Finding “reliable” data about the installed base of Internet of Things (IoT) devices, market size and forecasts is not easy and can be expensive if you have to buy a commercial market report. However, there is quite a bit of free data out there which I have collated here. Creating IoT stats is notoriously difficult depending on accuracy of models, assumptions and definitions. Forecasts need to be treated very cautiously. However, by looking through a range of estimates from different providers it should be possible to get a rough idea of how the IoT market may look in the next few years. I have focused on providing links to the original sources where possible.

Feel free to contact me if I have missed anything and I’ll amend the list. (Updated 13 December 2017)

Internet of Things Statistics

Title: IDC Forecasts Worldwide Spending on the Internet of Things to Reach $772 Billion in 2018

Date: 7 December 2017

Author: IDC

Summary: “Worldwide spending on the Internet of Things (IoT) is forecast to reach $772.5 billion in 2018, an increase of 14.6% over the $674 billion that will be spent in 2017. A new update to the International Data Corporation (IDC) Worldwide Semiannual Internet of Things Spending Guide forecasts worldwide IoT spending to sustain a compound annual growth rate (CAGR) of 14.4% through the 2017-2021 forecast period surpassing the $1 trillion mark in 2020 and reaching $1.1 trillion in 2021.”

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Link: https://www.idc.com/getdoc.jsp?containerId=prUS43295217

Title: IDC Says Worldwide Spending on the Internet of Things Forecast to Reach Nearly $1.4 Trillion in 2021

Date: 14 June 2017

Author: IDC

Summary: “Worldwide spending on the Internet of Things (IoT) to grow 16.7% year over year in 2017, reaching just over $800 billion. By 2021, global IoT spending is expected to total nearly $1.4 trillion as organizations continue to invest in the hardware, software, services, and connectivity that enable the IoT.”

Graphic:

Link: https://www.idc.com/getdoc.jsp?containerId=prUS42799917

Title: Gartner Says 8.4 Billion Connected “Things” Will Be in Use in 2017, Up 31 Percent From 2016

Date: 7 February 2017

Author: Gartner

Summary: “Gartner, Inc. forecasts that 8.4 billion connected things will be in use worldwide in 2017, up 31 percent from 2016, and will reach 20.4 billion by 2020. Total spending on endpoints and services will reach almost $2 trillion in 2017.”

Graphic:

Link: http://www.gartner.com/newsroom/id/3598917

Title: Winning in IoT: It’s All About the Business Processes

Date: 5 January 2017

Author: Boston Consulting Group (BCG)

Summary: “Our analysis uncovered three major findings. One, there is no such thing as “the” Internet of Things: today’s market is heavily driven by specific use case scenarios. Two, while in the aggregate, companies will spend an incremental €250 billion on IoT in 2020 (over and above their normal technology spending), three industries will account for approximately 50% of that spending. And three, although all layers of the IoT technology stack are poised to grow through 2020, the layers are not equally attractive.”

Graphic:

Link: https://www.bcgperspectives.com/content/articles/hardware-software-energy-environment-winning-in-iot-all-about-winning-processes/

Title: Internet of Things Spending Forecast to Grow 17.9% in 2016 Led by Manufacturing, Transportation, and Utilities Investments, According to New IDC Spending Guide

Date: 4 January 2017

Author: IDC

Summary: International Data Corporation (IDC) released an update to its Worldwide Semiannual Internet of Things Spending Guide report, which predicted IoT spending will reach US$1.29 trillion in 2020

Graphic:

Link: https://www.idc.com/getdoc.jsp?containerId=prUS42209117

Title: Machina Research expands the scope of its IoT forecasts and highlights a USD4 trillion revenue opportunity in 2025

Date: 3 May 2016

Author: Machina Research

Summary: “Machina Research comprehensively extends the coverage of its forecasts to include almost the entirety of the Internet of Things revenue opportunity, predicting it will rise from USD892 billion in 2015 to USD4 trillion in 2025.”

Graphic: n/a

Link: https://machinaresearch.com/news/machina-research-expands-the-scope-of-its-iot-forecasts-and-highlights-a-usd4-trillion-revenue-opportunity-in-2025/

Title: Gartner Says Worldwide IoT Security Spending to Reach $348 Million in 2016

Date: 25 April 2016

Author: Gartner

Summary: IoT security expenditure to 2018

Graphic:

Link: http://www.gartner.com/newsroom/id/3291817

Title: Machina Research expands the scope of its IoT forecasts and highlights a USD4 trillion revenue opportunity in 2025

Date: 3 May 2016

Author: Machina Research

Graphic: n/a

Link: https://machinaresearch.com/news/machina-research-expands-the-scope-of-its-iot-forecasts-and-highlights-a-usd4-trillion-revenue-opportunity-in-2025/

Title: IoT platforms: enabling the Internet of Things

Date: March 2016

Author: IHS

Summary: Forecast of global IoT installed base from 2015 to 2025

Graphic:

Link: https://www.ihs.com/Info/0416/internet-of-things.html

Title: Cloud Index White Paper

Date: 21 April 2016

Author: Cisco

Summary: “Globally, the data created by Internet of Everything (IoE) devices will reach 507.5 ZB per year (42.3 ZB per month) by 2019, up from 134.5 ZB per year (11.2 ZB per month) in 2014.
● Globally, the data created by IoE devices will be 269 times higher than the amount of data being transmitted to data centers from end-user devices and 49 times higher than total data center traffic by 2019.”

