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Gartner Says 6.4 Billion Connected "Things" Will Be In Use In 2016, Up 30 Percent From 201

Tuesday, 17 November 2015, 04:38 Hrs

Gartner, Inc. forecasts that 6.4 billion connected things will be in use worldwide in 2016, up 30 percent from 2015, and will reach 20.8 billion by 2020. In 2016, 5.5 million new things will get connected every day.

Gartner estimates that the Internet of Things (IoT) will support total services spending of $235 billion in 2016, up 22 percent from 2015. Services are dominated by the professional category (in which businesses contract with external providers in order to design, install and operate IoT systems), however connectivity services (through communications service providers) and consumer services will grow at a faster pace.

"IoT services are the real driver of value in IoT, and increasing attention is being focused on new services by end-user organisations and vendors," said Jim Tully, vice president and distinguished analyst at Gartner.

Enterprises to Bolster IoT Revenue

"Aside from connected cars, consumer uses will continue to account for the greatest number of connected things, while enterprise will account for the largest spending," said Mr. Tully. Gartner estimates that 4 billion connected things will be in use in the consumer sector in 2016, and will reach 13.5 billion in 2020 (see Table 1).

Table 1: Internet of Things Units Installed Base by Category (Millions of Units)

Category

2014

2015

2016

2020

Consumer

2,277

3,023

4,024

13,509

Business: Cross-Industry

632

815

1,092

4,408

Business: Vertical-Specific

898

1,065

1,276

2,880

Grand Total

3,807

4,902

6,392

20,797

Source: Gartner (November 2015)

In terms of hardware spending, consumer applications will amount to $546 billion in 2016, while the use of connected things in the enterprise will drive $868 billion in 2016 (see Table 2).

Table 2: Internet of Things Endpoint Spending by Category (Billions of Dollars)

Category

2014

2015

2016

2020

Consumer

257

416

546

1,534

Business: Cross-Industry

115

155

201

566

Business: Vertical-Specific

567

612

667

911

Grand Total

939

1,183

1,414

3,010

Source: Gartner (November 2015)

In the enterprise, Gartner considers two classes of connected things. The first class consists of generic or cross-industry devices that are used in multiple industries, and vertical-specific devices that are found in particular industries.

Cross-industry devices include connected light bulbs, HVAC and building management systems that are mainly deployed for purposes of cost saving. The second class includes vertical-specific devices, such as specialised equipment used in hospital operating theatres, tracking devices in container ships, and many others.

"Connected things for specialised use are currently the largest category, however, this is quickly changing with the increased use of generic devices. By 2020, cross-industry devices will dominate the number of connected things used in the enterprise," said Mr. Tully.