Market revenues associated with network communications, sensing, and control functions in subsystems and objects attached to the Internet of Things (IoT) are forecast to grow 29 percent in 2015 to $62.4 billion after increasing 21 percent in 2014 to about $48.4 billion, according to data in IC Insights’ recently released Update to its 2015 IC Market Drivers Report. Figure 1 provides a breakout of sales growth in five IoT market categories, based on IC Insights’ updated forecast.
IC Insights raised its projection for IoT-related revenues in 2015 to show much stronger growth in wearable systems after the formal launch of Apple’s first smartwatches in April 2015. The long-term fate of smartwatches continues to be debated. Whether these wearable systems evolve into a major end-use market category or simply become a niche with a short lifecycle remains to be seen. In the short-term, however, the launch of the Apple Watch—jam-packed with ICs, sensors, and other components—has provided a major boost to semiconductor unit shipments and sales to the wearable IoT category.
Total IoT-related revenues (excluding Internet servers, network infrastructure, and cloud-computing systems) are now expected to rise by a compound annual growth rate (CAGR) of 21.1 percent from 2013 to 2018, reaching $104.1 billion at the end of the forecast period.
Worldwide growth of “things” connected to the Internet continues to significantly outpace the addition of human users to the World Wide Web, according to the IC Market Drivers Update. New connections to the “Internet of Things” (IoT) are forecast to increase 40 percent in 2015 with 574 million new Internet connections expected to be attached to embedded systems, sensors, instruments, vehicles, controllers, cameras, wearable electronics, and other objects. IoT connections grew to 410 million in 2014, which was a 45 percent increase from 282 million in 2013 (Figure 2). The total installed base of connected things on the IoT is forecast to reach 13.2 billion units worldwide in 2015 versus about 3.1 billion humans using computers, cellphones, and other system applications over the Internet this year, based on IC Insights’ updated projections. By the end of this decade, more than 25 billion systems and objects are expected to be attached to the Internet versus about 4.4 billion human users.
