IoT's growth picture bright despite pandemic and chip, supply chain concerns

IoT (Pixabay)
Growth is ahead in a couple of key areas -- IoT roaming and the value that IoT can create in different settings.

Kaleido Intelligence is forecasting 30% average annual growth in cellular IoT roaming traffic between 2020 and 2026, the latest sign that the pandemic and ongoing supply chain challenges are not keeping different segments of the IoT ecosystem from finally starting to achieve long-awaited growth--at least for now.

The prediction is based on Kaleido’s Roaming Data Hub for the second half of 2021. The firm said that while cellular IoT module shipments “saw a relatively tepid 2020, this year has seen strong demand for modules, with several vendors reporting demand in smart metering, industrial and healthcare applications.”

While this year has been good, Kaleido believes the ongoing chip shortage could be a factor in constraining growth over the next three years. Still, it expects overall cellular IoT roaming connections to reach over 850 million in 2025, with IoT roaming traffic reaching nearly 650 Petabytes in 2026, up from 174 Petabytes in 2021.

Kaleido’s forecast follows a recent McKinsey & Co. report called the pandemic’s impact a “catalyst for the deployment of IoT solutions in specific areas as the world grapples with managing the pandemic and enabling a faster and safer return.”

McKinsey estimated that IoT could enable $5.5 trillion to $12.6 trillion in value globally by 2030, which includes the value captured by consumers and customers of IoT products and services. The McKinsey report explained that IoT’s economic-value potential is concentrated in certain settings (types of physical environments where IoT is deployed), and that factory settings will account for 26% of economic value from IoT in 2030. The human-health setting could account for up to 14%.

Meanwhile, in terms of applications, business-to-business apps will account for 65% of the total value figure by 2030, with business-to-consumer apps accounting for the rest, but likely growing in share as more IoT solutions are deployed inside consumer home. The report also noted that China is becoming a global IoT force as not only a manufacturing hub and technology supplier but also an end market for value creation.

Like Kaleido, McKinsey said that hurdles to IoT’s growth still remain in place, with lack of interoperability, installation challenges and security and privacy issues being among the headwinds against future growth.

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