.1 billion connected things in 2017. “Aside from automotive systems, the applications that will be most in use by consumers will be smart TVs and digital set-top boxes, while smart electric meters and commercial security cameras will be most in use by businesses,” said Peter Middleton, research director at Gartner.

Table 1: IoT units installed base by category (millions of units)

Category 2016 2017 2018 2020
Consumer 3,963.0 5,244.3 7,036.3 12,863.0
Business: Cross-Industry 1,102.1 1,501.0 2,132.6 4,381.4
Business: Vertical-Specific 1,316.6 1,635.4 2,027.7 3,171.0
Grand Total 6,381.8 8,380.6 11,196.6 20,415.4

Source: Gartner (January 2017)

In addition to smart meters, applications tailored to specific industry verticals (including manufacturing field devices, process sensors for electrical generating plants and real-time location devices for healthcare) will drive the use of connected things among businesses through 2017, with 1.6 billion units deployed. However, from 2018 onwards, cross-industry devices, such as those targeted at smart buildings (including LED lighting, HVAC and physical security systems) will take the lead as connectivity is driven into higher-volume, lower cost devices. In 2020, cross-industry devices will reach 4.4 billion units, while vertical-specific devices will amount to 3.2 billion units.

Business IoT spending to represent 57% of overall IoT spending in 2017

While consumers purchase more devices, businesses spend more. In 2017, in terms of hardware spending, the use of connected things among businesses will drive $964 billion (see Table 2). Consumer applications will amount to $725 billion in 2017. By 2020, hardware spending from both segments will reach almost $3 trillion.

Table 2: IoT endpoint spending by category ($$ Billions)

Category 2016 2017 2018 2020
Consumer 532,515 725,696 985,348 1,494,466
Business: Cross-Industry 212,069 280,059 372,989 567,659
Business: Vertical-Specific 634,921 683,817 736,543 863,662
Grand Total 1,379,505 1,689,572 2,094,881 2,925,787

Source: Gartner (January 2017)

IoT services are central to the rise in IoT devices,” said Denise Rueb, research director at Gartner. Total IoT services spending (professional, consumer and connectivity services) is on pace to reach $273 billion in 2017.

“Services are dominated by the professional IoT-operational technology category in which providers assist businesses in designing, implementing and operating IoT systems,” added Ms. Rueb. “However, connectivity services and consumer services will grow at a faster pace. Consumer IoT services are newer and growing off a small base. Similarly, connectivity services are growing robustly as costs drop, and new applications emerge.”

Clients can read further information in the reports “Forecast: Internet of Things — Endpoints and Associated Services, Worldwide, 2016” and “Forecast Alert: Internet of Things — Endpoints and Associated Services, Worldwide, 2016.”

Visit Gartner’s IoT Hub for complimentary research, webinars and Smarter With Gartner articles all focused on the business benefits of the IoT.

Additional information will be presented at the Gartner Catalyst Conference 2017 taking place August 21-24 in San Diego, CA and September 18-19 in London. Follow news and updates from the event on Twitter using #GartnerCAT.