22 Jul 2024


The Internet of Things ‘will be worth $400bn in ten years’

The Internet of Things (IoT) market will be worth more than $400bn within ten years, according to a new report from a French technology analyst, Yole Développement. It predicts that revenues from IoT devices alone will soar from $9.5bn this year to $46bn by 2024, when the income from associated cloud computing services will be worth $59bn and the processing of IoT data will be worth $296bn.

By 2024, Yole adds, the IoT market will represent almost 15% of all data processing. “IoT devices offer huge potential for electronic component manufacturers, but this is clearly not where the value will stop,” explains Yole senior technology and market analyst, Dr Eric Mounier. “Most of the added value in IoT solutions will come from the processing of the generated data.”

Because the main purpose of the IoT is to make sensing ubiquitous at an extremely low cost, there will be strong price pressure manufacturers of IoT devices. Yole expects revenues from devices to peak at $70bn by 2018, before decreasing as competition and economies of scale take effect. “This period represents a key window in which manufacturers must seize the opportunity to grab a piece of the IoT business pie,” the analyst suggests.

The evolution of IoT hardware technologies will focus on integration at the device and module levels, Yole adds. It foresees seven generations of sensing products, starting with today’s relatively large smart industrial sensors, and ending with “printed” electronics.  

The IoT will see considerable convergence in the coming five years, bringing together three key sectors:

•  the electronics industry, which will manufacture the sensing devices;

•  the communication and cloud data storage industry, which will handle data transmission, storage and processing; and

•  service companies, which will add value to the data by processing it or selling it on to third parties.

Yole reports that some companies have already started positioning themselves in these fields. For example: Oracle and Amazon are developing cloud computing capabilities; Bosch Connected Devices and Solutions and STMicroelectronics have teams dedicated to the IoT; and Google and Facebook are developing their data-processing models, while looking to acquire companies linked to data-gathering.

Large investments in terms of data storage will be needed, but there will be strong pressures on prices, says Yole, which adds that a low value will be attributed to the physical data. It reports that a price war has already erupted between cloud computing companies, which are cutting data storage prices as they expand their capabilities.

On the data processing side, increasing amounts of information will be available at a low cost. “Service companies will be the big winners in this field,” predicts another Yole analyst, Dr Guillaume Girardin, who expects that hardware and cloud companies will integrate themselves vertically.