As the Internet of Things (IoT) market matures during 2017, there's an increased focus on IoT service development, as more vendors explore the various new applications that are helping to stimulate growth in the sector. That said, many more devices will be 'online' this year. Many for the first time.
It's estimated that 8.4 billion connected 'things' will be in use worldwide in 2017 --that's up 31 percent from 2016, and will reach 20.4 billion by 2020, according to the latest market study by Gartner. As a result, total spending on endpoints and IoT services will reach almost $2 trillion in 2017.
Moreover, Greater China, North America and Western Europe are driving the use of connected things and it's estimated that the three regions together will represent 67 percent of the overall IoT installed base in 2017.
Internet of Things Market Development
The consumer segment is the largest user of connected things, with 5.2 billion units in 2017. That represents 63 percent of the overall number of applications in use. In contrast, businesses are on pace to employ 3.1 billion connected things in 2017.
According to the Gartner assessment, aside from automotive systems, the apps that will be most in use by consumers will be smart TVs and digital set-top boxes. Meanwhile, smart electric meters and commercial security cameras will be most in use by businesses.
Furthermore, applications tailored to specific industry verticals -- including manufacturing field devices, process sensors for electrical generating plants and real-time location devices for healthcare -- will drive the use of connected things among businesses through 2017, with 1.6 billion units deployed.
However, cross-industry devices, such as those targeted at smart buildings -- including LED lighting, HVAC and physical security systems -- will likely take the lead. By 2020, cross-industry devices are forecast to reach 4.4 billion units, while vertical-specific devices will reach 3.2 billion units.
Outlook for IoT Application Growth
While consumers purchase more devices, businesses spend more. In 2017, the use of connected things among businesses will drive $964 billion in revenue. Consumer applications will amount to $725 billion during 2017. And by 2020, hardware spending from both segments will reach almost $3 trillion.
"IoT services are central to the rise in IoT devices," said Denise Rueb, research director at Gartner. Total IoT services spending -- professional, consumer and connectivity services -- is on pace to reach $273 billion in 2017.
Services are dominated by the professional IoT-operational technology category, where service providers assist businesses in designing, implementing and operating IoT systems. However, Gartner believes that connectivity services and consumer services will grow at a faster pace.