The global market for a smart city is projected to grow from USD 900 billion in 2016 to USD 2 trillion in 2025 growing at a CAGR of 9.8%.
- Definition / Scope
- Market Overview
- Market Risks
- Top Market Opportunities
- Market Trends
- Industry Challenges
- Technology Trends
- Pricing Trends
- Regulatory Trends
- Market Size and Forecast
- Market Outlook
- Technology Roadmap
- Distribution Chain Analysis
- Competitive Landcape
- Competitive Factors
- Key Market Players
- Strategic Conclusion
Definition / Scope
The smart city is the one that is holistically connected among healthcare, infrastructure, mobility, building, and energy among a few building blocks equipped with technology that makes life efficient and simpler. Smart healthcare includes but not limits to e-health, connected medical devices.
Likewise, Smart governance makes the function simpler with e-governance, e-education, and centralized management system. Homes are equipped with smart meters, sensor networks, etc.
Similarly, smart mobility systems use data collected from a variety of mobility sources about their patterns in order to help optimize traffic conditions in a holistic manner.
Smart mobility systems include mass transit systems as well as individual mobility systems that feature bicycle sharing, ride sharing, vehicle sharing and, more recently, on-demand transportation.
IBM defines a smart city as “one that makes optimal use of all the interconnected information available today to better understand and control its operations and optimize the use of limited resources.
Smart cities have a very specific definition and have very well defined components. These components include infrastructure, energy, buildings, mobility, citizen, healthcare, technology, and governance.
Then there are other components such as waste management, education, etc that holistically come in place. However, a city is deemed smart if it complies with any 5 of the 8 components specified.
- Smart Governance means IT-enabled administration and governance where there is a use of integrated technology platforms that are easily accessible across various devices to access information achieving transparency and speed, participation and redress public services.
- Smart Energy focuses on alternate sources of energy, smart energy management and billing practices, improvement in energy production and distribution efficiency, and use of energy-saving technologies.
- Smart Mobility improves coordination in public transportation, reduce traffic congestion through the intelligent traffic management system, real-time monitoring of traffic jams through GPRS and satellite technology.
- Smart Building uses technology through modern building management systems, use of energy-saving appliances and led lights, adoption of modern water-saving techniques like low flush toilets, recycling and proper utilization of greywater, etc.
- Smart Infrastructure adopts modern and fast construction practices like usage of AAC blocks, hollow concrete blocks or fly-ash bricks instead of traditional clay bricks, modern facade systems using smart glass, BIPV, and smart manholes.
- Smart Technology monitors the leakages in the water distribution system of the city through SCADA, high-speed public transportation, etc.
- Smart healthcare focuses on using mobile and electronic technology for better diagnosis of the disease, improved treatment of the patients, and enhanced quality of lives.
Smart Citizen is educated and technology aware citizens who actively participate in the policy-making through modern technology.
Smart City Ecosystem
- Tier I Phase
Tier I phase comprise installing capability or infrastructure like public wifi, mobile app, management system.
- Tier II Phase
This phase involves the deployment of augmented services on primary services. Examples cover payment system integrated to the services offered nationwide.
- Tier III Phase
The defining characteristic of this tier is the development of a digital ecosystem in and around the city’s digital infrastructure, with the result that new products, services, businesses, and government revenue opportunities are created on the smart city platform. Examples include smart streetlighting that includes sensors and wifi.
Smart Governance segment accounts for 20.93% share in the smart city ecosystem. Similarly, smart energy segment holds 16.65% share; smart healthcare segment comprises 15.26% share.
Smart building and smart infrastructure combined represent 23.93% share. Smart security is the critical and most concerned segment representing 14.11% share of the holistic smart city. Likewise, smart transportation makes up 9.09% share.
- Financing risk
Financial risks comprise risks related to funding issues in the middle of the project that may jeopardize project success and could lead to a huge financial crisis to the economy. One of the major financial risks is the initial funding to build a smart city.
The second financial risk is the return on the money invested to support operating activities. Even if the accumulates enough money for the project, failing to consider the money needed to support the operation in the long-run will have a debilitating impact on the overall infrastructure. Private investors will not flood money if they do not see the proof of monetization and it becomes burdensome for the government to invest trillions of money into the project.
