The Internet of Things (IoT) represents the next major evolution in our digitally connected world. As physical objects get embedded with sensors and connectivity, they can be monitored and controlled remotely over the internet. This opens up limitless possibilities to enhance operations, create new business models, and transform human experiences.
After over a decade of gradual growth, IoT adoption is accelerating as technologies mature and costs decline. The COVID-19 pandemic further spotlighted IoT‘s potential to enable remote interactions.
In this comprehensive blog post, we‘ll dig deep into 30 enlightening statistics to glimpse the current state and future direction of IoT. These stats highlight market size and growth, connected devices, use cases, industry applications, results, investments, and challenges related to IoT.
Let‘s dive in!
IoT Market Size and Explosive Growth
The IoT market has ballooned over the past decade as prices of sensors, connectivity, and cloud services dropped exponentially:
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There were 15.4 billion connected IoT devices in 2015. This figure is predicted to reach 75 billion by 2025, a 5x increase in 10 years (IDC, 2019).
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Global IoT revenue has multiplied 7x from $30 billion in 2012 to over $212 billion in 2019 (IDC, 2019).
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In the next 5 years, the IoT market is forecast to more than double from around $1 trillion today to over $2.5 trillion by 2027, representing a 25% compound annual growth rate (CAGR) (Business Insider, 2021).
Driving these staggering numbers is the plunging cost of IoT hardware and connectivity:
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The average selling price per IoT module dropped from $2.50 in 2012 to $1.20 in 2020, a 50% decrease (Statista, 2021). This makes adding connectivity affordable.
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NB-IoT and LTE-M low-power wide area networks enabling long range connectivity now cost as little as $5 per year (Forbes, 2020).
With IoT hardware and connectivity commoditizing, the market potential is immense. We‘re still only scratching the surface of the transformational business and societal changes IoT can drive.
IoT Connected Devices Flooding Our World
As IoT adoption accelerates, the sheer volume of connected devices is mind-boggling:
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There are already over 10 billion actively connected IoT devices worldwide as of 2019 (IoT Analytics, 2019).
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By 2025, there will be 55.7ZB of data created by over 75 billion IoT devices, up 400% from 14.6ZB in 2019 (IDC, 2019).
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The average household with 2 parents, 2 children, and 4 IoT devices already produces over 150 million data points per year (Fourtane, 2018).
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Gartner predicts there will be 25 billion connected IoT endpoints by 2021 (Gartner, 2018). Cisco forecasts 15 billion by 2023.
Managing these massive new data flows presents an enormous opportunity alongside challenges. Companies must build capabilities to store, process, analyze, and extract value from IoT data at scale.
Edge computing is emerging as a key way to analyze data near the source before transmitting critical information to the cloud. This reduces bandwidth needs while minimizing latency for time-sensitive apps like autonomous vehicles.
Top IoT Use Cases and Applications
IoT use cases span consumer, government, and enterprise environments:
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Smart homes: Home automation for security, climate, lighting, and entertainment hit $76 billion globally in 2019 (Statista, 2021). One survey found smart home devices in 16% of U.S. households (NPR, 2019).
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Industrial IoT: Manufacturers are implementing industrial IoT solutions for predictive maintenance. IoT analytics can reduce equipment downtime by up to 50% and cut maintenance costs by 25% (McKinsey, 2017). The smart manufacturing market is estimated at $240 billion currently (MarketsandMarkets, 2022).
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Connected vehicles: The automotive sector is the fastest growing IoT category, with connected car apps projected to represent 30% of all machine-to-machine (M2M) connections by 2023 (Cisco, 2019). Major applications include fleet management, real-time traffic alerts, self-diagnostics, and semi-autonomous driving.
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Smart cities: Urban IoT deployments like smart grids, parking, traffic management, and pollution monitoring are forecast to be a $2 trillion market by 2025 (Frost & Sullivan, 2018). % of U.S. cities actively pursuing smart city projects increased from 12% in 2015 to 69% in 2019 (IDC, 2020).
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Healthcare: IoT in healthcare enables telemedicine, remote patient monitoring, medical asset tracking, and digital medicine. The global IoT healthcare market is forecast to grow at a 25% CAGR from $144 billion in 2021 to $534 billion by 2028 (Fortune Business Insights, 2022).
Alongside growth in these areas, expect increased focus on using IoT data to enable AI-driven business insights. IoT generates the contextual data that feeds the algorithms powering the AI revolution.
IoT Industry and Application Breakdown
Looking at adoption across industries reveals where IoT is making the biggest impact already:
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IoT spending growth is projected to be strongest in healthcare (15%), insurance (12%), and education (12%) through 2023 (IDC, 2021).
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In manufacturing, industrial IoT adoption surged from 53% in 2018 to 72% in 2019 (Relayr, 2020). 83% of adopters reported productivity gains from industrial IoT analytics.
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70% of global smart city IoT spending by 2030 will come from the U.S., Western Europe, and China (Frost & Sullivan, 2019). Leading smart city applications include intelligent transportation, public safety, environmental monitoring, and smart grids.
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The agricultural IoT market around precision farming and smart agriculture is forecast to reach $7 billion by 2025 (Statista, 2021).
