The Internet of Things (IoT) market in the Middle East and Africa is expected to grow 15 per cent this year to $6.99 billion compared to $6.07 billion last year as automation gains traction, industry experts said.
IoT is defined as the network of devices that are connected to the internet and can be controlled remotely,
According to Wale Babalola, research analyst for telecommunications and IoT at International Data Corporation (IDC), the regional market will grow to reach $12.62 billion by 2021 as the adoption is expected to accelerate as organisations from both the public and private sectors increasingly digitalise their businesses in a bid to automate their operations and ramp up productivity.
And as organisations increasingly realise the added value that is provided by IoT, he said that further development of innovative industry-specific solutions can be seen.
In the UAE, IoT spend stood at $500 million in 2017 and it is expected to reach $900 million by 2021.
Paul Black, programme director for telecoms and networking at IDC, said that IoT spending is expected to surpass $10 billion by 2020 with manufacturing, utilities, health care and transport industries forming the key industry markets.
He said that the region is growing from a relatively small base of IoT spending, less than one per cent of the global spend. In 2017, the total regional IoT spend stood at $6.07 billion.
Black said that top four countries (Turkey, South Africa, Saudi Arabia and the UAE) in the region will account for 58 per cent of the total spend by 2021.
Manufacturing, transportation, utilities, cross-industry (connected vehicles, smart buildings, staff identification), consumer and health care verticals accounted for two-thirds of the spending in 2017.
He said the factors that will influence the evolution of IoT market going forward are rapid adoption, security, increasing efficiency, ability to lower total cost of ownership, intelligent networks and blockchain. “5G will be the intersection point of IoT and mobility and its deployments will multiply the growth of IoT,” he said.
Totalling $2.48 billion, IoT services is forecast to be the market’s largest technology category in 2018, with the majority of this total going toward ongoing services, IT services, and installation services. Hardware will be the second-largest technology category, followed by software and then connectivity. The vast majority of hardware spend (85 per cent) will go towards modules and sensors.
Meanwhile, software will be the market’s fastest growing category over the coming years, with spending in this area expected to increase at a compound annual growth rate of 21.3 per cent by 2021 forecast period.