Global Industrial Internet of Things Market

The total market size of the global Industrial Internet of Things market is valued at USD 216.13 billion in the year 2020.

Its market value is expected to grow at a CAGR of 22.8 % within the forecasted time horizon of 2020-2025 because of increasing number of connected gadgets, increasing adoption of digital manufacturing strategies, rising use of IoT in the manufacturing sector, and favorable governmental policies.

However, rising issues of cyberattacks and inadequate IT infrastructure might restrain the growth and development of this market. Its market value is expected to reach USD 603.54 billion by the end of the year 2025.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Pricing Trends
Regulatory Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

The Internet of Things in industrial sector is concerned with the integration of the industrial machine sensors and actuators with the internet facilities to improve the performance of the industries. The IoT is applied for asset management, remote servicing, operational intelligence, advanced analytics, predictive maintenance, and remote monitoring in the industrial sector.

The adoption of the internet of things in the industrial sector is concerned with the multiple number of pros in terms of work efficiency, accuracy and safety. Its use can ensure the safety of the workforce, reducing the operational expenses and increasing the productivity of the workers.

Based on the type of components, the global industrial internet of things market consists of solutions, services and platforms. Here, solution includes remote monitoring, data management, analytics, security solutions, and others. Services include professional and managed. Platforms include connectivity management, application management, and device management.

Based on the applications, the global IIoT market is comprised of manufacturing, energy & power, oil & gas, healthcare, logistic & transport, and others.

As the type of software used are considered, it includes farm management systems, remote patient monitoring systems, distribution management systems, and others.

Market Overview

The total market size of the global Industrial Internet of Things market is valued at USD 216.13 billion in the year 2020 and is expected to reach USD 265.40 billion in the year 2021. Its market value is expected to grow at a CAGR of 22.8 % within the forecasted time horizon of 2020-2025. Its market value is expected to reach USD 603.54 billion by the end of the year 2025.

Based on geography, the APAC region is leading the global market with a market share of almost 43.95% of the total global industrial internet of things market. The market size of this region is valued at USD 95 billion. in the year 2020.

Based on the type of components, the solution segment is leading the market with a market share of almost 45% of the total global IIoT market. The market size of this segment is valued at USD 97.25 billion in the year 2020.

As per the application of the global IIoT market is considered, the manufacturing segment is leading the market with a market share of almost 33.33% of the total global IIoT market. The market size of this segment is valued at USD 72.04 billion in the year 2019.

Based on the type of software, the farm management system segment is leading the market with a market share of almost 43.93% of the global IIoT market. The market size of this segment is valued at USD 94.96 billion in the year 2021.

Increasing number of connected gadgets, increasing adoption of digital manufacturing strategies, rising use of IoT in the manufacturing sector, and favorable governmental policies are the factors responsible for the growth and development of the global IIoT market. However, rising issues of cyberattacks and inadequate IT infrastructure might restrain the growth and development of this market.

Market Risks

Growing threats of cyberattacks

Globally, the issues of data breach, cyberattacks and phishing attempts are rising as a burning issue. For instance, about three thousand cyber security-related issues are reported every day in the year 2020 in the context of India. It has been projected the cyber breaches will cost almost USD 2.1 trillion and at the first half of the year 2020, almost 36 billion data breaches were recorded. Here, about 45% of the breaches featured hacking, 17% involved malware and 22% involved phishing.

The issue of the cyberattacks and data breaches are rising in the industrial sector too with the rise in the adoption of internet connected machineries, artificial intelligence, and machine learning. For instance, Colorado manufacturing facility (Manufacturer of space and defense equipment) has experienced the attack of DoppelPaymer ransomware and suffered the estimated loss of USD 50 million. Thus, the rising issue of the cyberattacks might create the risk for the growth and development of the global IIoT market.

Top Market Opportunities

The factors driving the growth and development of the global industrial internet of things market are increasing number of connected gadgets, easy availability of affordable sensors, increasing adoption of digital manufacturing strategies, growth in smart transportation & smart cities, standardization of IPv6, and rising growth of big data analytics. The major market opportunities creating the significant opportunity for the growth and development of the global IIoT market are discussed as follows:

Increasing number of connected gadgets

Globally, the number of the internet connected devices are in rising trend. The number of the connected devices has reached 30.73 billion in the year 2020, increased from 15.41 billion in the year 2015. Here, the enterprise IoT accounts for more than half of the connected devices. It has been expected that the number of the connected devices will reach 35.82 billion by the end of the year 2021. The number of the connected devices will be about 75.44 billion devices by the end of the year 2025. The rising number of the connected gadgets is creating a significant opportunity for the growth and development of the global IIoT market.