- Technical risk
These are the risks associated with technology selection and deployment. Such risks could range from geographical obstacles of network coverage, discontinued technology, to a questionable technology selection.
Geographical obstacles occur when cities want to provide indoor coverage in a flat area with heavy trees, or when cities want to use wireless broadband technology to provide internet services in an area with sparse population.
Discontinued technology often occurs when a network equipment vendor is out of business or it could further appear because of the stagnated technological cycle that forces the city to upgrade to the latest innovation.
A wrong technology choice can manifest in several ways such as the inability for a chosen technology to support users’ needs or a lack of scalability or technology upgrade to support increased bandwidth demand, wider area coverage or future services.
Top Market Opportunities
Smart street light sensors and water meter sensors are the beginning building blocks that major cities will be upgrading first. Cities will need service providers for network connection, network access, technology platform, and platform monetization. Globally, there are more than 2000 cities and 27% of those Greenfield cities are viable to be transformed into smart cities.
Considering the investment put to build smart cities in Singapore, New York, Tokyo, and London, each of them will invest more than USD 1 billion on smart city planning. Furthermore, worldwide spending on smart cities planning will reach USD 95.8 billion by the end of 2019.
There is a market opportunity of almost USD 100 billion a year that many players can tap into. The biggest opportunities converge to those providing sensors, network devices, internet, cloud storage, application developers, and software providers.
Smart Move Newcastle: Intelligent Mobility, Energy and Data is a smart city project in New South Wales in Australia aiming to deliver smart transport, smart energy, digital infrastructure network equipped with laser-enabled roadside poles, solar and battery electric vehicle charging points, smart bus stops, and smart parking. The total cost of the project is USD 13.52 million.
Companies have a huge market opportunity to build devices such as networking devices, lightings, sensors, cameras, etc. that are smart in functionality.
As connectivity is the backbone for any smart city to connect billions of devices, the network provides can leverage the opportunity by investing in the digital infrastructure supporting the upcoming 5G technology.
According to the World Bank analysis of 750 cities, 72% of the cities analyzed outpaced the growth than their respective national economy. Nevertheless, such cities are facing concentration of population beyond their optimum capacity thereby slowing the economic growth and causing environmental impacts.
In 2018, the number of the population residing in urban setup was just above 4 billion outnumbering the number of population, which was roughly 3 billion habituating in a rural area.
And the number of people in an urban area is expected to reach over 66% by 2025. This will raise the sustainability concern of the particular city if not managed innovatively. The smart city will help manage the limited resources while optimizing the productivity and enhancing the standard of living in such prone cities, waste management is one such solution that smart city will add on.
The Internet of Thing (IoT) connected devices installed worldwide have burgeoned from 15.41 billion in 2015 to 26.66 billion in 2019. It is further estimated to reach 75.14 billion connected devices by 2025. IOT allows devices to inter-connectedly communicate with other devices.
Machine Learning and AI have enabled IOT to function in a flawless manner. In smart cities projects carrying out globally, America tops the list with 34% share of global IOT projects.
IOT supports in all the building blocks of the smart city such as governance, healthcare, etc. Monitoring of waste bins fill levels to optimize waste collection routes is one such example of IoT deployment in a smart city.
Gartner views smart city not only as an optimized traffic pattern, parking management, and efficient lighting but also as an engagement of the citizens. Smart cities not only need to focus on technology adoption but also consider citizen experience and enhancement.
Therefore, government-citizen collaboration is transforming the fundamentals of how technology will be equipped to make life better.
Growing digital universe
Computing power, cloud storage, and networking are growing at a staggering rate. This digital universe has given rise to faster and smarter output while robotics and AI have made work precise at high speeds.
The digital universe is the key enabler for IoT which in turn is the growth driver of a smart city. By 2020, there will be 212 billion connected digital devices in our universe.
These devices connect with each other and exchange information in a flaw-less manner.
Cities generate huge amounts of data from multiple sources such as cameras, sensors, mobile devices, and digital forms. This data can be analyzed to provide a better understanding of the root causes of challenges, and insights into how to enhance city operations.
- Lack of infrastructure to support citywide smart projects
Smart projects will not always appear as ‘Greenfields’. Such projects need to modify and update the existing public infrastructure in anticipation of population increases and be able to adapt accordingly with greater resilience.
