The global internet of things (IoT) market size accounted for USD 328.6 billion in 2022 and it is projected to hit around USD 2,703.52 billion by 2032, growing at a CAGR of 23.46% during the forecast period from 2023 to 2032.
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The internet of things (IoT) refers to a network of interconnected physical objects, devices, machines, and other products that are embedded with sensors, software, and communication capabilities, allowing them to collect and exchange data with each other and with central systems over the internet. The primary objective of IoT is to enable these smart objects to gather information, make decisions, and interact with the physical world and digital systems, often without direct human intervention. IoT transforms everyday objects into intelligent entities that can monitor their environment, communicate with other devices, and perform actions based on data and commands received through the internet.
This interconnected network of devices spans various domains, including home automation, industrial automation, healthcare, agriculture, transportation, and more, offering a wide range of applications and benefits.
The market growth is driven by several factors including increasing demand for automation, rise in big data for data management, increasing research in cloud computing platforms, the emergence of artificial intelligence and machine learning, and growing government projects for smart cities and 5G technologies.
|Market Size in 2023
|USD 405.69 Billion
|Market Size by 2032
|USD 2,703.52 Billion
|Growth Rate from 2023 to 2032
|CAGR of 23.46%
|2023 to 2032
|By Component, By Deployment, By Organization Size, By Platform, By Technology, and By Industry Vertical
|North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa
Growing application of IoT in the agriculture industry
The growing adoption of IoT in the agriculture sector is expected to drive the growth of the market during the forecast period. IoT provides several benefits to the farmers such as cost reduction, better data analytics and increased overall operational efficiency. IoT technology will help farmers grow better crops at lower costs. They can estimate crop water needs, assess the health of their herds, and gather environmental and equipment metrics with the aid of agriculture IoT devices.
The frequency of visits to inspect crop spraying, equipment operation, and the state of arable land will be decreased by an IoT-based agriculture monitoring system. A smart irrigation system will assist farmers in solving the problem of overwatered or overdried plants by accelerating production and exponential development. Farmers will be able to increase production efficiency, predictive data analytics, and pest management with the help of these environmental sensors. Thus, these benefits drive the IoT market over the projected period.
Issues in technical integration and lack of network connectivity
Numerous applications for the IoT use machine learning and artificial intelligence technology. For IoT devices to mix and match and configure themselves autonomously to deliver different services in different situations, installation and setup with integration a difficult. Many developing nations struggle with the lack of essential technologies, including telecom and networking infrastructure, and are unable to quickly execute smart projects due to a variety of reasons, including poor investment and technical advancements. The research and development of 5G technologies are still happening in several nations. Even developed nations like Europe and North America struggle to replace their outdated infrastructures with modern ones. Thus, this factor is expected to hamper the market growth during the forecast period.
Development of smart cities
The development of smart city initiatives offers substantial opportunities for IoT applications. These include traffic management, waste management, energy conservation, public safety, and improved urban planning to create more sustainable and efficient cities. For instance, according to the data published by the India Brand Equity Foundation, the Smart City Mission's total allotted investments were worth US$27.60 billion. As of March 2021, 5,614 projects worth $ 23.29 billion have been bid and 2,420 projects worth $ 5.40 billion have been completed. Thus, the aforementioned facts drive the revenue growth of the market over the anticipated timeframe.
Based on the components, the global Internet of Things (IoT) market is segmented into hardware, software and services. The software segment held the largest market share in 2022 and is expected to continue the same pattern during the forecast period. This is due to the growth of software based on artificial intelligence and machine learning, the expansion of software deployments on the cloud, and the expanding demand for data management with visibility and control. To offer real-time data that computers and apps can convert and show as information, connected devices need IoT software for data collection and transfer. Software integrations come in many forms and are always evolving to keep up with new technology.
For instance, in May 2022, Visionstate launched the WANDATM family of IoT software tools, which are utilized in hospitals, seniors/aged care institutions, airports, shopping malls, and other public facilities across and beyond North America. Among the products offered are wandaNEXTTM and wandaMOBILETM. Thereby, driving the segment growth.