Increasing adoption of digital manufacturing strategies

Globally, the willingness and adoption of the digital strategies are in rising trend. A survey conducted among almost 200 C-level executives from multiple manufacturing industries by Southfield-based SME has revealed that the level of the adoption of the internet of things has been increased by almost three-fold over the time horizon of past two years. Here, almost 84% of the study participants were currently implementing and evaluating digital manufacturing strategies in the year 2020, increased from 27% of them in the year 2018. About 41% of them revealed that their companies are at least mostly digital.

Along with this, almost 69% of the survey participants are implementing industry 4.0 solutions and sought big data analytics as very important factor to their success. Here, about 66% of them found IoT as important part for the future of their companies’ success and 56% of them saw the sensors as an evolving trend. Thus, increasing willingness towards the adoption of the digital manufacturing strategies is creating a significant opportunity for the growth and development of the global IIoT market.

Market Drivers

Rising use of IoT in the manufacturing sector

The global adoption of the industry 4.0 has enhanced the penetration of the AI and IoT technologies in the manufacturing sector. The global market for the adoption of the internet of things and artificial intelligence technology in the manufacturing sector is growing at the rate of 10.1% within the time horizon of 2020-2025. The market size of the IoT in the manufacturing sector is expected to reach USD 53.8 billion by the year 2025, increased from USD 33.2 billion in the year 2020. The rising adoption and growth of the use of the internet of things in the manufacturing sector is creating a significant opportunity for the growth and development of the global industrial internet of things market.

Favorable governmental policies

Globally, the governmental and non-governmental organizations are developing the policies and programs in the favor of the development and adoption of the internet of things in industrial sector. For instance, the government of India has developed the plan of developing 100 smart cities and Digital India Plan promoting the setup of digital infrastructure in industrial sector.

Similarly, the government of China has developed the boarder government plans entitled Made in China 2025 for the acceleration of the IoT technology. Along with this, the Ministry of Finance has developed the IoT special Project Fund of average USD 80 million per year and is supporting more than 500 IoT related research and development projects. Thus, the favorable governmental policies for the promotion of the internet of things infrastructure is driving the growth and development of the global IIoT market.

Market Restraints

Inadequate IT infrastructure

Globally, the Issue of inadequate IT infrastructure in terms of power internet connectivity, unstable power supply system, and poor internet architecture is quite prevalent. According to Ookla, the global average download speed is about 85.73 Mbps and average mobile download speed is 35.96 in September 2020. Here, Singapore is the country with the fastest broadband download speed of about 226.6 Mbps followed by Hong Kong, Romania, and the United States. However, the internet speed of about 127 countries is below the global average internet speed of 85.73 Mbps among top 170 countries.

Along with this, the issue of power supply system is also quite interrupted in some of the countries. For instance, it has been estimated that the average reported level of the electricity shortages has reduced the revenue of the manufacturing plant by almost 5% to 10% on average in the context of India. Thus, the issue of the slow internet connectivity and interrupted power supply might retrain the growth and development of the global industrial internet of things market.

Industry Challenges

Incompatibility of legacy equipment with communication networks

At present, some of the industries are using the conventional machineries lacking the system of the data transmission and communication. Because of this, either replacement or alterations are required to develop the system of the wireless and wired network for communication. It will increase the expenditure of the equipment and is quite challenging for the market players to develop the system of machine-to-machine communication system in the old machineries.

Technology Trends

Adoption of new and advanced technologies is creating a favorable environment for the growth and development of the global industrial internet of things market. Some of the key technological trends in this market are discussed as follows:

Edge computing: This technology is concerned with the distributed computing system enabling the computation and data storage close to the sources of the data.

M2M communication: This technology is used to enable the networked devices to exchange the information between the mechanical and electrical devices. The major components of this technology are wireless devices, embedded sensors, wireless LAN, and fiber.

