WHAT THE FUTURE HOLDS

In the fast-paced Technology industry, where product innovation cycles are shortening while traditional market segments such as Mobile Devices and traditional PCs are slowing down due to market saturation, enterprises are speeding up their search for the ‘next big thing’. At the same time, we are expecting more and more from the so-called Internet of Things (IoT).

The IoT is the networked connection of physical objects that is opening up innovative prospects in the Technology industry. Here’s just one glimpse of what an IoT world could look like. Imagine your self-driving car asking you which dinner your fridge should order for you from the local grocery store! Still wondering why companies are attracted to invest in IoT? In short, the reasons are huge expected profits, cross-industry growth prospects, and the priceless chance to be an enterprise doing business ahead of its time.

The IoT market, characterized by a strongly innovative and fast-growing footprint, will expand at a 17.9% 2015-18 CAGR reaching USD 471bn in 2018, up +183bn from 2015. In 2015, the biggest share of revenue originated from business spending (55%); however, consumer spending is the fastest growing source of revenue for the IoT market, both in terms of growth rate and incremental growth.

STRONGEST GROWTH IN AUTOMOTIVE 

Considering consumer spending on IoT in 2015, most of the revenue (USD 90bn) came from Information & Entertainment IoT devices (e.g., Smart TVs and Smart Watches), originating also the biggest 2015-18 expected increment (USD +37bn). The strongest growth rates are, however, forecast in the Automotive segment (+50.4% 2015-18 CAGR). Driven by the peaking trend of sensor-enabled, automated, interactive vehicles, this segment is quickly catching the attention of end-consumers as well as businesses. In 2015, the IoT products that ranked as the top three best-selling consumer products were Smart TVs (USD 41.3bn), Automotive subsystems (13.4bn), and Smart Watches (11.5bn).

BEST-SELLING IoT DEVICES

With regard to business spending on IoT in 2015, most of the revenue originated from the Manufacturing & Natural Resources IoT devices segment (USD 48.7bn), which has the largest 2015-18 expected increment (+15.8bn). The best-selling business IoT devices were IoT-enabled Manufacturing devices (USD 45.7bn). The huge role of Manufacturing devices in the IoT market can be explained by increasing implementation of the Industrial Internet of Things (IIoT). The IIoT incorporates machine learning and big data technology, harnessing sensor data, machine-to-machine communication, and automation technologies. In 2015, the second and third best-selling business IoT devices were Printers & Scanners (USD 34.0bn) and Security Cameras (13.2bn), reinforcing the key business applications for IoT-enabled devices.

WEARABLES & SMART CITIES

A special eye should be kept on two additional IoT device segments which are expected to disrupt our way of thinking about technology: Wearables and Smart Cities.

In 2018, Wearables will be worth USD 43.3bn in terms of market revenues, up +16.5bn from 2015. This key IoT segment will grow at 17.4% 2015-18 CAGR. In 2018, the revenues from Entertainment Wearables, driven by products such as Smart Watches and Bluetooth Headsets, will be three times the value of the Fitness Wearables sub-segment, due to a broad customer base and the wide range of possible applications. Moreover, in 2018, 59% of the Smart City technology shipments will comprise IoT devices for smart homes and commercial buildings. These could include, for example, the top-selling Security Cameras, Smart TVs, and also some other products such as LED Lighting, Smart Sockets, and Smart Smoke Detectors. In short, to make our cities “smart” we will start by inviting IoT into our homes and our workplaces.

READ MORE ON IoT

DHL Trend Research together in close collaboration with Cisco Consulting Services has launched a trend report on the Internet of Things (IoT). The full report is available for free download at www.dhl.com/trendresearch

DHL TECHNOLOGY MARKET INTELLIGENCE

The Internet of Things is among the key trends regularly monitored by DHL. With CAGR, the 2015-18 Compound Annual Growth Rate is always intended.

Data Source: Gartner 2015.

WHAT COMES NEXT

DHL will be publishing more Technology Subsector Market Monitors about PCs & Notebooks, Mobile Devices, Imaging and Printing, Semiconductors, Networks, Consumer Electronics, and Enterprise Computing.

To receive these publications along with similar updates in the future, join our LinkedIn group, follow the hashtag #DHLTechnology on Twitter, and write to us directly at  info.technology@dhl.com

Published: July 2016

Images: DHL