Making up such type of legacy system needs intelligence and planning so as to minimize project cost and time. Implausible urban designs will restrain the project completion resulting in billions of loss to the state or city. For Greenfields, acquiring land in bulk will narrow down the available budget allocated for the project.
- Lack of resources to fund smart technology
Transforming a city into a smart city is not every city’s cup of tea. It costs billions of dollars to set up and operate a full-fledged smart city. Seeking investing partners both from public and private sources will be the key to the success of the pilot project.
Investors generally prefer projects that yield long-term returns. The short-term technology-related projects would be out of their remit and therefore could prove to be a restraining factor to the smart projects.
Collaborating between both funding, government grants, and financing, capital or debt might also sometime create cynicism.
- Data Security
Smart Cities will generate massive data which is specific to citizens and it is the fundamental right of a citizen to maintain privacy. However, people have been skeptic about whether their data is adequately maintained private.
To prevent such skeptic and maintain an ecosystem, the companies have a key challenge to maintain adequate trust and integrity across the inherent technology that fuels the smart cities.
When devices get interconnected, it could be difficult to securely manage data due to vast connections and information flow. Attacks from unauthorized sources would happen while data transfer from one source to another source. As most of the data will personal information of citizens, there would be a vulnerability in the form of cyber-attack.
- Lack of standards
Standardizing devices among government bodies, citizens, and vendors will be a major challenge for quicker adoption of digital infrastructure. If the devices are not standardized, there will arise the issue of interoperability as the devices could be made from different vendors and use different platforms.
- Technology Adoption
Technology products have a definite short life span and it ages rapidly. If cities deploy technology widely, they need to be prepared to replace it in every few years. There is no guarantee that future elected leaders, in an effort to cut costs and appease taxpayers, won’t shortchange spending on replacement technology
- Educating citizens and employees
Managing all the technology and data will require a brand new municipal bureaucracy staffed by tech, data science, and machine learning experts. Cities will either need to raise the funds to pay a tech staff or outsource much of their smart cities to private companies.
IoT creates unique, user-centric experiences while also improving efficiency and sustainability in communities. The convergence of IoT with AI has also offered strong motivation for cities to evolve.
Adaptive streetlights or traffic lights are a good example of this; they depend on IoT in lights (and cars) and then AI to decide when and how the lights function. This can have benefits such as improved safety, improved traffic management, and energy savings.
IoT in Smart Cities captures 23% of the USD 400 billion markets. Nearly half of the Smart City projects (45%) are held in Europe, while the Americas lead in the area of Connected Health, with 55% of global projects currently undergoing. The Americas are leading the world in Connected Car IoT projects as well, with 54% of them worldwide. There will be 80 billion IOT connected devices by 2025.
Smart Cities will have a vast amount of accumulated data from interconnected devices to records detailing public service usage, to data about physical infrastructure. Additionally, private sector city partners will have data available from various endeavors. Combining these public and private data streams can be hugely beneficial and are essential to Smart City design.
It helps cities obtain valuable insights from the large volume of data collected through various devices, including IoT devices. For example, identifying and obtaining valuable information from large volumes of weather data can be beneficial in terms of agricultural development, while weather data analysis can also help inform people in advance about possible hazardous conditions such as floods or extremely hot weather.
It offers a cost-effective storage platform on which Smart City applications and services can be stored and be easily accessed. Cloud horizontally integrates the data silos that are created by city applications, such as traffic and waste management, and weather and city transport information. These applications exchange data with one another to improve customer service, streamline Smart City processes.
Blockchain is also emerging as an innovative technology for Smart Cities, providing a viable alternative that eliminates transactional intermediaries, thereby lowering operational costs. In Singapore, for instance, there is a wider application of blockchain in various government offices to pool the data at centralized storage and accessible by every accessed department and its employees.
Unlike, conventional data and transaction storage, blockchain is almost impossible to spy because of its sophisticated operation. Each transaction is trusted and approved by all other transactions that happen in the blockchain and whenever a Trojan or malware is sent to break or access the data by hackers it has to pass through millions of blocks and millions of approvals.