Internet Protocol Version 6: It is the advanced protocol with the capacity to support an open architecture, advanced security, high reliability and appropriate foundation for innovations.

Smart grids: It is the electricity network that allows the systematic communication between consumers and suppliers with self-healing capabilities to detect, react and pro-act to the changes in multiple issues.

Automatic vehicle location technology: This technology adopts the transport operators to provide the direct linkage between vehicles, operation control centers and real-time passenger information systems for the surveillance operations.

Pricing Trends

The price of the products of this global industrial internet of things market depends upon the type of components, software, and end users. The average cost of the IoT development ranges from USD 10,000 to USD 50,000 per unit.

The approximate cost of the application for the IoT in the manufacturing and home automation is USD 50,000. The price of the components adopted in the field of the internet of things is in declining trend. The average price of the sensor for the internet of things has declined from USD 1.3 in the year 2004 to USD 0.44 in the year 2018.

Regulatory Trends

The rising issue of the cyberattacks has surged the need for the development of the strict regulations and laws related to the protection of the data and IoT privacy standards. However, specific data protection rules in the United States are quite limited. Some of the regulations directly or indirectly related to the global industrial internet of things market are discussed as follows:

IoT cybersecurity law: This law was developed by the UK government in January 2020 to improve the consumer data security. According to it, the passwords for all connected devices must be unique, manufacturers must provide a public point of contact to report vulnerabilities and minimum period of security updates must be specified when sold.

General Data Protection Regulation: This regulation was developed by the European Union in the year 2018. According to it, the high level of fines is applied in the case of the data breaches.

ePrivacy Regulation: This regulation is concerned with all the electronic communications from the perspective of web, email and other electronic communications.

Market Size and Forecast

Based on geography

The APAC region is leading the global market with a market share of almost 43.95% of the total global industrial internet of things market. The market size of this region is valued at USD 95 billion. in the year 2020.
The North American region accounts for the market share of almost 21.97% of the total market size of global IIoT market. The market size of this segment is valued at USD 47.50 billion in the year 2020.
The European region accounts for the market share of almost 27.19% of the total market size of global IIoT market. The market size of this segment is valued at USD 58.78 billion in the year 2020.

Based on the type of components

The solution segment is leading the market with a market share of almost 45% of the total global IIoT market. The market size of this segment is valued at USD 97.25 billion in the year 2020.
The services segment accounts for the market share of almost 35.55% of the total market size of global IIoT market. The market size of this segment is valued at USD 76.84 billion in the year 2020.
The platform segment accounts for the market share of almost 19.44% of the total market size of global IIoT market. The market size of this segment is valued at USD 42.02 billion in the year 2020.

Based on the application

The manufacturing segment is leading the market with a market share of almost 33.33% of the total global IIoT market. The market size of this segment is valued at USD 72.04 billion in the year 2019.
The Energy & power segment accounts for the market share of almost 19.17% of the total market size of global IIoT market. The market size of this segment is valued at USD 41.42 billion in the year 2020.
The oil & gas segment accounts for the market share of almost 16.39% of the total market size of global IIoT market. The market size of this segment is valued at USD 35.42 billion in the year 2020.
The Healthcare segment accounts for the market share of almost 13.61% of the total market size of global IIoT market. The market size of this segment is valued at USD 29.41 billion in the year 2020.
The logistic & transport segment accounts for the market share of almost 8.61% of the total market size of global IIoT market. The market size of this segment is valued at USD 18.61 billion in the year 2020.

Based on the type of software

The farm management system segment is leading the market with a market share of almost 43.93% of the global IIoT market. The market size of this segment is valued at USD 94.96 billion in the year 2021.
The remote patient monitoring systems segment accounts for the market share of almost 27.27% of the total market size of global IIoT market. The market size of this segment is valued at USD 58.94 billion in the year 2020.
The distribution management segment accounts for the market share of almost 22.72% of the total market size of global IIoT market. The market size of this segment is valued at USD 49.12 billion in the year 2020.

