Gartner has estimated that 1.1 billion connected things will be used by smart cities in 2015, rising to 9.7 billion by 2020.
Smart homes and smart commercial buildings will represent 45 percent of total connected things in use in 2015, due to investment and service opportunity, and Gartner estimates that this will rise to 81 percent by 2020.
“Smart cities represent a great revenue opportunity for technology and services providers (TSPs), but providers need to start to plan, engage and position their offerings now,” said Bettina Tratz-Ryan, Research Vice President, Gartner.
Gartner defines a smart city as an urbanised area where multiple sectors cooperate to achieve sustainable outcomes through the analysis of contextual, real-time information shared among sector-specific information and operational technology systems.
“The majority of Internet of Things (IoT) spending for smart cities will come from the private sector,” Tratz-Ryan added. “This is good news for TSPs as the private sector has shorter and more succinct procurement cycles than public sectors and cities.”
Gartner predicts that residential citizens will lead the way by increasingly investing in smart-home solutions, with the number of connected things used in smart homes to surpass 1 billion units in 2017.
Smart LED lighting is forecast to record the highest growth of IoT consumer applications, from 6 million units in 2015 to 570 million units by 2020.
“Homes will move from being interconnected to become information- and smart-enabled, with an integrated services environment that not only provides value to the home, but also creates individual-driven ambience,” Tratz-Ryan said. “The home will become the personal space that provides assistance or personal concierge experiences to the individual.”
Gartner also estimates that smart-home security and safety will represent the second-largest service market by revenue in 2017, and that by 2020, the smart healthcare and fitness market will have grown to nearly $38 billion.
“We expect commercial IoT implementations to be used across multiple industries, such as smart energy, environmental service or journey planning, which will offer TSPs the opportunity to monetise IoT by building IoT-related service models,” concluded Tratz-Ryan. “Significant value contribution will come from information and data analytics of IoT, which connect services to third-party transactions and billing records, as well as enabling subscriptions or on-demand services. This enables a multidimensional value chain with different partners.”