- Regulatory trend in Asia-Pacific Market
The government emphasizes that the smart city concept should be human-centered, practical and demand-driven, adopting a bottom-up or citizen-led approach in smart city development.
The sector was led by Ministry of Housing and Urban-Rural Development (MOHURD) MOHURD, which in 2013 designated 193 official smart city project sites, eligible to USD 14.56 billion (100 billion RMB) of funding.
Aiming to coordinate the smart city development work among different ministries and agencies, the National Development and Reform Commission (NDRC) and seven other ministries jointly issued a strategic policy document in September 2014.
China has 50% of the total 1000 smart cities under construction.
India is in the nascent stages of developing smart cities across the country. Some of these policies that are already in place include India’s Open Data Policy and India’s data protection standards under section 43A of the ITA.
The Indian government has announced significant plans to build digital infrastructure with an investment of USD 16.41 billion to build digital infrastructure.
- Industry Association
Association and industry policymakers are responsible for proposing standards and identifying opportunities for various players to work in a holistic way on a compatible platform.
Industry verticals that cover hardware providers, application and platform providers, service providers, and network providers have equal opportunity to leverage in the Indian smart city projects.
E2PO is a multi-agency committee led various government bodies to integrate smart city projects.
The Smart Nation program in Singapore was launched in 2014. The program is being driven by the Infocomm Development Authority (IDA) of Singapore, through which Singapore seeks to harness ICT, networks, and data to support improved livelihoods, stronger communities, and creation of new opportunities for its residents.
Infocomm@SeaPort program is a collaboration between the Infocomm Development Authority of Singapore (IDA) and the Maritime and Port Authority of Singapore (MPA) seeking to enhance competitiveness and increase productivity in the air cargo logistics sector through Infocomm.
A number of co-creating solutions toward smart city adopted by the Government include:
- Development of Mobile Apps to facilitate communication between the public and the providers of public services.
- Adopt measure for smart mobility to create a more seamless transport experience and providing greater access to real-time transport information so that citizens can better plan their journeys.
- Smart technologies are also being introduced to the housing estates.
- Towards achieving the Smart Nation vision the government has also promoted the use of open data. In 2015 the Department of Statistics has made a vast amount of data available (across multiple themes say transport, Infocomm, population, etc.) for free to the public in order to encourage innovation and facilitate the Smart Nation.
The Smart Seoul 2015 aims to create a ‘Seoul Data Mart’, which will be an open platform that makes public information available for data processing.
Furthermore, Seoul has opened the Seoul Open Data Plaza, an online channel to share and provide citizens with all of Seoul’s public data, such as real-time bus operation schedules, subway schedules, non-smoking areas, locations of public Wi-Fi services, shoeshine shops, and facilities for disabled people, and the information registered in Seoul Open Data Plaza is provided in the open API format.
- Regulatory trend in Europe
The Directorate-General for Communications Networks, Content and Technology (DG CONNECT) has funded Smart City projects through 7th Framework Programme (FP7) projects and the ICT-Policy Support Programme (PSP), which is part of CIP; it has also worked together with the Directorate General for Research & Innovation (DG RTD) and the Directorate-General for Energy (DG ENER) on cross-cutting PPPs including the European Green Cars Initiative and the Energy-Efficient Buildings Programme.
The EC has provided policy support through particular policies of the Directorate-General for Mobility and Transport (DG MOVE) and via several communications that specifically refer to the role of Smart Cities.
The General Data Protection Regulation went into effect in Europe in May of 2018.
The Smart London Plan incorporates the existing open data platform called ‘London DataStore’. The rules and guidelines for this platform are defined by the Greater London Authority, which includes working with public and private sector organisations to create, maintain and utilise it, enabling common data standards, identify and prioritise which data are needed to address London’s growth challenges, establish a Smart London Borough Partnership to encourage boroughs to free up London’s local level data.
Also, privacy is protected and there is transparent use of data – to ensure data use is managed in the best interests of the public rather than private enterprise.
- Regulatory trend in North America
Joint Statement and MoU between the Federal Communications Commission (FCC) and the Food and Drug Administration (FDA) on broadband and wireless-enabled medical devices
Policies and Regulations
As per the Local Law 11 of 2012, each City entity must identify and ultimately publish all of its digital public data for citywide aggregation and publication by 2018. In adherence to this law, there exists an NYC Open Data Plan which requires annual data updation.
