March 30 (SeeNews) - Internet of Things (IoT) revenues in Central and Eastern Europe (CEE) will post a compound annual growth rate (CAGR) of 21.5% over the 2016‒2020 period, reaching $24 billion (22.4 billion euro) in 2020, a recent report by market intelligence company IDC shows.
Spending in CEE on the IoT - the internetworking of hardware, smart device and other items embedded with electronics allowing them to collect and exchange data - reached $11 billion in 2016, IDC says.
According to an earlier IDC report, the investments by organisations in CEE in IoT hardware, software, services, and connectivity grеw 19.5% last year, outstripping all main technology markets. IDC has also predicted that the installed base of IoT endpoints connected to networks across CEE will reach some 1.4 billion autonomous "things" by 2020, thus outnumbering the local population more than three times.
The CEE industries leading the way in IoT investments are transportation, at $2.3 billion in 2016, as freight monitoring alone absorbed an estimated $1.6 billion of IoT investments last year. Next came manufacturing with $2.1 billion investments and utilities with $1.2 billion.
The consumer segment will rank among the top sources of IoT spending throughout the five-year forecast, IDC forecasts, adding that the industries that will record the fastest IoT spending growth in CEE are insurance, construction and transportation.
In the area of utilities, combined investments in smart grids for electricity and gas are estimated at $1.1 billion in 2016.
Investments by consumers in smart homes in the region will more than double over the forecast period, exceeding $1.1 billion by 2020, the IDC says.
In the insurance industry, telematics are expected to be the leading use case, while construction machinery management will see the greatest investment in the construction industry. Retail firms are already investing in a variety of use cases, including connected vending machines and in-store contextualized marketing.
"Businesses and government organizations in the CEE region, as well as consumers, are now familiar with the IoT concept and will invest significant amounts on IoT solutions, making the market potential highly attractive for the vast ecosystem of technology vendors," Milan Kalal, programme manager of IoT research with IDC CEMA, says. "Moreover, our annual survey among IoT decision makers across CEE shows that a high number already have an existing IoT solution in place and plan to expand it during the next two years to increase the impact on their business activities."
From a technology perspective, services will remain the largest spending category throughout the coming years, followed by hardware, software, and connectivity. And while services spending will more than double over the next five years, it represents the slowest growing IoT technology group, IDC says.
Hardware and software spending will both grow faster than services and connectivity, although services spending will approach $7 billion by 2020. Modules and sensors, that connect end points to networks, will dominate hardware purchases, while application software will represent more than half of all IoT software investments, according to IDC.
($=0.9317 euro)