Dubai – Spending on Internet of Things (IoT) technologies in the Middle East and Africa (MEA) is set to top $8.47 billion this year, according to the latest forecast from global technology research and consulting firm International Data Corporation (IDC). A recent update to the firm's Worldwide Semiannual Internet of Things Spending Guide shows that IoT spending in the MEA region will grow 15.9% year on year in 2019 and reach $17.63 billion by 2023 as governments and businesses ramp up their investments in digital transformation projects.
"IoT adoption in the MEA region is expected to accelerate over the coming years as organizations from both the public and private sectors look to improve their provision of customer services, expedite decision making, improve the quality of products and services, accelerate their time to market, reduce costs, and increase productivity," says Krishna, program manager for telecommunications and IoT at IDC MEA. "And as organizations continue to reap the value generated by IoT, we can expect to see further development of innovative industry-specific solutions."
Totaling $2.99 billion, hardware is forecast to be the market's largest technology category in 2019, with the majority of this spending going towards modules and sensors. IoT services, forecast to be worth $2.98 billion, will be the second-largest technology category in 2019, with the majority of this total going towards ongoing services and content-as-a-service, as well as IT and installation services. Software will be the third-largest technology category, followed by connectivity. Meanwhile, software will be market's fastest-growing category over the coming years, with spending in this area increasing at a compound annual growth rate (CAGR) of 20.9% over the 2018–2023 forecast period.
The big four countries in the region, namely South Africa ($1.9 billion), Saudi Arabia ($1.49 billion), Turkey ($1.24 billion), and the UAE ($0.65 billion), are expected to account for 62% of total IoT expenditure in the MEA region in 2019. The industries that are expected to spend the most on IoT solutions in 2019 are manufacturing ($1.52 billion), government ($1.11 billion), consumer ($1.09billion), transportation ($1.06 billion), and utilities ($0.73 billion).
Manufacturers will direct most of their IoT spending in 2019 towards solutions that support manufacturing operations and production asset management. In the government sector, public infrastructure asset management, public safety and emergency response, and intelligent transport systems, will account for over 66% of IoT spending in 2019.
Over 75% of consumer IoT spending in 2019 will be driven by investments around smart home technologies, remote health monitoring, and connected vehicles. In the transportation sector, fleet management and freight monitoring solutions together will account for approximately 80% of IoT spending in 2019. Meanwhile, smart grids for electricity will account for 78% of total IoT spending in the utilities sector.
The IoT use cases that IDC expects to attract the largest investments in 2019 are manufacturing operations ($0.58 billion), smart grid electricity ($0.57 billion), production asset management ($0.53 billion), smart home ($0.44 billion), fleet management ($0.44 billion), and freight monitoring ($0.42 billion). IDC forecasts that the top use cases will retain their positions through 2023, with the exception of fleet management and freight monitoring, which are expected to swap their positions. The use cases that will see the fastest spending growth over the 2018-2023 forecast period are airport facility automation (41.1% CAGR), electric vehicle charging (31.3% CAGR), health and wellness (28.9% CAGR), smart building (26.2% CAGR), and smart grids for water (25.2% CAGR).
"Ongoing national transformation programs and digital transformation projects will continue to fuel IoT adoption over the coming 12 months, particularly in Saudi Arabia and the UAE," says Krishna. "As such, these two countries are expected to contribute a combined $2.13 billion of the MEA region's total IoT spending of $8.47 billion in 2019."
For more information, please contact Sheila Manek at smanek@idc.com or on +971 4 446 3154.
About IDC Spending Guides
IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.
About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG , the world's leading technology media, research, and events company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.
IDC in the Middle East, Turkey, and Africa
For the Middle East, Turkey, and Africa region, IDC retains a coordinated network of offices in Riyadh, Nairobi, Lagos, Johannesburg, Cairo, and Istanbul, with a regional center in Dubai. Our coverage couples local insight with an international perspective to provide a comprehensive understanding of markets in these dynamic regions. Our market intelligence services are unparalleled in depth, consistency, scope, and accuracy. IDC Middle East, Africa, and Turkey currently fields over 130 analysts, consultants, and conference associates across the region. To learn more about IDC MEA, please visit www.idc.com/mea. You can follow IDC MEA on Twitter at @IDCMEA.
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