Ontario’s public sector privacy and access laws create a privacy protection scheme which institutions and their agents must follow, including: limits on the collection, use and disclosure of personal information, requirements for notice of collection, standards for security, retention, and secure disposal, oversight mechanism – privacy complaints, investigations, orders, recommendations, and public reporting
- Regulatory trend in Dubai, United Arab Emirates
The Dubai Smart City strategy was launched as part of the Dubai Plan 2021 vision, in 2015. Dubai Plan 2021 describes the future of Dubai evolving through holistic and complementary perspectives, starting with the people. The Dubai Data portal would provide a gateway to empower relevant stakeholders to understand the nuances of the city and pursue questions that will result in the greatest impact from the city’s data.
The platform will be based on current data and existing services, initiatives, and networks to identify opportunities for a smart city. The Smart City Plan also includes a framework for aligning districts of Dubai with the Smart City vision and dimensions.
The Smart Dubai strategy is envisioned to be completed by the year 2020 and currently is ongoing.
Policies and Regulations
The Smart City Plan is being driven by the Dubai Smart City Office. Also, an open data law called Dubai Open Data Law was issued to complete the legislative framework for transforming Dubai into a Smart City.
Market Size and Forecast
The global smart cities market size reached USD 1085.04 billion in 2018 from USD 988.2 billion in the previous year. In 2019, the market value is expected to reach USD 1191.38 billion growing at a CAGR of 9.8%.
The North American market for smart cities was valued USD 185 billion in 2018. Similarly, the European smart cities market was worth USD 235 billion during the same period.
Asia-Pacific smart cities market significantly doubled to USD 100 billion in 2018 from the previous year. Latin America and MEA region saw slow growth to reach USD 50 billion in market opportunity.
The global market for a smart city is projected to grow from USD 900 billion in 2016 to USD 2 trillion in 2025 growing at a CAGR of 9.8%.
Smart city market in North America is predicted to reach USD 419 billion by 2023 from USD 186.5 billion in 2018 at a CAGR of 16.3% for the period of 2018-23. Within the smart city, the smart energy segment of North America is expected to grow from USD 72.2 billion in 2018 to USD 139.4 billion in 2023 at a CAGR of 14.1% for the period of 2018-23.
Likewise, the smart governance segment is estimated to reach USD 84.03 billion in 2023 from USD 39.49 billion in 2018. Also, smart transport segment is likely to reach USD 42.71 billion by 2023 from USD 20.07 billion in 2018. Meanwhile, the smart citizen segment will see a robust growth rate to double the market value by 2023 from USD 2.91 billion in 2018.
Asia Pacific smart cities market is probably to amount USD 600 billion by 2025 from USD 100 billion in 2018. China’s smart city projects will reach USD 320 billion by 2025, growing at a CAGR of 10%.
By segment, smart services, which accounts for 30% share, is expected to lead Asia’s addressable market by 2025, followed by smart governance with 23% share, smart healthcare will hold 15% share, smart connectivity will hold 13% share, and smart automation and smart mobility combined will hold 19% share of total smart cities segment.
China invested USD 72.76 billion (CNY 500bn) in its national smart city program during the 12th Five-Year Plan period (2011–2015), leading to the launch of over 90 pilot smart cities. By 2018, there were 500 smart cities at various stages of development with an estimated market size of USD 94.58 billion (CNY 650bn).
Singapore is undergoing digital transformation to sustain the country’s economic growth and competitiveness, even as rapid digitalization poses disruption risks to businesses, industries and economies.
In 2014, it launched the “Smart Nation” initiative to take advantage of the various uses of technology to build a cohesive nation and maintain its competitiveness among the world’s top cities. Singapore’s National Research Foundation (NRF) launched a national program on AI in 2017 with a USD 110.52 million (SGD 150m) investment over five years, focusing on applications in finance, city management solutions and healthcare.
European smart city market size was valued USD 225 billion in 2018 and is forecasted to reach USD 320 billion by 2022.
European spending on smart city initiative related technologies reached USD 19 billion in 2018 and is estimated to reach USD 31 billion by 2021 with an expected 2017–2021 CAGR of 21.1%. Western European countries represented more than 90% of European spending, reaching USD 16.9 billion in 2018.
