Gartner Inc yesterday said shipments of Internet of Things (IoT) devices would expand at an annual rate of 35 percent to 25 billion units by 2020, from 3.7 billion units at the end of last year.
Applications for the automotive sector are also projected to increase 67.2 percent annually between 2013 and 2020, Gartner said.
In the era of IoT, “things tend to be installed for many years and with long replacement cycles, unlike previous-generation hardware devices such as smartphones,” which consumers replace every one to two years, Gartner analyst Jim Tully said.
Tully said the business model and value chain will be very different in the IoT era.
The bulk of the value comes from service providers, such as General Electric Co or Accenture PLC or Wipro Ltd, with relatively little value from hardware devices, he said.
Hardware-focused businesses need a radical re-think about how to generate profits, he said, citing SKF AB as an example.
The Swedish company now provides pre-emptive maintenance services by measuring the degree of ball wearing using sensors within ball bearings, he said.
Consumers and enterprises are expected to spend a total US$263 billion on IoT-related services by 2020, according to Gartner.
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