Frost & Sullivan: Smart cities to fuel APAC’s IoT market
When it comes the Internet of Things (IoT), the Asia Pacific market is buoyant, finds Frost & Sullivan, predicting it to reach $436.77 billion in revenue by 2026, up from $96bn in 2020, a CAGR of 28.52%.
According to Frost & Sullivan’s recent analysis, this buoyancy of APAC’s IoT market, which is being driven by growing investments 4G/LTE and 5G, reduced IoT sensor costs, and government support, is being transformed specifically by Mega Trends, including the integration of edge-computing networks into IoT systems and new narrow-band (NB) IoT deployments.
In fact, according to Frost & Sullivan, the region accounts for 40% of global Low Power Wide Area (LPWA) connections, with NB-IoT accounting for 97% of them.
"We forecast that the rise of NB-IoT technology will benefit low-resource IoT devices penetration,” says Hemangi Patel, Information and Communication Technology Research Analyst at Frost & Sullivan, adding that “NB-IoT is expected to be an integral part of IoT connectivity, addressing requirements related to low-bandwidth, low-speed connections in utilities, industries, and households”.
Unsurprisingly, China leads IoT spending, accounting for more than half of the Asia Pacific market, followed by Japan and Australia.
Smart cities to fuel growth
Government spending on smart cities accounts for nearly a third of the region's combined spending, followed by transportation and logistics, then manufacturing. The pandemic however hasnegatively impacted customers' transformation journeys across several industry verticals, resulting in delays in projects such as integrating innovative technologies, including artificial intelligence (AI), Blockchain, and cloud adoption.
According to Patel, on a macro level, increasing government focus on smart cities and Industry 4.0 initiatives is driving demand for digital IoT solutions across APAC. This includes eGovernment, public transportation, smart traffic management systems, and smart power grids. “Given their portfolios ranging from business application solutions to data analytics and end-to-end platforms, telcos are set to become IoT one-stop solution providers,” adds Patel.
In order to capitalise on the region's lucrative IoT market, Frost & Sullivan recommends companies focus on the below growth opportunities:
- Telecom operators can monetise IoT deployments further Vendors should extend their services portfolios by including various other services management features, such as connectivity management, data security, and data routing.
- Multi-cloud as the future of IoT Cloud providers need to include collaborative tools that enable customers to share knowledge on a common platform. Vendors should move beyond offering cloud computation capabilities and provide additional value-added services, such as automation capabilities that enhance computation power.
- Manufacturing and Smart City initiatives Vendors must offer integrated IoT solutions and develop horizontal capabilities. In manufacturing, emerging application areas include predictive maintenance, remote monitoring, and connected operational intelligence. Smart lighting, security and surveillance, and waste management are critical for smart cities.