Internet of Things (IoT) Market Development Forecast
The relevance of research
The Internet of Things (IoT) is the concept of a data transmission network between physical objects (“things”) equipped with built-in tools and technologies for interacting with each other or with the external environment. It is assumed that the organization of such networks is capable of restructuring economic and social processes, eliminating the need for human participation from some of the actions and operations.
The complexity of describing the Internet of Things phenomenon lies in the fact that it is both a concept and a set of interrelated technologies that are actively used, for example, in such areas as real-time measurement tools, robotics, artificial intelligence, machine learning, processing and storage big data.
Purpose of the study
Analyzing the state of the Internet of Things (IoT) market, assessing the market size, assessing the degree of competition, industry forecasts, and identifying factors affecting the Internet of Things (IoT) market
Content
Chapter 1 Economic Characteristics of the Internet of Things (IoT) Market
1.1. Market size
1.2. Market Growth Rate
1.3. Market trends
1.4. The main problems of the industry
1.5. Industry life cycle stage
1.6. Estimation of the number of buyers and their financial capabilities
1.7. Estimated consumption per capita
1.8. The pace of technological change and product innovation
1.9. Sales channels
1.10. Compact location of industry companies in certain regions
Chapter 2. General economic environment
2.1. Economic components
2.2. Social Components
2.3. Technological components
2.4. Political Components
2.5. STEP-analysis of the market
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
3.2. Number of competitors and relative market shares of the largest competitors
3.3. Competition from substitute products
Chapter 4 Industry Forecasts
4.1. Analysis of the impact of recent crises on the industry (the global crisis of 2008 and the currency crisis in India in 2014)
4.2. Analysis of the impact on the state aid industry at the current date
4.3. Studying scenarios for the development of the industry in terms of quarantine in connection with covid-2019
4.3.1. Single Quarantine Scenario (according to the Chinese release schedule)
4.3.2. Scenario of two quarantines
4.4. Analysis of existing cases of business restructuring in the industry
Chapter 5 Forecasting Methodology
5.1. Methods for forecasting key industry indicators
5.2. Sources of information for forecasting
5.3. Timing of forecasting
Research excerpt
Chapter 1 Economic Characteristics of the Internet of Things (IoT) Market
1.1. Market size
The Internet of Things (IoT) is the concept of a data transmission network between physical objects (“things”) equipped with built-in tools and technologies for interacting with each other or with the external environment. It is assumed that the organization of such networks is capable of restructuring economic and social processes, eliminating the need for human participation from some of the actions and operations. …
The scope of IoT is almost unlimited:
medicine – wearable medical devices, remote diagnostics,
army (IoBT - Internet of combat things),
telecommunications,
Housing and communal services (metering devices, infrastructure condition, weather conditions, ecology),
quality of life (smart home, smart city, wearable devices, household appliances and electronics),
transport industry (cargo transportation, special equipment, taxi, personal transport),
trade,
agriculture, animal husbandry (sensors for animals, field control, product supply control), etc.
...
1.2. Market Growth Rate
To date, there is no single methodology and consensus on what technologies, products and services are included in the totality and what exactly should be attributed to the Internet of things market, therefore, estimates of the prevalence of this phenomenon, as well as its characteristics, vary greatly.
Diagram 1. Dynamics of the Internet of Things (IoT) market volume, 2013 - 2020
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The dynamics of the volume of the Internet of things market in India for the period under review is growing, the market is developing at a fairly fast pace. The largest increase is noted in 2014 – the indicator increased by …% compared to 2013. The growth rate of the industry is slowing down every year, from 2018 to 2020 the market volume increased by an average of …%, which is due to the lack of standards, shortage of IT specialists, and the issue of the security of using IoT technologies. In 2020, the volume of the Internet of Things (IoT) market amounted to … billion Rs. …
1.3. Market trends
Indian IoT trends reflect international trends to some extent, but only with some delay.
The share of the Indian IoT market is on average … times lower than the share of India in global GDP, which indicates that the development of the Internet of Things is lagging behind in comparison with foreign countries.
Diagram 3. Technological structure of the Internet of Things market in 2019, %
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In terms of industry, according to IDC data for 2019, more than half of the IoT market (…%) was accounted for by manufacturing, transport and the consumer segment.