Impact of COVID-19 on IIoT market

The pandemic outbreak of COVID-19 has influenced the industrial IoT market as the manufacturing industry was facing the huge challenges at the early stage of pandemic. Most of the automotive companies have downsized the activities related to manufacturing. However, the social mobility restrictions and unavailability of the workforce has caused the manufacturers to accelerate use of AI and IoT in the manufacturing process. The adoption of the IoT in the industrial sector have helped in the monitoring and equipment maintenance of the manufacturing units in the absence of the regular workforce.

Because of the pandemic outbreak of COVID-19, the penetration and adoption of the IoT technologies such as Mobile Personal Emergency Response System has been increased in the medical sector to facilitate the process of the patient monitoring without the physical involvement of the health care professionals. Thus, the pandemic outbreak of COVID-19 disease has promoted the use of the internet of things in industrial sector for regular monitoring and maintenance.

Market Outlook

The global IIoT market is expected to grow at the CAGR of 22.8% within the forecasted time horizon of 2020-2025 because of increasing number of connected gadgets, increasing adoption of digital manufacturing strategies, rising use of IoT in the manufacturing sector, and favorable governmental policies. Its market value will reach USD 603.54 billion by the end of the year 2025.

Impact of COVID-19 on IIoT market

Market Outlook

Technology Roadmap

The major technological changes occurring in this global industrial internet of things market are edge computing, M2M communication, Internet protocol version 6, smart grids, automatic vehicle location technology, bus rapid transit systems, travel assistant devices, global positioning systems, remote sensing, variable rate technology, precision framing, etc. Adoption of these new and advanced technologies is creating a favorable environment for the growth and development of the global industrial internet of things market.

Distribution Chain Analysis

The key stakeholders involved in the operation of this market are equipment suppliers, software vendors, distributors, sales, and end-users. At first, all the equipment required for the development of the internet of things system are supplied and software for its operation are developed. Then, developed IoT platforms are available to the end-users.

Competitive Landscape

The major key market players dominating the global IIoT market are ABB, General Electric Company, IBM Corporation, Intel Corporation, Rockwell Automation, Siemens AG, and Microsoft Corporation. Here, General Electric Company is leading the global IIoT market accounting the market share of almost 24% of the total market size of the global IIoT market followed by IBM, and Atmel. These companies are investing in the sector of research and development activities as the strategies for the introduction of innovation and naïve solutions.

Competitive Factors

The key market players engaged in this market are competing for the product portfolio expansion, cost reduction, enhance customer experience, strengthen brand awareness, high investment in research and development activities, mergers & acquisitions, geographical expansion, and collaborations. For instance, The Abee Research Labs Pvt. Ltd. of India has secured USD 1 million from pi Ventures from the developed of the AI-powered IIoT platform entitled Switch On.

General Electric Company has launched Predix Edge to develop the streamlining edge-to-cloud computing. Intel has established the partnership with the John Deere to develop the AI technology in the manufacturing welding process in April 2021. Similarly, Intel has partnered with Nebbiolo for edge computing software in June 2020. Cisco has also established partnership with the Newark to offer industrial IoT network solutions in February 2021.

Key Market Players

The key market players engaged in the operation of this global IIoT market are ABB, General Electric Company, IBM Corporation, Intel Corporation, Rockwell Automation, Siemens AG, and Microsoft Corporation. Short profile of the key market players engaged in this market are discussed as follows:

ABB: It is the Swedish multinational company specialized in the field of robotics, power, heavy electrical equipment, and automation technology areas. The revenue of this company is valued at USD 27.98 billion.

General Electric Company: It is the US-based multinational company engaged in the sector of aviation, healthcare, power and renewable energy. Its products are electric motors, energy, finance, health care, software, and wind turbines.

IBM Corporation: It is the US-based multinational technology company engaged in the production and sale of computer, hardware, middleware, software and consulting services.

Intel Corporation: It is the US based multinational corporation engaged in the development of the microprocessors, personal computers, central processing units, integrated graphics, network interface, mobile phones, etc.

Strategic Conclusion

The global IIoT market is growing at a rate of 22.8% because of increasing number of connected gadgets, increasing adoption of digital manufacturing strategies, rising use of IoT in the manufacturing sector, and favorable governmental policies. However, rising issues of cyberattacks and inadequate IT infrastructure might restrain the growth and development of this global industrial internet of things market.

References

Appendix

IoT= Internet of Things
USD= United States Dollar
CAGR= Compound Annual Growth Rate