IoT Spending Forecast: $1 Trillion Worldwide by 2026
Spending on the IoT and its ecosystem will trend upward in 2023 and during the period from this year to 2027, according to IDC.
Worldwide spending on the sector is forecast to reach $805.7 billion this year, an increase of 10.6% over 2022. Investment in the ecosystem will surpass $1 trillion in 2026. The category will have a compound annual growth rate (CAGR) of 10.4% in the period from this year until 2027.
IoT services will count for almost 40% of all IoT spending worldwide. Software will be the fastest growing category with a CAGR of 11.0%.
More than one-third of the spending throughout the forecast period will be in the discrete and process manufacturing sector. The next largest category, at about 25%, will be professional services, utilities and retail. The fastest growing categories will be state/local government at 12.0% and telecommunications at 11.7%.
Western Europe and the United States will account for more than half of all IoT spending during the forecast period. Their spending is roughly equal now, but going forward Western Europe will have a CAGR of 11% and the United States a CAGR of 8.0%.
The two IoT use cases that are receiving the most investment this year are manufacturing operations ($73 billion) and production asset management ($68.2 billion). Both are related to manufacturing industries.
Those are followed by inventory intelligence ($37.6 billion), smart grid ($36.9 billion) and supply chain resilience ($31.6 billion). These, IDC says, “will benefit from strong investments from the Retail and Utilities industries.”
The fastest growing use cases will be electric vehicle charging (30.9% CAGR), next-generation loss prevention (14.5% CAGR), agriculture field monitoring (13.9% CAGR) and connected vending and lockers (13.8% CAGR).
The spending on video analytics across all industries to be more than $23.5 billion in 2023, according to the report.
“The last few years have shown that connecting with a digital infrastructure is no longer a luxury, but a necessity,” Carlos M. González, IDC’s IoT research manager said in a press release. “For organizations to excel in data-driven operations, investing in IoT projects is essential. Connecting devices to data networks to gather insight, expand operations, and increase performance are the hallmarks of executing an IoT ecosystem.”