With 22 billion connected devices, how can we generate revenue?

The latest research report from Strategy Analytics’ Connected Home Devices (CHD) service, Global Connected and IoT Device Forecast Update, states that the number of connected devices worldwide reached 22 billion by the end of 2018. Enterprise IoT remains the leading segment, accounting for more than half of the market, with mobile/computer accounting for more than a quarter. However, the report predicts that smart home will become the fastest growing segment in the next few years, driven by further rapid growth in smart home adoption, especially in untapped regions. The report concludes that the IoT revenue opportunity remains uncertain, especially for service providers, and companies looking to benefit from IoT should be thoughtful about the target segments, commercial activities and revenue models they should prioritize.

The report predicts that there will be 38.6 billion connected devices by 2025 and 50 billion by 2030. Certain segments, such as connected computing devices, will see low growth or decline, while others, such as media devices, will continue to grow steadily. Growth rates for wearables and connected cars will remain positive, but their volumes will be modest relative to other segments.

David Mercer, Chief Analyst and author of the report, commented: “Service providers may look at the massive scale of the IoT and assume that the benefits will automatically flow to them. However, what remains to be seen is which applications and services will drive the benefits and by how much. In addition, service providers will need to conduct more research to understand how this ecosystem will evolve to meet the needs of future consumers.”

David Kerr, Senior Vice President at Strategy Analytics, added: “As the number of connected devices in use worldwide approaches 40 billion by 2025, there will be a huge opportunity for semiconductor manufacturers of displays, cameras, memory, batteries and other enabling technologies. AI will become pervasive across mobile, home, automotive and computing platforms. Optimizing the user experience across multiple devices, operating systems and user interfaces will be a key battleground.”