Smart City initiatives will attract technology investments of more than USD 158 billion in 2022. Asia-Pacific region will account for nearly 42% of global spending, followed by the Americas (33%), and Europe, Middle East, and Africa (EMEA) (25%).
5G network technologies will offer faster connections, more reliability and greater capacity at lower costs, to enable cities to inter-connect their infrastructure, devices, and people. Moreover, compared to the current 4G standard, 5G offers the capacity to enable additional smart city capabilities, and it will be a prerequisite to enable various high-bandwidth and low-latency smart city applications.
For example, 5G will support the wide-scale deployment of connected vehicles communicating with traffic signals to reduce traffic as well as the deployment of large numbers of sensors to measure in real time the safety of infrastructures such as water pipes, highways, and buildings.
North America is the first to launch commercial 5G services. On October 1, 2018, Verizon launched a 5G fixed wireless internet service in four cities and on December 21, 2018, AT&T launched a mobile 5G service in 12 cities. T-Mobile and Sprint have announced plans to launch 5G during the first half of 2019.
Distribution Chain Analysis
Smart city integrators are facilitated to provide various sectors of the smart city with pre-packaged platforms thereby providing a unified, holistic and end-to-end integration of multiple sectors Players: IBM, Accenture, Siemens
Smart city network providers provide collaborative networks, data analytics, and enterprise working solutions that connect people, assets, systems, and products by leveraging on their networking and M2M capabilities.
Key Players: Cisco, Verizon, Ericsson, AT&T
Smart city product vendors provide smart meters and distribution devices (e.g., automated switches, controllers for capacitor banks and voltage regulators) that operate as the main nodes of connectivity.
Key Players: Eaton, Honeywell, ABB, Schneider Electric, Siemens
Smart city managed service providers offer to monitor, complete management, compliance monitoring, and on-site consulting. These services are provided either in-house, co-managed, or are completely outsourced (third party providers)
Key Players: IBM, Serco, SAIC, Infosys
Companies operating in various segments of smart city are facing increasing competition. In the USA, for instance, multiple licensees, who provide wireless services on the cellular, PCS, Advanced Wireless Services, 700 MHz and other spectrum bands, may operate in any of the U.S. service areas, which results in the potential presence of multiple competitors.
- Ability to provide a broad range of networking and communications products and services
- Product performance
- Ability to introduce new products,
- Ability to reduce production costs
- Ability to provide value-added features such as security, reliability, and investment protection
- Disruptive technology shifts and new business models
Key Market Players
- AT&T, Inc.
AT&T Inc. was incorporated in the USA in 1983. The Company is a provides telecommunications, media and technology services globally. The Company operates through four segments: Communication segment, WarnerMedia segment, Latin America segment and Xandr segment.
The Communications segment provides wireless and wireline telecom, video and broadband services to consumers. Mobility business unit provides nationwide wireless services to consumers and wholesale and resale wireless subscribers by utilizing its network to provide voice and data services, including high-speed Internet over wireless devices.
AT&T operates worldwide in the telecommunications, media and technology segment.
The company’s cash from operation in 2018 was USD 170.75 billion compared to USD 160.55 billion in 2017. 84.7 % of the total operating cash was generated from the company’s communication segment. Communication segment offers services such as mobility, IP based services, and the internet. The Latin America segment accounted for nearly 4% of its operating income in 2018.
AT & T has invested more than USD 140 billion in the network between 2014 and 2018, including capital investments and acquisitions of spectrum and wireless operations. In 2019, the company started building a premier gigabit network called FirstNet, combined with fiber and 5G deployments. The company’s market capitalization recorded in June 2019 was USD 245.79 billion.
- Cisco Systems Inc.
Cisco Systems, Inc. (Cisco) was incorporated in 1984 in America engaging in designing and selling a range of technologies across networking, security, collaboration, applications, and the cloud. The Company’s product and technologies include infrastructure platforms, applications, security, and other products.
Cisco’s revenue during 2016-18 remained to fluctuate. In 2017, the revenue fell by 2.4% to record USD 48 billion. But in 2018, the revenue rose by the same rate to reach USD 49.3 billion. Building infrastructure platform accounted for 57% of Cisco’s revenue. America is the dominant market for Cisco’s business contributing 59% revenue share.
