To date, the Asia-Pacific region is the global leader of IoT spending, with more than 40 percent 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 $250 billion in 2015.
Looking to the future, the regions that will experience the fastest growth in IoT spending over the five-year forecast period are Latin America (26.5 percent CAGR), followed by Western Europe, also Central and Eastern Europe.
"The Asia-Pacific region's robust IoT spending outlook is due to the developing country technology investment needs that are not fully met with traditional IT, which is allowing IoT investments to accelerate, and a burgeoning new consumer class that's driving expenditures in goods and services -- including those with IoT components," said Marcus Torchia, research manager at IDC.
Industry and Regional Variations for IoT Demand
From a vertical industry perspective, Manufacturing and Transportation led the way in worldwide IoT spending with 2015 totals of $165.6 billion and $78.7 billion, respectively.
Over the next five years, the industries forecast to have the fastest IoT spending growth will be Insurance (31.8 percent CAGR), Healthcare, and Consumer. The fast expanding Consumer IoT market will be the third largest IoT spending category by the end of the forecast period.
IDC believes that Manufacturing and Transportation are a good fit for progressive IoT deployments. Both industries have been connecting their supply chains, products, customers, and even workers for some time now, and they really embrace the value of business outcomes.
The Internet of Things is being applied in so many different ways across industries, the fastest growing use cases vary from region to region, as follows:
- In Central & Eastern Europe (CEE) and the Middle East & Africa (MEA), the fastest growing IoT category is smart buildings, where IoT technology that utilizes advanced automation and integration is being used to measure, monitor, control, and optimize building operations and maintenance.
- In Latin America, the fastest growing IoT category is maintenance & field service, where service data is automatically measured, recorded, and transferred remotely from the field for monitoring and use by technicians.
- In Asia-Pacific, insurance telematics is being used to monitor driver behavior through a vehicle-mounted device and the data is rapidly being employed as a means of determining insurance policies and rates.
- In North America, in-store contextual marketing is growing rapidly as retailers seek to capture continuous, real-time streams of data from mobile devices, online customer activity, in-store Wi-Fi routers or beacons, and video cameras in order to gain insight into customer behavior and desires.
In addition to the IoT use cases identified above, connected vehicles -- a broad category that includes emergency, infotainment, security, vehicle-to-vehicle (V2V), and vehicle-to-infrastructure V2I) applications -- was the fastest growing use cases across five of the six geographic regions that were studied.