IoT Sales to Grow 29% in 2015

New report underscores fast-paced growth of IoT market, as demand for network communications, sensing, and control functions in wearable devices drives market growth this year.

In an update to its 2015 IC Market Drivers Report, industry researcher IC Insights said it expects sales of electronic components needed for Internet of Things applications will grow 29% this year to $62.4 billion. This follows an increase of 21% last year to roughly $48.4 billion—growth that has been largely due to increases in wearable devices and systems, the researcher said.

IC Insights raised its projection for IoT-related growth in 2015 after the launch of Apple’s first smart watches this spring. And although the long-term outlook for the success of the Apple watch and similar products remains to be seen, the researchers say the short-term opportunities have provided a major boost to semiconductor unit shipments to the wearable IoT category.

“Total IoT-related revenues (excluding Internet servers, network infrastructure, and cloud-computing systems) are now expected to rise by a compound annual growth rate (CAGR) of 21.1% from 2013 to 2018, reaching $104.1 billion at the end of the forecast period,” the researches said, emphasizing demand for integrated circuits, sensors, and related components in the wearable IoT category.

New connections to the Internet continue to greatly outpace the addition of human users to the Internet, driving demand for embedded systems, sensors, instruments, vehicles, controllers, cameras, wearable electronics and other electronics-industry related items. (See the figure) IC Insights explains that IoT connections grew to 410 million in 2014, a 45% increase over 2013.

“The total installed base of connected things on the IoT is forecast to reach 13.2 billion units worldwide in 2015 versus about 3.1 billion humans using computers, cellphones, and other system applications over the Internet this year, based on IC Insights’ updated projections,” the researcher said. “By the end of this decade, more than 25 billion systems and objects are expected to be attached to the Internet versus about 4.4 billion human users.”

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