Internet of Things (IoT) market to reach $103.6 billion worldwide by 2018, analysts predict

SCOTTSDALE, Ariz., 26 Jan. 2015. Global sales from the Internet of Things (IoT) portion of electronic systems will grow from $57.7 billion this year to $103.6 billion in 2018, which represents a compound annual growth rate (CAGR) of 21 percent in the five years between 2013 and 2018, industry analysts say.

Worldwide sales from IoT functions for Internet communications and sensor subsystems totaled $48.3 billion last year, and will grow 19 percent in 2015 to $57.7 billion, predict analysts at market researcher IC Insights Inc. in Scottsdale, Ariz.

By 2018, the market value of IoT subsystems in equipment and Internet-connected things should reach $103.6 billion worldwide, IC Insights analysts say in the company's 2015 edition of IC Market Drivers -- A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits.

IoT functionality designed into equipment and web-enabled objects will become a pivotal factor in the sale of nearly half of all end-use systems by the end of this decade as connections to the Internet of Things becomes more common and expected by consumers and businesses, analysts say.

Related: DARPA trying to re-invent Internet search ... after inventing the Web in the first place

Since 2006 there have been more embedded systems, industrial equipment, sensor devices, instruments, meters, cameras, animals, and other objects connected to the Internet than humans using computers, smart phones, and other electronics for information technology, IC Insights experts say.

More than a half-dozen initiatives have been launched to create market standards for IoT. Web-connected things should account for 85 percent of nearly 29.5 billion Internet connections worldwide by 2020, analysts say.

The report forecasts that IoT-related semiconductor sales will total $5.6 billion this year and grow to $11.5 billion in 2018. About 65 percent of the projected 2018 IoT semiconductor revenues will come from integrated circuits (ICs), and 35 percent from optical, sensors and actuators, and discretes (O-S-D), analysts say.

The largest IoT semiconductor market segment will continue to be connected cities, including smart electric grids, roads and street lights, and other public infrastructure applications through the forecast period, analysts say.

Related: Article Pentagon's 'Internet in space' appears headed for trouble

Through 2018 the second-largest semiconductor IoT category -- the industrial Internet -- nearly will catch up with the connected cities group because of high growth in factories, logistics, and medical systems applications.

Semiconductor revenues from connected homes will push past $1 billion in 2018 with a CAGR of 32.8 percent from just $275 million in 2013. Connected passenger cars and other automotive systems will reach $1.5 billion in 2018, a CAGR of 43.8 percent. Semiconductor sales for wearable systems that connect to the Internet are projected to climb by a CAGR of 46.9 percent to $528 million in 2018 from about $76 million in 2013.

The proliferation of the Internet of Things will expand the use of cloud computing and web servers as well as require upgrades to the overall Internet infrastructure to handle growing amounts of data coming from attached systems and things by 2020.

The IC Market Drivers report is two parts: the IC industry by system type, by region, and by IC product type through 2018; and key existing and emerging end-use applications that will support the IC industry through 2018.

For more information contact IC Insights online at www.icinsights.com.