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New GSMA Study: Operators Must Look beyond Connectivity to Increase Share of $1.1 Trillion IoT Revenue Opportunity

  • Posted by admin on June 1, 2018

New GSMA Study: Operators Must Look beyond Connectivity to Increase Share of $ 1.1 Trillion IoT Revenue Opportunity

New GSMA Study: Operators Must Look beyond Connectivity to Increase Share of $ 1.1 Trillion IoT Revenue Opportunity

GSMA Intelligence Releases Global IoT Connections and Revenue Forecasts.

The global Internet of Things (IoT) market1 will be worth $ 1.1 trillion in revenue by 2025 as market value shifts from connectivity to platforms, applications and services, according to new data from GSMA Intelligence.

By that point, there will be more than 25 billion IoT connections (cellular2 and non-cellular), driven largely by growth in the industrial IoT market. The Asia Pacific region is forecast to become the largest global IoT region in terms of both connections and revenue3.

“As the number of connected consumer devices and industrial machines grow rapidly, the IoT ecosystem will evolve to become a trillion-dollar market over the course of the next decade,” said Sylwia Kechiche, Principal Analyst, IoT, GSMA Intelligence. “But the IoT revenue opportunity is shifting away from simply connecting devices to addressing specific sectors with tailored solutions, and successful ecosystem players will need to adapt their business models in line with these market trends.”

Revenue Opportunity Moving Beyond Connectivity

Although connectivity revenue will grow over the period, it will only account for 5 per cent of the total IoT revenue opportunity by 2025, underscoring the need for operators to expand their capabilities beyond connectivity in order to capture a greater share of market value. This is a challenge already being addressed by a number of operators, which are creating dedicated IoT business units and service lines.

Meanwhile, the platforms, applications and services segment will continue to increase as a share of overall IoT revenue, capturing two-thirds (68 per cent) of the total by 2025. This category spans multiple IoT layers such as platforms; application services; cloud; data analytics; and security. IoT professional services – which include system integration, managed services and consulting – will account for the remaining 27 per cent share of total IoT revenue by 2025.

Industrial IoT To Drive Connections Growth

GSMA Intelligence forecasts that the total number of IoT connections (cellular and non-cellular) globally will reach 25.2 billion in 2025, up from 6.3 billion in 2016. The industrial segment, which refers to IoT solutions deployed within enterprises or vertical-specific applications, will account for more than half of the connections total by that point (13.8 billion), while the number of IoT connections in the consumer segment will reach 11.4 billion, driven by developments in the smart home market.

Peter Jarich, Head of GSMA Intelligence, explained:

“It’s well understood that connectivity will represent only a fraction of the total IoT opportunity. Complementing our IoT connections data with this major new dataset and analysis on IoT revenue provides a comprehensive and realistic view on where market opportunities exist for operators, vendors, integrators, and everyone else playing in the IoT ecosystem.”

1 Excluding IoT hardware revenue (device, module and chipset).
2 Licensed cellular IoT refers to cellular M2M (2G/3G/4G/5G) and Mobile IoT (NB-IoT/LTE-M).
3 GSMA Intelligence forecasts that the Asia Pacific region will account for $ 386 billion in revenue (35% of global total) and 11 billion connections (44% of global total) by 2025.

The post New GSMA Study: Operators Must Look beyond Connectivity to Increase Share of $ 1.1 Trillion IoT Revenue Opportunity appeared first on IoT Business News.

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