Worldwide spending on the Internet of Things (IoT) is set to grow at a 17% compound annual growth rate (CAGR), from $698.6bn in 2015 to nearly $1.3tr in 2019, according to the latest insights from IDC.
On a geographic basis, IDC said that Asia/Pacific is the clear leader when it comes to IoT spending with more than 40% of the worldwide total coming from this region in 2015. North America and Western Europe are the second and third largest regions with combined spending of more than $250bn in 2015. The regions that will experience the fastest growth in IoT spending over the five-year forecast period are Latin America (26.5% CAGR), followed by Western Europe, and Central and Eastern Europe.
"The Asia/Pacific region's robust IoT spending outlook builds on three dynamics: developing countries' technology investment needs are not fully met with traditional IT, which is allowing IoT investments to accelerate; government investments in infrastructure development and local business modernisation, in China, India and the Philippines, for example, are incorporating more and more IoT elements; and a burgeoning new consumer class is accelerating expenditures in goods and services, including those with IoT components," said Marcus Torchia, research manager for the Internet of Things, IDC.
From a vertical industry perspective, IDC said that manufacturing and transportation led the way in worldwide IoT spending with 2015 totals of $165.6bn and $78.7bn, respectively. Over the next five years, the industries forecast to have the fastest IoT spending growth will be insurance (31.8% CAGR), healthcare, and consumer. Indeed, the fast expanding consumer IoT market will be the third largest IoT spending category by the end of the forecast period, IDC said.
"Manufacturing and transportation are both a good fit for IoT deployments," said Vernon Turner, senior vice president and IoT research fellow at IDC.
"Both industries have been connecting their supply chains, products, customers, and even workers for some time now, and really embrace the value of business outcomes."