According to IoT Analytics, the enterprise IoT market grew by 22.4% in 2021 to nearly $157.9 billion. A slightly lower figure compared to his predictions for 2020 which was more than 24%. This, due to many factors, as confirmed by Knud Lasse Lueth, CEO of IoT Analytics.
Following this dynamic, the IoT market growth should record an average annual growth rate of 22% per year to reach the value of 525 billion dollars within 5 years. In any case, this is what the analyst firm provides in its latest edition of the “Global IoT Enterprise Spending Dashboard” or the global dashboard of corporate IoT spending.
However, despite the chip shortage (expected to last into 2024 and possibly beyond), global economic conditions, supply chain disruptions and these downgraded growththe IoT market is doing quite well.
Moreover, many projects are currently in the deployment phase. These will increase the number ofconnected objects worldwide to more than 14.5 billion products by the end of 2022.
In its study, the leading provider of IoT market status and strategic business intelligence on IoT, Artificial Intelligence, Cloud, Edge and Industry 4.0 highlights thecurrent state of the IoT market.
IoT analytics also point to 16 big macro trends economic, political, societal, legal or technological which will affect the growth trajectory of the market. And this, whether negative or positive.
IoT Market Growth and Technology Drivers
From a technological point of view, the coming of age of the‘artificial intelligence (IA) will greatly contribute to the growth of the IoT market. Moreover, AI will play a significant role in achieving the objectives in terms of sustainable development.
According to figures from IoT Analytics, almost 16% of companies have fully adopted AI in their IoT projects. 70% believe they are ready to deploy it or at least set it up in a pilot project.
Also in this momentum, the creation of simplified AI solutions, the infusion of AI into historical applications and the notable progress in terms of AI chips will also contribute to the growth of the‘artificial intelligence of objects (AIoT). This AIoT market is estimated to reach $102.2 billion by 2026.
Furthermore, if the three main “hyperscalers” (Microsoft, AWS and Google) continue to invest in the IoT, as 5G becomes more and more available, IoT will experience a rise unprecedented. Networks LPWAN, Ethernet over a single pair of copper wires, Wi-Fi 6 as well as nanosatellites in low orbit will also boost the IoT market. They will also bring new concepts to customers.
With regard to technological barriers, cyber security incidents are expected to limit the growth of the IoT market in 2022 and 2023. More so, the shortage of chips is going to be a major drag for the semiconductor industry. With chip lead times between 40-50 weeks, it is highly likely that many IoT projects will not be feasible. Added to this is the rise in prices.
Lower GDP growth, rising input prices and the economic crisis linked to COVID-19 will have a negative impact on technological advances. Nevertheless, despite an ailing global economy, the IoT is increasingly being used to improve operations and reduce costs.
On the other hand, the instability of the supply chains of electronic chips but also of medical equipment, for example, represents a real obstacle for certain initiatives in the IoT market. Despite this, many companies will continue to invest in smart solutions such as IoT solutions for tracking or automating warehouses to make their supply chain more resilient.
Political, social and legal factors
With the instability of supply chains, more and more companies are adopting a multi-vendor strategy. This is to anticipate future disruptions. For their part, States are pushing to relocate production from countries where average wages are relatively high. This situation will obviously have an impact on IoT innovations.
At the same time, if the Russian-Ukrainian war continues, the shortage of semiconductors should get worse. Which again will have a significant impact on the IoT market. In fact, 90% of the necessary neon and palladium are produced in Russia and Ukraine.
Not to mention that war increases the instability of supply chains and contributes to rising prices. Furthermore, the sanctions imposed on Russia will inevitably affect the growth of the IoT market. Especially with the slowdown in the activities of Russian technology companies such as Kaspersky and Truphone.
Nevertheless, alongside its obstacles to IoT deployments, the new european data law scheduled for 2023 should breathe new life into the IoT market. Notably by optimizing competition in the technology space. This is thanks to a directive allowing customers to switch from one cloud provider to another.
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The IoT market: global growth of 22% in 2021
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