Based on the deployment, the global Internet of Things (IoT) market is segmented into cloud and on-premises. The cloud segment is expected to dominate the market during the forecast period. Cloud computing is an essential enabler of IoT solutions. It provides the infrastructure, data processing power, scalability, security, and cost-effectiveness needed to handle the massive amounts of data generated by IoT devices and to deliver actionable insights to businesses and consumers. As the IoT market continues to grow, cloud services will likely remain a fundamental component of IoT ecosystems. Thus, this is expected to drive the market growth during the forecast period.
Based on the organization size, the global Internet of Things (IoT) market is segmented into large enterprises and SMEs. The large enterprises segment is expected to hold a significant market share over the forecast period. Large enterprises use IoT to optimize their operations. For instance, manufacturing companies employ IoT for predictive maintenance, reducing equipment downtime and maintenance costs. IoT solutions in supply chain management help streamline logistics, reduce inventory carrying costs, and enhance resource allocation.
Moreover, it generates vast amounts of data that can be analyzed to derive actionable insights. Large enterprises leverage this data to make data-driven decisions, enhance strategies, and improve business processes. Furthermore, IoT enables large enterprises to offer enhanced customer experiences. For instance, in the retail sector, IoT-driven personalized marketing and in-store experiences can attract and retain customers. Thus, these benefits of IoT drive the segment growth.
Based on the platform, the global internet of things (IoT) market is segmented into device management, application management and network management. The device management segment is expected to dominate the market over the forecast period. Device management is a critical component of the IoT (Internet of Things) market, as it involves the efficient and secure management of a wide range of IoT devices, sensors, and endpoints. Effective device management is essential for ensuring the reliability, security, and scalability of IoT deployments.
This solution facilitates the process of onboarding and provisioning IoT devices onto the network. This includes assigning unique identifiers, configuring device settings, and ensuring secure connectivity. In addition, large-scale IoT deployments, especially in industries like manufacturing and logistics, require comprehensive inventory management. Device management systems track device types, locations, and statuses, ensuring accurate asset management. Thereby, driving the segment growth.
Based on the technology, the global internet of things (IoT) market is segmented into radiofrequency identification, pressure sensors, network communications, data processing and near-field communication. The network communication segment is expected to grow at the fastest rate over the forecast period. Network communication is a fundamental aspect of the IoT (Internet of Things) market, as it enables devices, sensors, and endpoints to connect, share data, and communicate with each other and with central systems.
Based on the industry vertical, the global internet of things (IoT) market is segmented into energy & utility, healthcare, transportation & logistics, IT & telecom, manufacturing, e-commerce and others. The e-commerce segment is expected to grow at the highest CAGR over the forecast period. The integration of IoT in e-commerce is transforming the way businesses operate, enhancing customer satisfaction, improving supply chain efficiency, and enabling more personalized shopping experiences. As the IoT market continues to evolve, e-commerce companies will likely explore innovative ways to leverage IoT technology to gain a competitive edge and meet the changing demands of online shoppers. Thus, driving the market growth.
North America is expected to dominate the market during the forecast period. This is due to the accelerating growth in smart device demand, expanding research into artificial intelligence and machine learning-based IoT solutions, increasing use of the Industrial Internet of Things (IIoT) in manufacturing, and a growing number of government initiatives for smart infrastructure and cities. Additionally, Internet of Things (IoT) applications are being developed at a rising rate in the North American nations' retail, healthcare, and agricultural industries, which is driving market expansion. Moreover, the presence of major players operating in the region is also one of the significant factors during the forecast period.
Asia Pacific is expected to grow at the highest CAGR during the forecast period. The market growth in the region is attributed to the increased investment, technology adoption and the proliferation of connected devices. Additionally, the growing product & services by the market players is another factor that propels the market growth in the region.
For instance, in March 2023, A new cloud-based platform was made available, according to a release from Fujitsu, enabling users to safely gather and use health-related data to further digital transformation in the medical industry. Fujitsu's new offering is a component of its continued efforts to support the development of a healthy society. Japanese hospitals and pharmaceutical firms will be able to use the new platform provided by Fujitsu. The new platform makes it possible to safely aggregate health-related data and automatically convert medical data from electronic medical records kept by medical facilities to comply with the HL7 FHIR standards framework. Thus, this is expected to drive the market growth in the region.
Segments Covered in the Report:
By Organization Size
By Industry Vertical
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