IoT spending in Asia-Pacific to reach $436 billion in 2026: IDC
According to IDC, China will represent 60% of the regional IoT spending in 2022
IoT spending in the Asia-Pacific (APAC) region is forecasted to reach $436 billion in 2026, growing at a CAGR of 11.8% during the 2021-2026 period, according to a new report by research firm IDC.
According to IDC’s latest Worldwide Semiannual Internet of Things Spending Guide , the IoT market in APAC will continue to grow in 2022 by 9.1%, accelerating from 6.9% in 2021.
IDC noted that a number of factors including semiconductor shortages and supply chain disruption caused by geopolitical tensions have limited the growth in 2022 to single digits, and rising inflation may dampen growth. However, rising demand for remote operations, better network coverage, and the deployment of commercial 5G and testbeds are driving IoT adoption in the region, according to the research firm.
“The ongoing deployment and expansion of 5G will drive the growth of connectivity use cases that utilize massive narrowband IoT as well as wideband/broadband IoT such as 4K IP cameras. Low Earth Satellites including nanosatellites and next-generation Very High Throughput Satellites will enable a wide range of remote connectivity uses cases relating to Smart Cities, environmental and sustainability monitoring, transportation infrastructure, energy and resources, and utilities,” said Bill Rojas, Research Director for IDC Asia/Pacific.
IDC noted that discrete and process manufacturing will continue to be the top industries investing in IoT solutions this year and in forecasted years, followed by state/local government and professional services.
Meanwhile, IDC highlighted that IoT use cases that will see the highest spending in 2022 are Manufacturing Operations, Production Asset Management, Omni-Channel Operations, Public Safety and Emergency Response and Smart Grids. These use cases will represent more than one-third of the overall IoT spending in the region.
“Enterprises in Asia/Pacific excluding Japan are actively pursuing digital transformation of business processes to understand better current difficulties and productivity gaps across the value chain. The use of IoT will facilitate better collaboration within the organization and the ecosystem” said Sharad Kotagi, market analyst at IDC IT Spending Guides, Customer Insights & Analysis.
From a pure spending perspective, in 2022, the largest portion of spending is expected to remain in the services category, representing roughly 40% of the overall IoT spending in the region. The hardware market for IoT will be the second-largest technology group in 2022, primarily driven by purchases of modules and sensors. Software will be the fastest growing technology category with a five-year CAGR of 13.3% with a focus on application and analytics software purchases.
According to IDC, China will represent 60% of the regional IoT spending in 2022, followed by South Korea and India. Countries with the fastest IoT spending in 2022 are Singapore and Hong Kong.