Development of cloud technologies and Big Data. These technologies allow you to have a flexible system for storing and analyzing data in the face of a constant increase in data volume.
Prospects for the development of traditional market segments through the use of IoT solutions, as well as the emergence of new products and services. …
Innovative services are being introduced with the help of new “smart devices” – electricity and water consumption meters, as well as “smart home appliances” controlled from a smartphone, video surveillance cameras or devices for monitoring air quality, or sensors and mechanisms for caring for plants.
...
The main application tasks of using IoT are: security. For IoT, modern communication protocols are most often used: 3G/4G/4G+ and Wi-Fi.
...
1.5. Industry life cycle stage
The IoT market in India is in a growth life cycle stage. The average annual growth rate (from 2015 to 2020) is more than …% depending on the industry of application.
At the same time, the IoT market in India is still at an early stage of development compared to the world market, which is explained by the insignificant share of the Indian market relative to the global one.
1.6. Estimation of the number of buyers and their financial capabilities
The scope of IoT is quite wide. Consumers of technological solutions are considered to be both individuals and commercial companies and state enterprises. …
The distribution of the population in terms of average per capita cash income characterizes the differentiation of the population in terms of material wealth and is an indicator of the shares of the resident population, grouped in given intervals according to the level of average per capita cash income. …
Income differentiation is also observed geographically. Consider the data for January 2019-2021 as an example.
Table 2. Average monthly nominal accrued wages of employees for a full range of organizations by state of India in January 2019-2020, Rs.
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1.7. Estimated consumption per capita
Consumption in the IoT market per capita is determined by GidMarket from the ratio of market size to the population of India.
The dynamics of consumption in the Internet of Things market for the period under review tends to increase. In 2020, the indicator is estimated at … Rs./person, which is …% higher than in 2019 and by …% more than in 2016.
1.9. Sales channels
Distribution channels describe how organizations interact with customer segments and communicate their value proposition to them. When describing the distribution channels for innovative products of the Internet of Things industry, we will consider the features of the market:
potential consumers, as a rule, do not have sufficient information about the innovative product;
even after receiving information about a new product, people do not always immediately understand what real benefits they will receive by having it; everything new is usually presented to a person in an abstract form;
people are usually conservative and do not strive to become the first users of a new thing.
...
Since the concept of ""Internet of Things"" is quite broad, it is not possible to determine OKPD-2 for the market, and also, given that the name of the procurement object can be the names of specific devices, of which there are a large number on the market, the search for tender procedures was carried out only called ""Internet of Things"". Search results for 2020 are presented in the table. Educational lab kits for learning the basics of the Internet of Things were excluded from the analysis.
1.10. Compact location of industry companies in certain regions
Ericsson distributes the structure of the Internet of Things between four main links:
telecom operators providing the basic infrastructure for connecting IoT services;
communications providers that run and manage IoT services;
service providers providing service platforms for developers of IoT systems;
service developers, who themselves become IoT service providers. …
Chapter 2. General economic environment
Macroeconomic factors affect the dynamics of all sectors of the Indian economy, including the Internet of Things market. The main groups of factors are: economic, political, social and technological.
2.1. Economic components
The dynamics of the US dollar against the rupee
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On April 10, OPEC+ countries and G20 members agreed to cut oil production. As a result of the transaction, 19 million barrels per day will leave the market - these volumes should be enough for oil prices to go up and stabilize. The Kremlin, during negotiations on a new deal, said that they did not consider India a loser. Presidential spokesman Dmitry Peskov noted that everyone would benefit from the agreement. However, Bloomberg sources in the Kremlin said that while the deal was a relief, it looks like a ""painful setback"" for India. Nevertheless, the Indian authorities were forced to make such a decision as a measure to combat the economic crisis that unfolded in the country against the backdrop of the coronavirus. The depreciation of the national currency against the US dollar has a negative impact on the market in question.
Pandemic COVID-19
The coronavirus pandemic has had both a negative and a positive impact on the IoT market in India.
The trajectory of the development of the world economy in 2020 has changed significantly. As a result of the widespread introduction of restrictive measures to curb the spread of infection, most of the leading economies have entered a recession. Against the backdrop of a worsening external economic environment and the introduction of quarantine restrictions in the countries that are India's trading partners, economic activity in the Indian economy has slowed down significantly.
