Machina Research said it has become clear that the Internet of Things (IoT) represents a far greater revenue opportunity than that offered by machine-to-machine (M2) applications alone.
The research company has therefore expanded the scope of its IoT revenue forecasts, predicting that the revenue opportunity will rise from $892 billion (€777 billion) in 2015 to $4 trillion in 2025.
"Specifically, we have now added revenues associated with IoT-like applications that are powered by 'exhaust data' from M2M applications as well as more 'horizontal' revenue types such as application development and project work, which have not been included in our forecasts so far," the company said.
It noted that these new "IoT service" elements accounted for $294 billion in revenue in 2015, and will rise to $1.9 trillion in 2025. Of these new IoT service revenue elements, by 2025 Europe will be the largest region, slightly ahead of North America, with both capturing more than $500 billion.
Jim Morrish, founder and chief research officer of Machina Research, commented that the revised forecasts reflect the company's expectation "that the concept of IoT will subsume almost all of IT within the medium term future."
However, Morrish said the figures should be interpreted with caution, warning that, for instance, "forecasting the revenue opportunity for an IoT platform will always be a far more complicated exercise than simply referencing estimates of market size."
Indeed, the IoT sector is littered with forecasts that are under constant revision, such as the prognosis that there would be 50 billion connected devices by 2020. Even Ericsson has backed away from this forecast, suggesting in its latest full Mobility Report in November 2015 that around 28 billion connected devices are expected by 2021.
A recent report from Beecham Research also noted that there is no "one-type-fits-all" connectivity option for the increasingly wide range of applications covered by the IoT, and called for a greater focus on the actual connectivity needs of these applications rather than on the underlying technologies such as low-power wide-area (LPWA) networks.
- see this Machina Research release
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