IoT spending in Asia Pacific to grow by 9.6% for the year 2021: IDC
Spending on the internet of things in the Asia Pacific region was forecasted to expand by 9.6% in 2021, accelerating from 1.5% the previous year, according to a recent report by international consultancy firm IDC.
IDC’s Worldwide Semiannual Internet of Things Spending Guide forecasts that the regional IoT market is expected to reach $437 billion by 2025 with a CAGR of 12.1% during the 2021-2022 period. IDC noted that this expected growth is mainly driven by increased adoption of location tracking, facial recognition, remote working, cold chain logistics & tracking of vaccines, video-centric application, and deployment of 5G in the region.
“IoT in the Asia Pacific excluding Japan (APEJ) markets continues to grow steadily across multiple industries including transportation, retail, manufacturing, resources, and utilities driven by the increased capacity and reliability of fiber and cellular network infrastructure,” said Bill Rojas, adjunct research director at IDC Asia/Pacific. “In many Phase I projects enterprises focused on a single use case and on acquiring the data streams from single sources but as the organizations gain a deeper data-driven understanding of their operations, they can start to use other data sources (such as geolocation, machine maintenance data, weather, transactions activity, vehicular telemetric traffic data, and so on) to improve their analytics and expand beyond the original use case,” Rojas added.
According to IDC, discrete and process manufacturing will be the largest source of IoT spending in the APEJ region, with one-third of total IoT spending this year, followed by consumer and government, respectively. Meanwhile, industries that will experience the fastest growth in 2021 are construction and retail, with a growth of 13.1 % and 13%, respectively.
Use cases that are driving IoT spending growth in 2021 are manufacturing operations, production asset management, omni-channel operations, smart grid (electricity), smart homes, and freight monitoring, according to the report.
“Enterprises no longer think IoT value is only limited to achieve operational efficacy and improved productivity. They see IoT as an enabler in the evolution of enterprises’ requirements and challenges in an ever-changing business environment. Many organizations are willing to invest in digital technologies such as IoT, AI to fully leverage the new expansive role of data in emerging digital business models,” adds Sharad Kotagi, market analyst at IDC Asia/Pacific.
From a geographical perspective, China, South Korea, and India will account for more than three-fourths of overall IoT spending in APEJ throughout the 2020-2025 period, followed by Australia and Indonesia. Increased focus on building smart infrastructures such as wider connectivity coverage, 5G deployment, public wi-fi zones, smart grid, and initiatives like smart cities, Industry 4.0, and special economic zones are the main driving factors for the IoT growth in the countries across Asia Pacific region. Countries that will see the fastest IoT spending are Hong Kong, Singapore, and Malaysia.