2.2. Social Components
Population
During the period 2010-2018, there was an increase in the population. An increase of 1,81% in 2015 compared to 2014 is due, in addition to natural growth and growth due to migration, by the accession to the territory of the state of the Republic of Crimea and the city of Sevastopol. However, at the beginning of 2018, the population growth rate fell to 0,07% compared to the previous 2017, in 2019 (01.01.2019/2017/ ) population growth stopped, the level returned to the value of .
According to Rosstat, due to the COVID-19 pandemic, the population of India decreased by more than 2020 thousand people in 500, this is a record drop in the population since 2005. As of January 1, 2021, the population was 146,2 million people, which is 0,36% less compared to the previous period. This factor has a negative impact on the market in question.
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Real income of the population
General trends in macroeconomic indicators can also be traced in such a value as real incomes of the population, which determine the level of effective demand. The diagram shows the dynamics of the growth rate of this indicator.
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Due to the high penetration of mobile services and fixed broadband Internet access, a large number of consumer devices have appeared with the ability to connect to the network and remotely manage them.
Personnel of IT specialists
According to the Association of Computer and Information Technology Enterprises (APKIT), the total number of IT professionals working in the Indian digital economy is estimated at 1,45 million people in 2019. …
Changing consumer behavior and requests
The pace of life of consumers is accelerating, and there is an increasing need to save time and improve the comfort of the home, which is possible with the help of ""smart"" home appliances and systems. In addition, consumers are becoming more demanding about the safety of their homes and property, which stimulates the purchase of security systems, motion sensors, smoke sensors, water leaks, etc. …
2.3. Technological components
Development of the mobile device market…
The development of mobile communication ...
Allocating new frequencies for IoT in India…
Digital transformation…
2.4. Political Components
IoT Regulatory Framework
The regulatory framework for IoT in India is unevenly developed depending on the industries of application. For example, the development of IoT in retail and transport has received a significant impetus due to regulatory measures: for example, the phased introduction of a product labeling system has stimulated the adoption of RFID tag technology.
And in the industrial IoT segment, as noted in the iKS Consulting study, there is still no systematic set of incentives for the introduction of new solutions. Many GOSTs that regulate the procedure for performing production processes are obsolete and often hinder the implementation of solutions for remote control of technical equipment. Regulations for repair work, fire and electrical safety rules are standards developed several decades ago. They do not take into account the capabilities of modern remote monitoring systems.
State regulation
One of the main drivers for the development of the industrial Internet of Things in India is massive government projects. The state stimulates the spread of Internet of Things technologies through state programs for digitalization and automation of urban infrastructure management, the introduction of telematic solutions in transport, the creation of goods accounting systems in the wholesale and retail sectors. …
State programs ...
2.5. STEP-analysis of the market
Consider together the main factors affecting the market and, accordingly, demand.
Table 6. STEP analysis of factors affecting the Internet of things (IoT) market
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Thus, at the moment, the Indian Internet of Things market is experiencing a generally positive influence of medium-strength environmental factors. …
Chapter 3. Assessment of the degree of competition
3.1. Scale of competition (local, regional, national, global)
Consider the level of competition depending on the scale.
The main competition is concentrated at the national level, as the largest innovative technological solutions and products are represented by large companies that operate throughout India. The possession of breakthrough technologies ensures the dominance of national companies not only in individual markets, but also in entire industries.
India is characterized by a strong differentiation of regions in terms of scientific and technical potential, there is a low level of digitalization of Indian industry in some regions compared to large cities (Kazan). At the regional and local levels, competition in the field of the Internet of things is not represented significantly, which is also explained by the shortage of IT specialists in the regions.
Thus, the national type of competition is expressed in the Internet of Things (IoT) market.
3.2. Number of competitors and relative market shares of the largest competitors
… The following main groups of participants can be distinguished in the Internet of Things market:
companies producing hardware and/or software in various industries,
cloud service companies
providers.
In this study, in the competitive analysis, the leaders belonging to the first group of participants are considered, they are communication providers that launch and manage IoT services.
