Spending on the Internet of Things (IoT) in the Asia Pacific region is projected to reach $277.5 billion in 2023, marking an 11 percent increase from the previous year.
The rapid growth is attributed to the rising demand for remote operations, supply chain efficiency, the deployment of commercial 5G, and the increasing digital footprint across the region, according to the latest Worldwide Semiannual Internet of Things Spending Guide by IDC.
IDC predicts that the momentum will continue, with IoT investments expected to reach an impressive $435 billion by 2027, showcasing a compound annual growth rate (CAGR) of 11.7 percent between 2023 and 2027.
One of the significant drivers behind the IoT adoption is the continuous improvement in IoT connectivity technology, both fixed and wireless. Power-saving IoT devices utilizing 5G enhanced Machine Type Communications technologies, such as 5G Reduced Capacity (RedCap), are expected to replace LTE Cat 3/4 devices, resulting in more video-enabled endpoints and advanced analytics.
Moreover, 5G Non-Terrestrial Network satellite connectivity is anticipated to extend the reach of IoT to remote areas, opening doors to applications like disaster recovery and response, oil & gas, mining, and resource monitoring.
Discrete and Process Manufacturing industries are projected to lead IoT spending in 2023 and throughout the forecast period, accounting for more than one-third of all IoT investments in the region. State/Local Government and Professional Services follow as the next largest industries in terms of IoT spending. These sectors are driven by the potential to enhance the quality, efficiency, and customer experience of their products and services through IoT integration.
Among the various use cases, Manufacturing Operations, Production Asset Management, Supply Chain Resilience, Inventory Intelligence, and Public Safety and Emergency Response are expected to see the highest spending in 2023. These use cases align with the growth patterns of the host industries, collectively making up more than one-third of the overall IoT spending in the region.
Additionally, Electric Vehicle Charging, Next Generation Loss Prevention, and Agriculture Field Monitoring are identified as the use cases that will experience the fastest spending growth, showcasing the diverse applications of IoT technologies.
China (PRC) remains at the forefront, holding the largest share of IoT spending, with more than 60 percent in 2023, closely followed by South Korea and India. Countries like China, Singapore, and Hong Kong are anticipated to demonstrate the fastest IoT spending in 2023, fueled by the implementation of Smart Factories and Industry 4.0, along with government-led IoT programs and policies.
Sharad Kotagi, Market Analyst at IDC IT Spending Guides, Customer Insights & Analysis, emphasizes the growing focus of organizations on data-driven operations to address specific business goals and customer challenges. IoT investment becomes a crucial aspect in this regard, as many enterprises are already collecting or planning to collect biometric, video, and transactional data to achieve their objectives.
The projections indicate a robust future for IoT adoption in the Asia/Pacific region, with significant growth opportunities arising from advancements in 5G connectivity, digital transformation, and the growing emphasis on data-driven decision-making across industries. As the region continues to embrace IoT technologies, businesses and governments are set to reap the benefits of enhanced efficiency, customer experience, and innovation in their operations.