Graphic: n/a

Link: http://cisco.com/c/en/us/solutions/collateral/service-provider/global-cloud-index-gci/Cloud_Index_White_Paper.html

Title: IDC Forecasts Worldwide Shipments of Wearables to Surpass 200 Million in 2019, Driven by Strong Smartwatch Growth and the Emergence of Smarter Watches

Date: 17 March 2016

Author: IDC

Summary: “Worldwide shipments of wearable devices are expected to reach 110 million by the end of 2016 with 38.2% growth over the previous year. An expanding lineup of vendors combined with fast-growing consumer awareness and demand will generate double-digit growth throughout the 2015-2020 forecast period, culminating in shipments of 237.1 million wearable devices in 2020. The market will also be driven forward by the proliferation of new and different wearable products. Watch and wristband shipments will reach a combined total of 100 million shipments in 2016, up from 72.2 million in 2015.”

Graphic: n/a

Link: https://www.idc.com/getdoc.jsp?containerId=prUS41100116

Title: Gartner Says 6.4 Billion Connected “Things” Will Be in Use in 2016, Up 30 Percent From 2015

Date: 10 November 2015

Author: Gartner

Summary: “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.”

Graphic: n/a

Link: http://www.gartner.com/newsroom/id/3165317

Title: IC Insights Raises Growth Forecast for IoT

Date: 16 July 2015

Author: IC Insights

Summary: Global IoT revenues by segment from 2012 to 2015

Graphic:

Link: http://www.icinsights.com/news/bulletins/Internet-Of-Things-Market-To-Nearly-Double-By-2019-/

Title: The Internet of Things: “Smart” Products Demand a Smart Strategy

Date: March 2015

Author: Woodside Capital Partners

Summary: Large (101 pages) PDF with lots of data from different sources.

Graphic:

Link: http://www.woodsidecap.com/wp-content/uploads/2015/03/WCP-IOT-M_and_A-REPORT-2015-3.pdf

Title: Internet of things: making the most of the second digital revolution

Date: 18 December 2014

Author: UK Government

Summary: The downloadable PDF contains some useful comparisons of estimates from the main IoT vendors and analysts. See pages 14 and 20

Graphic:

Link: https://www.gov.uk/government/publications/internet-of-things-blackett-review

Title: The Internet of Things: Sizing up the opportunity

Date: December 2014

Author: McKinsey & Co.

Summary: Installed base forecast to 2020 and value to global economy for 2025

Graphic:

Link: http://www.mckinsey.com/industries/high-tech/our-insights/the-internet-of-things-sizing-up-the-opportunity

Title: The ‘Internet of Things’ Will Be The World’s Most Massive Device Market And Save Companies Billions Of Dollars

Date: 18 November 2014

Author: Business Insider

Summary: Estimates of global installed base and annual growth to 2019

Graphic:

Link: http://uk.businessinsider.com/how-the-internet-of-things-market-will-grow-2014-10?r=US&IR=T

Title: What Exactly is the Internet of Things?

Date: March 2014

Author: Harbor Research

Summary: Slideshare deck with data on IoT devices shipments by sector and revenue estimates for those segments to 2020.

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Link: http://www.slideshare.net/harborresearch/harbor-researchs-infographic-on-the-internet-of-things-and-smart-services

Title: The Internet of Things: How the Next Evolution of the Internet Is Changing Everything

Date: April 2011

Author: Cisco

Summary: Downloadable PDF. Forecasts 50 billion connected devices by 2020

Graphic:

Link: http://www.cisco.com/c/dam/en_us/about/ac79/docs/innov/IoT_IBSG_0411FINAL.pdf

Other Resources:

For a good overview of paid-for market reports see this page from Postscapes.
Forbes has a summary of market size estimates and forecasts (published in November 2016)

Are we suffering from subscription fatigue?

