Worldwide spending on the Internet of Things (IoT) will reach nearly $1.3 billion in 2019, from $698.6 billion in 2015, according to a new forecast from analyst firm International Data Corporation (IDC).
The market is expected to grow at a compound annual growth rate (CAGR) of 17 percent, driven primarily by demand from the Asia-Pacific region. Marcus Torchia, IDC's Internet of Things research manager noted that the "region's robust IoT spending outlook builds on three dynamics: developing countries' technology investment needs are not fully met with traditional IT, which is allowing IoT investments to accelerate," in a statement.
Other factors cited include "government investments in infrastructure development and local business modernization, in China, India and the Philippines for example, are incorporating more and more IoT elements," said Torchia. A growing consumer class in the region is also "accelerating expenditures in goods and services, including those with IoT components."
IDC estimates that Asia-Pacific will account for more than 40 percent of worldwide IoT spending this year, followed by North America and Western Europe. Combined, the three regions will have spent $250 billion in 2015.
Retailers will help boost IoT demand in the U.S. and Canada, IDC predicts. In an effort to tune in into customer desires and behaviors – and fill up their cash registers -- merchants will invest in in-store contextual marketing solutions that capture data from mobile devices, on-site Wi-Fi networks, cameras and online activity.
Latin America will lead in terms of growth over the next few years with a CAGR of 26.5 percent. "Latin America, the fastest growing IoT category is maintenance and field service, where service data is automatically measured, recorded, and transferred remotely from the field for monitoring and use by technicians," said IDC.
Manufacturers were big spenders this year, with $165.6 billion invested in IoT solutions. The transportation industry came in second place with $78.7 billion. "Manufacturing and Transportation are both a good fit for IoT deployments," observed IDC senior vice president Vernon Turner, in a statement.
"Both industries have been connecting their supply chains, products, customers, and even workers for some time now, and really embrace the value of business outcomes," continued Turner. In terms of growth over the next five years, the insurance industry will lead the charge with a CAGR of 31.8 percent, followed by healthcare.
Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.