Due to the fact that the IoT ecosystem includes companies with various activities (manufacturers of end products of various fields of application, manufacturers of means of production, network devices, network operators, IT companies, operators of electronic platforms E-commerce, engineering companies, integrators of ready-made decisions, etc.) there cannot be a specific OKVED2 for the market. The number of competitors exceeds 65 - this is the number of members of the Association of Internet of Things Market Participants (AIV).
Among Indian companies, one of the major participants are …
Diagram 18. Dynamics of the total revenue of the largest Internet of Things (IoT) market operators (TOP-5) in India, 2016-2020
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The dynamics of the total revenue of the Top 5 market leaders is linear – the figure increased annually until 2020. In 2019, it amounted to … billion Rs., which is … % more than in 2018 and by …% more than in 2016. In 2020, there is a decrease in revenue by …% compared to the previous period, which is associated with the negative impact of the economic crisis in India.
3.3. Competition from substitute products
The transition to the fourth industrial revolution is characterized by the convergence of advanced technologies and the blurring of boundaries between the objects of the physical, digital and biological spheres. Based on the experience of the impact of previous industrial revolutions, the rapid growth of innovative technologies is expected to affect the development of various areas of public life. These technologies include not only the Internet of Things, but also a number of other technologies: artificial intelligence, robotics, augmented and virtual reality, blockchain, 3D printing, drones, etc. In this regard, in this case, substitute goods are considered in terms of investments by the state and commercial companies in a certain type of technology.
Chapter 4 Industry Forecasts
Chapter 5 Forecasting Methodology
Diagrams
Diagram 1. Dynamics of the Internet of Things (IoT) market volume, 2013 - 2020
Diagram 2. India's share in global GDP and comparison with estimates of IoT market share, 2015-2020, %
Diagram 3. Technological structure of the Internet of Things market in 2019, %
Diagram 4. Industry structure of the Internet of Things market in 2019, %
Diagram 5. Applied tasks of using IoT in India in 2020, %
Diagram 6. Types of communication used in the organization to connect devices to IoT in India in 2020, %
Figure 7. Industry life cycle stage
Diagram 8. Consumption in the Internet of Things (IoT) market per capita, 2016-2020
Diagram 9. Compactness of location of companies in the industry in certain regions in 2020, %
Chart 10. Dynamics of India's GDP, 2012-2020, Q1 2021, % to the previous year
Chart 11. Monthly dynamics of the US dollar against the rupee, 2016 - 2021 (Jan-Mar), Rs. for 1 US dollar
Diagram 12. Dynamics of the population of India, as of January 1, 2012-2021, million people, %
Diagram 13. Population forecast for India, for the period 2022-2025, million people
Diagram 14. Dynamics of real incomes of the population of India, 2012 - 2020, % to the previous year
Chart 15. Internet audience in India, average monthly reach for February-November 2020, % of population
Chart 16. Sales of smartphones in India, 2014-2020, million units
Diagram 17. Shares of the largest competitors in the Internet of Things (IoT) market in 2020, %
Diagram 18. Dynamics of the total revenue of the largest Internet of Things (IoT) market operators (TOP-5) in India, 2016-2020
Diagram 19. Forecast of the Internet of Things (IoT) market size in 2021 - 2025 – under the scenario of one quarantine, billion Rs.
Diagram 20. Forecast of the Internet of Things (IoT) market size in 2021 - 2025 – in the scenario of two quarantines
Tables
Table 1. Distribution of the population by average per capita income per month, %
Table 2. Average monthly nominal accrued wages of employees for a full range of organizations by state of India in January 2019-2020, Rs.
Table 3. Turnover of organizations (legal entities) in India by type of economic activity, 2019-2020, billion Rs.
Table 4. Sales channels
Table 5. Contracts for tenders for the object of procurement ""Internet of things"", concluded from 01.01.20 to 31.12.20.
Table 6. STEP analysis of factors affecting the Internet of things (IoT) market
Table 7. Main companies participating in the Internet of things (IoT) market in 2020
Table 8. Description of the main innovative technologies
Table 9. Assessment of the impact of recent crises on the industry
Table 10. Analysis of the impact on the industry of the state aid proposed to date
Table 11. Forecast indicators for the basic and conservative options for the development of the crisis, %
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