HP’s Instant Ink service offers some lessons for companies exploring what the IoT might mean for their business models. The key benefits which HP is getting from Instant Ink are:
• Direct relationships with customers, bypassing retailers and getting customer names, addresses and billing details;
• Monthly recurring revenue streams allowing more predictable and stable income;
• Usage data allowing better inventory planning and optimization of pricing packages;
• Ability to sell other products and services from the direct customer relationship.
HP seems to be taking lessons from the mobile, video streaming and gym/personal fitness sectors in terms of offering tiered monthly packages for its ink service, allowing usage rollovers and optimizing the pricing model to balance its costs across users who print a lot and those who print very rarely. Just like gym memberships, those who use the facilities every day are subsidized by those who joined in January and stopped attending in February but continue to pay their monthly subscriptions. In the case of Instant Ink, users who print a lot of colour pages benefit at the expense of those who print a few pages of black text.
In the same way that Dollar Shave Club brought the razor and blade business model into the 21st century, HP is attempting to bypass intermediaries by selling directly to owners of its printers. Knowing the names, addresses and billing details of its users is a massive step forward for the company and offers opportunities for upselling and the marketing of associated products. However, looking at some online discussions by users of Instant Ink reveals some possible manipulation of the alleged benefits of the service. HP outlines the cost savings offered by Instant Ink but as several users have pointed out, the ink cartridges sent out to customers are larger than those available in the shops, making cost comparisons rather tricky. It seems retailers are not able to sell ink cartridges with the same capacity as those sent out via Instant Ink. HP may wish to comment on that.
Whatever the merits of these complaints, it seems HP is fully committed to developing Instant Ink as a core part of its business strategy. This is not surprising, given the profitability of its printer division compared to its PC business. In quarter 1 of financial year 2017, HP generated $8.2 billion of sales from its PCs (laptops, PCs, workstations) and $313 million of operating profit – a margin of 3.8%. Its printer business, however, had sales of $4.5 billion but generated a profit of $716 million – a margin of 16%. Of that $4.5 billion in printer sales, two thirds came from ink and the profit margins on that would be considerably higher than 16%. According to the company’s annual 10K report for 2016, printer revenues were significantly down due to a number of factors including lower unit sales. This places increased pressure on HP to improve its margins as sales of printers fall and new ways of improving profitability have to be found. However, the new, more profitable business and revenue models need to also offer benefits to end users, a lesson many companies experimenting with the IoT are finding out. As a recent Harvard Business Review article noted:

Getting customers to agree to have their products monitored, which in turn means giving them something of value in return. To get value from the IoT, you have to give value first. Or as Intel Corp.’s vice president and GM of its $2 billion IoT business Jonathan Ballon says: “The benefit has to be to customers. There has to be a value exchange,” he told us. This is especially the case when a company’s wireless sensors are transmitting sensitive customer data such as medical conditions. HP Inc., the part of the old Hewlett-Packard that makes printers, printing ink, PCs, and other digital devices, has found the same thing in its HP Instant Ink initiative. HP outfitted its printers in 2013 with wireless sensors that monitor ink levels and automatically trigger reorders before customers run out. So HP dangled cost savings of up to 50% and reduced headaches for customers (i.e., running out of ink), and it enticed many customers. The CIO of HP Inc., Naresh Shanker, told us: “There has to be customer value – cost savings, very high-quality ink, a great customer experience – all of that.”

Whether all HP’s Instant Ink customers would agree with this is debatable. A recent article on the Trusted Reviews website noted:

To avoid too many deliveries, HP Instant Ink uses huge cartridges with much greater ink reserves than standard ones. HP couldn’t tell us the exact capacity, but it calls them “XXL” cartridges.
Another benefit is that there’s no 12-month contract – you can leave Instant Ink whenever you like. However, the cartridges are clever enough to know whether you’re signed up or not and you won’t be able to print using an Instant Ink cartridge once your membership term has expired.

The issue of special sized cartridges used in Instant Ink was noted by a commenter, Charlie, on the UK’s Which website:

I have the 50 page plan. I’m fine with this service but what irks me is that HP made a special high capacity cartridge for users of this plan so they last longer. This shows how they build in checks to make us buy more cartridges, like shipping printers with a few cc’s of ink and selling cartridges with a few cc’s more but with this plan they are responsible for replacing cartridges so they load them up with ink so they last a very long time. It’s the special capacity cartridges not for sale to the public that make this plan work for both us and HP.

However, as noted earlier in this post, the benefits of Instant Ink to users will depend on their printing habits. According to a PC Adviser review of the service:

The real crown in HP’s hat though is that those 50 pages can be anything at all. If you want to knock out 40 A4 glossy colour photographs, they count just the same as a single text page. Conversely those last pages of documents that only have a line or so at the top of the page actually become more costly under this scheme. As we said, it’s all down to how you use it.

So what lessons does HP’s Instant Ink have for established companies developing IoT business models? I suppose the key one is that the benefits for customers need to be clear and transparent. As more companies switch to subscription models it will become ever more important for users to be able to justify the growing number of monthly debits from their bank accounts. When domestic budgets are squeezed, hard decisions will be made as to which subscriptions to cancel; Netflix, Spotify, cable/satellite television or HP Instant Ink? HP is pinning its hopes that Instant Ink won’t be the first subscription to be cancelled. A recent job advertisement for a Manager of Instant Ink Business Intelligence stated:

This position is in support of HP Instant Ink, a worldwide ink subscription initiative lead out of HP’s Imaging, Printing & Solutions Global Business Unit. HP Instant Ink represents one of the top strategic priorities for the IPS business thus a critical success factor to generating future revenue growth for HP. As the market share and financial leader in the global inkjet market, HP’s inkjet business was built on the highly successful “razor and blade” business model. HP Instant Ink represents a new subscription based business model that is designed to transform the global inkjet market by radically changing the perceived value of HP ink. This is high visibility initiative that has been reviewed at the highest levels in the company.