New research sees Internet of Things (IoT) spending growing by nearly 16% by 2020 driven by hardware investments, primarily by manufacturers.
The Journal reported on the release of the “Worldwide Semiannual Internet of Things Spending Guide” by International Data Corp.(IDC).
The IDC report found that IoT spending will reach $1.29 trillion worldwide by 2020, representing a 15.6% compound annual growth rate between 2015 and 2020.
As improvements in sensor technology continue, IDC sees much of IoT spending going towards hardware, which comprises the largest spending category throughout the forecast.
IDC predicts hardware spending will reach nearly $400 billion by 2020. The bulk of hardware purchases will be comprised of modules and sensors that connect endpoints to networks.
And while hardware spending will dominate spending over the next five years, it will be slower growing compared to other categories like services and software.
“A fairly close relationship exists between high-growth IoT use cases in consumer product and service oriented verticals like retail, insurance, and healthcare,” said IDC’s Marcus Torchia. “As a whole, the IoT opportunity is a diverse developing marketplace for vendors and end users alike.”