The global Internet of Things (IoT) market is expected to be worth $1.1 trillion (£821 billion) in revenue by 2025 as market value shifts from connectivity to platforms, applications and services.
This is according to new data from GSMA Intelligence. The research also suggested that by that point, there will be more than 25 billion IoT connections (cellular and non-cellular), which will be driven largely by growth in the industrial IoT market.
Although connectivity revenue is expected to grow over the period, GSMA Intelligence predicted that it will only account for five per cent of the total IoT revenue by 2025, thereby highlighting the need for operators to expand their capabilities beyond connectivity in order to capture a greater share of market value.
According to the researchers, this challenge is already being addressed by a number of operators, which are creating dedicated IoT business units and service lines.
GSMA Intelligence predicted that the total number of IoT connections (both cellular and non-cellular) globally will reach 25.2 billion in 2025, up from 6.3 billion in 2016.
The industrial segment is expected to account for more than half of the total connections by that point (13.8 billion), while the number of IoT connections in the consumer segment will reach 11.4 billion, driven by developments in the smart home market.
Sylwia Kechiche, principal analyst of IoT at GSMA Intelligence, said: “As the number of connected consumer devices and industrial machines grow rapidly, the IoT ecosystem will evolve to become a trillion-dollar market over the course of the next decade.”
However, she warned that the IoT revenue opportunity is “shifting away from simply connecting devices to addressing specific sectors with tailored solutions”, meaning that in order to be successful, firms will need to adapt their business models in line with these market trends.