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IoT spending in APAC to hit $59 billion by 2020

Posted: 02 Dec 2014 ?? ?Print Version ?Bookmark and Share

Keywords:Frost & Sullivan? sensor? cloud computing? IoT? data analytics?

The pace of transformation across various technological industries is constantly on the rise. In fact, digital disruption among relevant markets constitute this volatile landscape. According to Frost & Sullivan, some of the factors driving this unrest include low cost sensors, cloud computing, advanced data analytics and mobility.

Key examples of industries expected to undergo IT driven transformations include energy (smart grids), media (content streaming) and manufacturing (3D printing), all of which will be influenced by the Internet of Things (IoT).

Andrew Milroy, SVP, ICT practice, Asia Pacific at Frost & Sullivan has identified five key areas that will be driven by the influence of IoT.

"By 2017, the IoT market will be one of the fastest growing segments in the Asia Pacific technology industry. The total Asia Pacific spending on IoT spending is forecasted to be $59 billion by 2020. This offers real opportunities, especially in areas of manufacturing and consumer technology, which are expected to be two of the fastest growing segments over the next two years," said Milroy.

The level of digitisation in the manufacturing industry has not kept up with the pace of other industries such as telecoms but the onset of Industry 4.0 is set to change that. Various initiatives by organisations such as the Smart Manufacturing Leadership Coalition (SMLC), aim to bring together stakeholders to develop the measures needed to facilitate the broad adoption of manufacturing intelligence.

Besides manufacturing, the wearables market is also experiencing strong growth. Frost & Sullivan estimated the global wearable technology market at $8.58 billion in 2014 and will reach $38 billion in 2017 with a CAGR of 34 per cent from 2014-2018. According to Milroy, the Asia Pacific region accounts for just over four per cent of the global market and will lag behind other mature markets in North America and Europe in the uptake of wearables, which are dominated by standalone devices such as activity trackers and wearable recordings.

"It is expected that wearables such as smart watches and smart glasses with a wider range of functions will eventually overtake all other wearable devices to adopt a premium position in the market. Notably, the smart glasses are anticipated to do extremely well, with many promising application opportunities across industries such as healthcare and manufacturing," noted Milroy.

2015 is seen to be the year of software-defined everything as the software defined revolution spreads beyond the boundaries of the data centres. Programmable networks will enable the creation of new business applications and services which will drive efficiencies and new service models.

The adoption of the IoT is however not without its challenges, as there are several hurdles that could prevent it from achieving rapid growth. Security and information privacy are some of the largest hurdles to the adoption of IoT. With smart and connected devices embedded in business processes and tied to critical functions, the ability to negatively affect enterprises and individuals is increased significantly.

Traditional mobile communications revenue comprising of voice and non-voice (mobile data and SMS services) was estimated to be $567 billion in 2014. The market will continue to grow, albeit at a modest rate of 2.7 per cent over a five-year CAGR to reach $627 billion by 2018. To buffer the decline in voice and SMS, data consumption is expected to drive revenue growth across most of Asia, with key factors including LTE services, smartphone proliferation and an increase in the consumption of multimedia content such as real time gaming and video entertainment; all of which are bandwidth intensive especially for larger screen devices.

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