8.4 Billion Connected Things Will Be in Use in 2017

8.4 Billion Connected Things Will Be in Use in 2017

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Gartner 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. 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.

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

In addition to smart meters, applications tailored to specific industry verticals 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  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.

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. Consumer applications will amount to $725 billion in 2017. By 2020, hardware spending from both segments will reach almost $3 trillion.

IoT Endpoint Spending by Category (Billions of Dollars)

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

"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 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."

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