The Internet of Things: a $7.1 trillion global market by 2020

The rapid growth and expectations surrounding the Internet of Things (IoT) (the expansion of web connectivity to household devices and other consumer- and business-focused platforms) is forcing analysts to re-work their original forecasts. In part, this is down to tech giants, such as Google and Apple, jumping on the IoT bandwagon over the past year. These firms have the capability to launch IoT across the world’s homes. However, start-ups and small businesses remain the primary innovators in this space, which is creating considerable buzz around acquisitions in the sector and providing strong opportunities for business transfer agents.

Research and analytics company IDC believes that the global market for IoT solutions could be worth as much as $7.1 trillion by 2020, a prediction that is being driven by the growing hype around this sector. The surging expansion of smartphones, a global retail market that expanded by over 500% in real terms over 2008-2013 according to trade sources, has exceeded penetration expectations and has laid down the platform for greater connectivity for users’ daily lives. Cars, homes and workplaces are already being rapidly interconnected, providing opportunities for the delivery of niche services. Full-time connectivity is becoming a way of life and IoT is becoming a more compelling proposition.

The smart home is likely to be the biggest and most lucrative driver of IoT. The IDC has unveiled research that reports some 43% of US broadband homes are already willing to invest in a smart home package that offered home management, safety and security features while in France, the UK, Germany and Belgium consumers are beginning to value smart safety and security devices such as smoke alarms and motion detectors. The developed world will naturally be the testing ground for new systems before they are delivered en masse to the swollen populations of the increasingly digitally connected emerging consumers.

Yet perhaps the greatest challenge for the segment could be the idea of universalization, an aspect that the computer and smartphone industry has struggled with. For successful interconnectivity, devices will have to work together regardless of brand or manufacturer. And some steps are already being taken to this regard. Last month, the US’s Consumer Electronics Association (CEA) started a working group tasked with creating a common mark-up language and software templates for smart and connected devices so that developers can easily write applications for them. If a common XML language can be adopted and agreed to by developers, it could be a revolutionary step for the business.

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