Revenue from data security was 5% of its total revenue. Infrastructure Platforms consist of networking technologies of switching, routing, data center products, and wireless.
The Security product category primarily includes unified threat management products, advanced threat security products, and web security products. American market accounted for 57.5% of Cisco’s revenue in 2018. The company’s market cap as of June 2019 was USD 245.29 billion.
- General Electric
General Electric Company (GE) was incorporated in 1892 and is a global digital industrial company. The Company’s segments include Power, Renewable Energy, Oil & Gas, Aviation, Healthcare, Transportation, Energy Connections & Lighting, and Capital.
The Power segment serves power generation, industrial, government and other customers around the world with products and services related to energy production.
The Renewable Energy segment offers renewable power sources. The segment offers solutions from onshore and offshore wind, hydro and low carbon technologies.
The Oil & Gas segment serves all sectors of the oil and gas industry, from drilling, completion, production and oil field operations, to transportation through liquefied natural gas (LNG) and pipelines.
The Aviation segment designs and produces commercial and military aircraft engines, integrated digital components, electric power, and mechanical aircraft systems.
The Healthcare segment provides healthcare technologies in medical imaging, digital solutions, patient monitoring, and diagnostics, drug discovery, biopharmaceutical manufacturing technologies and performance improvement solutions.
The Transportation segment is a supplier to the railroad, mining, marine, stationary power and drilling industries.
In 2018, the power segment generated USD 27.3 billion in revenue; Renewable Energy segment made USD 9.5 billion revenue; Aviation segment recorded USD 30.56 billion in revenue; Oil & Gas segment made USD 22.86 billion in revenue; Healthcare segment led USD 19.78 billion revenue, and Transportation segment produced USD 3.89 billion in revenue.
43% of healthcare revenue came from the US market in 2018. Similarly, 57% of its transportation revenue was generated from the US market segment. It had a market cap of USD 88.16 billion in June 2019.
Ericsson is a Swedish company established in 1876. Ericsson’s business segments include i)networks, which comprise all-radio access technologies, hardware, software, and related services, ii)Digital Services, which include Digital Business Support System, Operational Support System, and Cloud Communication.
Its digital services are 5G standardized. iii) Managed Services that constitute Network Design and Optimization and Application Development and Maintenance. Ericsson has achieved the first commercial launch of 5G in Europe in 2018 with Swisscom.
Four of Ericsson’s first ten commercial 5G contracts are in Europe where industrial-use cases are expected to play an increasingly important role from 2020. Ericsson made USD 22.48 billion in sales in 2018. From the previous year, the sales figure rose by 3%.
Europen and Latin American market accounted for 28.59 % of its total business earning followed by North America, which held 26.78% revenue share in 2018. Furthermore, Networks segments represent 67.72% of its business. It had a market cap of USD 31.49 billion in June 2019.
- Microsoft Corporation
The company operates in three business segments: Productivity and Business Processes, Intelligent Cloud, and More Personal Computing.
Microsoft made the total revenue of USD 110.36 billion in 2018 compared to USD 96.57 billion in revenue in the previous year. Its server products include the server platform, database, business intelligence, storage, management and operations, virtualization, service-oriented architecture platform, security, and identity software.
Its intelligent cloud segment accounted for 29.19% of the total operating revenue in 2018. It had the market cap of USD 1.06 trillion as of July 2019.
Nowadays, people are seeking smartness in every aspect of their life. Smartness is not just a complementary solution along with the traditional approach.
It is about creating an impact and delivering a better quality of life. The abundance of data coupled with technological interferences will certainly make the life easier neglecting the cost associated with this technology.
To make a city fully smart, various infrastructure and applications to integrate health, mobility, transportation, governance, safety, and environment into smartness are required.
Statistically, the average cost to build a smart city roughly estimates USD 1 billion on smart city planning. Furthermore, worldwide spending on smart cities planning will reach USD 95.8 billion by the end of 2019.
Financially, it shows a huge market opportunity of almost USD 100 billion a year that many players can tap into. The biggest opportunities converge to those providing sensors, network devices, internet, cloud storage, application developers, and software providers.