Global Connectivity Will Remain Reliant on Bluetooth, Wi-Fi and RFID, Even as LPWA Catches Up

In a new report, ABI Research shows how the Internet of Everything represents the practical aggregation of three domains: The Internet of Digital, The Internet of Things, and The Internet of Humans. These are three separate addressable markets served by the same single Internet and the same variety of connectivity technologies. When industry commentators talk about the connected world, very large numbers are discussed. Numbers so large that it is hard for an individual organization to apply them in any meaningful way to their own businesses.

Jamie Moss, Research Director of M2M, IoT, and IoE explains that “Organizations need to be able to identify the segment of the connected world that is relevant to them, namely the endpoints that their products and services can address. This requires an understanding of how the connected world breaks down, by technology, application, device type, and end-user channel. This level of segmentation can only be built from the bottom up, by understanding individual device markets, the application for which they are suitable, and the technologies that enable them. The Internet of everything must not be considered as a market but as the aggregation of all markets.”

At the end of last year, there were nearly 22.5 billion connected devices worldwide; in 2022, there will be more than 40 billion. Of the nine vertical markets that ABI Research aggregates connected devices into, by far the most significant are PCs and Digital Home, Mobile Devices, and Retail, Advertising and Supply chain. This will not change between now and 2022.

Typically,  the installed base of mobile devices runs on the powerhouse of the mobile phone industry - at first feature phones and since 2012 smartphones, specifically.  PCs and Digital Home is a rich melting pot of important device markets from routers, to laptops and desktops, to TVs and set-top boxes. Retail, Advertising and Supply Chain is an industry propelled by the growth of connected devices in retail and advertising, as well as in asset and inventory management.

Turning to the connectivity technologies that are used in devices that constitute a longer-term portion of the installed base before being replaced, Bluetooth and Wi-Fi were the most prevalent at the end of 2017, with 8.7 and 8.4 billion devices active worldwide, respectively. Cellular technologies used for non-M2M purposes were close behind with nearly 5 billion active connections. There is considerable overlap between this Bluetooth, Wi-Fi and cellular with many devices featuring more than one, or all three. The total number of connections by technology differs from the total number of devices by a ratio of 5:3. For example,  there are only 60 percent as many devices as there are total connections active across all technologies.

Connections for Cellular M2M and for proprietary Low Power Wide Area Networks (LPWAN) will have by far the greatest compound annual growth rate over the next five years. Between 2017 and 2022, M2M and LPWA connections will double their representation, from eight percent of all cellular connections to more than 16 percent. By 2022 the total number of cellular M2M and LPWA connections active will be 1.5 billion. Although this is only four percent of all connected devices, it represents those that will be the most individually valuable enterprise assets.

Moss concludes, “Unlike more common, less secure connectivity technologies such as Bluetooth and Wi-Fi, IoT-specific technologies are not bundled into a product as a generic differentiator, on the vague premise that an end user might find a use for them. They are built into products shipped to order after careful upfront calculations have determined that they will generate a specific Return on Investment (ROI). The growth of IoT connections is therefore organic, occurring naturally as and when the technology fits and the business case is right. The growth of IoT connections is immune to hype, it exists for practical pre-calculated outcomes.”

These findings are from ABI Research’s Internet of Everything Market Tracker report. This report is part of the company’s M2M, IoT & IoE research service, which includes research, data, and Executive Foresights.

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