While the internet of things’ exponential growth and forecasted impact on the global economy is not news to many, reports continue to come out revealing the extent of this industry’s possible economic ramifications. This month, both the International Data Corporation (I.D.C.) and McKinsey issued data detailing how vast the growth of the internet of things (IoT) has been in this year alone, and how it will continue to present massive opportunities for profit. Perhaps the data on the potential of IoT has finally driven U.S. lawmakers this week to push for investigations into understanding the IoT phenomenon.
Last week, the I.D.C. issued data forecasting that the growth of the wearables market in 2015 will be up by 173.3% from the 26.4 million units shipped in 2014 to 72.1 million in 2015. This trajectory is propelled mostly by basic wearables like those from Fitbit and Xiaomi, as the market prepares to integrate more smart wearables like Apple’s watch. (Despite tech giants like Samsung and Qualcomm having hyped their smart wearables for a couple of years now, basic ones have dominated the market.) The I.D.C. says that shipment volumes are expected to experience a compound annual growth rate (CAGR) of 42.6% over five years, reaching 155.7 million units shipped in 2019.
Jitesh Ubrani, senior research analyst for the I.D.C.’s Worldwide Mobile Device Trackers stated:
The demand for basic wearables, those that do not run third party apps, has been absolutely astounding. Vendors like Fitbit and Xiaomi have helped propel the market with their sub-$100 bands, and IDC expects this momentum will continue throughout 2015…We expect smart wearables, those capable of running third party apps, to take the lead in 2016. Smart wearables like the Apple Watch and Micosoft’s Hololens are indicative of an upcoming change in computing, and the transition from basic to smart wearables opens up a slew of opportunities for vendors, app developers, and accessory makers.
Additionally, the McKinsey Global Institute predicts that IoT will offer a potential global economic impact of $4 trillion to $11 trillion in the year 2025. The group suggests that developing economies could have a heavy hand in the development of IoT — generating nearly 40% of the industry’s value. And the huge potential for improvement in the healthcare industry is one example McKinsey illustrates: “For example, in 2025 remote monitoring could create as much as $1.1 trillion a year in value by improving the health of chronic-disease patients.”
It is likely that reports such as these are driving lawmakers to look more closely at the potential of the internet of things. This week, U.S. senators from both Republican and Democratic parties filed a letter with the Government Accountability Office urging an exploration into IoT. The senators say that heavier, more in-depth analysis is required of this new industry in order to understand its economic potential and, of course, its ramifications for privacy and security — two of the main concerns surrounding the proliferation of IoT. Spectrum availability is also a concern as millions more devices will connect to the internet over the coming years. Many questions remain, but one thing is certain: IoT’s full impact on the global economy will be manyfold.