How to size up the Internet of Things market opportunity

Forecasting the market for the Internet of Things (IoT) is particularly vexing because there are so many "things" and moving parts. The area involves chipmakers, device manufacturers, software developers and so many more players. Everything from the cars to thermostats are getting connected, not to mention objects that are yet to be invented. However you look at it, the numbers are impressive. Gartner, which excludes PCs, smartphones and tablets from its IoT numbers, predicts the IoT sector will include 26 billion units installed by 2020, representing a 30-fold increase from 2009. Cisco and others peg the number of connected devices at 50 billion by 2020.

Although relatively small in revenue for wireless operators, connected devices and machines that talk to one another and the network represent a large and high margin business, analysts at Raymond James have noted. IoT applications typically use very little data, and traffic is not as time sensitive as voice, resulting in a margin-rich service opportunity that in effect can make use of excess network capacity and provide a recurring revenue stream for operators. For more on how to assess the IoT market, check out this special report.

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