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12% of all semiconductor demand will come from IoT components by 2025 as specialized silicon chips like AI accelerators are adopted (IOT Analytics, 2021).
These data points demonstrate IoT‘s cross-industry reach. But we‘re still in the early phases of digital transformation, with tremendous growth ahead.
The COVID-19 Impact on IoT Adoption
The COVID-19 pandemic accelerated IoT adoption, highlighting the technology‘s benefits:
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47% of organizations increased IoT spending during COVID-19, while only 35% decreased investments (Gartner, 2020).
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IoT-enabled remote asset monitoring rose 56% due to pandemic travel restrictions (Cisco, 2021).
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Telehealth visits utilizing connected medical devices soared 46x from 2020 to 2021 (McKinsey, 2021).
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Schools leaned on IoT connectivity to enable remote learning during lockdowns and hybrid reopenings.
For businesses, IoT solutions helped maintain operations and continuity during disruptions. For consumers, IoT devices facilitated activities like remote work and telemedicine. This underscores IoT‘s potential as a business transformation enabler.
IoT Investment Growth
Reflecting increasing adoption, investments in IoT are ramping up quickly:
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Annual growth in IoT investments is forecast at 14% through 2022, reaching over $1 trillion (McKinsey, 2019).
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IoT hardware makes up 35% of spending, with software and services each around 20% (McKinsey, 2019).
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Manufacturers will build 40% more smart factories in 5 years, expanding IoT investments 2X over the past 3 years (Forbes, 2019).
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55% of healthcare systems are prioritizing IoT investment over the next two years (Spyglass Consulting Group, 2021).
Firms recognize the disruptive potential of IoT and are putting real dollars behind scaling adoption. Developing in-house skills and partnering with IoT platform providers will enable companies to capitalize on connected devices.
The Business Benefits of IoT Adoption
With great investment comes great responsibility to deliver actual business value. Here are some stats on the outcomes organizations are achieving with IoT:
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63% of adopters believe they will realize expected IoT project returns within 3 years (Gartner, 2019).
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In a survey, 35% identified new capabilities and 34% cited improved efficiency as the biggest IoT benefits (PwC, 2018).
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IoT analytics reduced downtime by up to 50% for industrial manufacturers, while also lowering maintenance costs by 25% (McKinsey, 2017).
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Warehouses saw a 15-30% increase in operational efficiency from implementing IoT tracking solutions (BusinessWire, 2019).
IoT‘s potential to enable data-driven business transformation makes it a strategic priority. Demonstrating quick ROIs will be critical as companies scale implementations.
Emerging IoT Technology Trends
While promising, scaling enterprise IoT comes with technical hurdles to overcome. Here are key technology trends that will shape the next phase of IoT growth:
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5G and Edge Computing: 5G networks will provide the throughput, capacity and low latency needed for expansive IoT adoption. Meanwhile, edge computing will enable real-time processing of IoT data at the source to minimize delays.
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AI and Machine Learning: Instead of just collecting data, future IoT systems will analyze it to gain insights. AI and machine learning will shift IoT solutions from reactive to predictive.
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Legacy Infrastructure Integration: Companies will need to integrate IoT solutions with legacy enterprise systems like ERP and CRM to maximize value instead of creating data silos. Middleware and APIs will be key.
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Data Management: Organizations will adopt more robust data architectures to ingest, process, store and analyze vast amounts of real-time streaming IoT data from across locations.
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Security: As devices proliferate, so do vulnerabilities. Companies will implement layered IoT security encompassing hardware, network, application and data layers.
Overcoming these technology hurdles will allow organizations to progress from limited pilots to full-scale IoT production deployments.
IoT Security and Privacy Challenges
Along with technical obstacles, security and privacy remain paradoxical IoT challenges for organizations:
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Security: 22% of firms are willing to pay more for improved security, the top IoT concern (Bain & Company, 2018). IoT introduces new attack surfaces and data vulnerability points.
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Privacy: 92% want control over their automatically collected personal data from IoT devices (EIU, 2018). Yet current devices lack transparency and choices.
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Regulatory Compliance: Healthcare systems cite navigating evolving safety, privacy, and ethical regulations as an obstacle to IoT adoption (Deloitte, 2016). Compliance costs may constrain innovations.
As IoT scales, firms must balance open ecosystems needed for growth against locking down vulnerabilities from breaches or misuse. Likewise, consumers desire both personalized experiences and data privacy. Navigating these paradoxes will determine the success and social impacts of IoT.
The Future of IoT
Based on these statistics, the future points toward exponential growth in connected sensors, devices, and equipment as expanding networks and plummeting costs enable ubiquitous connectivity. While adoption is still early and fragmented, IoT is poised to soon cross the chasm into the mainstream.
The companies that will extract the most value from IoT are those that go all-in. Half-measures lead to partial results. By embracing IoT now, organizations can build the data, analytics and systems capabilities that will pay dividends for years to come.
With trillions of dollars in projected growth, the IoT revolution could transform nearly every sector of our economy, from manufacturing to healthcare to agriculture and beyond. The ultimate opportunity is to utilize the avalanche of IoT data to gain predictive insights that delight customers and accelerate business performance.