China's Business IoT Market to Shift to Agglomeration as Growth Accelerates
Published on: 25th Oct 2016
China's business Internet of Things (IoT) market is expected to reach USD361 billion (around RMB2.4 trillion) by 2020, implying a CAGR of 13.3% over the next five years. This fast growth will be mainly fuelled by IoT software, which is likely to be the most promising technology segment in the country's business IoT industry, according to the recently released IDC China Semiannual Internet of Things Spending Guide Forecast.
China's IoT market, which has remained fragmented for the past five years in its exploratory development stage, is set to move into a development phase featuring market integration and platform agglomeration, driven by technology and business model innovations.
"IoT is now entering an era of rapid development," said Antonio Liu, Senior Market Analyst at IDC China. "An important step in the future IoT ecosystem development in China will be an accelerating shift from market fragmentation to market integration, and from vertical industry convergence to horizontal platform agglomeration. This will also become the main theme in the next phase of the market."
IoT has been identified as one of the key industries in China's national innovation strategy. It serves as an important driver for the country to transform and upgrade its traditional industries, and to develop strategic emerging industries, offering enormous business opportunities. During the country's 13th Five-Year Plan period, Big Data, Cloud Computing and IoT technologies will develop rapidly and find wide applications. More importantly, these technologies will influence one another and push forward the third wave of the information technology transformation. As IoT gains in popularity, IoT technologywill be further integrated with information technologies (IT) and operation technologies (OT), unlocking the huge potential in China's business IoT market - one that is still in its early stages.
IDC expects technology and business model innovations to drive the following two important development trends in China's business IoT industry over the next three years:
IoT-specific platforms to accelerate IoT industry development
IoT applications are gradually entering people's everyday lives, generating new demand for connectivity that IDC believes will emerge as the most direct growth opportunity in the market. IoT devices have become the most competitive field in the IoT industry as connectivity platforms mushroom. The growing reach of IoT platforms is ushering in a high-speed transformation toward a new generation of information communication. In the future, enterprises from different vertical industries and different technological fields will aid the development of the market, giving rise to diverse platform variety and services.
IoT &Big Data analysis starting to show its value
China's IoT industry chain has been gradually improving and taking shape
thanks to the national policy support. IoT industry will gradually show its
data-driven features as it enters fast-growth period. More and more enterprises
have begun to explore the core value of IoT, launching different IoT solutions
and data applications. Industry-specfic data analysis and applications
spearheaded by industry IoT companies have been well received in the market.
Telco operators have introduced general IoT platforms and Big Data analysis to
serve their partners in the ecosystem. And IDC believes that startups that go
deep into different segments and provide specialized services are expected to
emerge and prosper.