Spending on Internet of Things (IoT) in the Asia-Pacific region excluding Japan shrank by 7% in 2020, with the impact of the pandemic driving growth in the opposite direction from the forecast 12.5% growth, according to IDC.
Even then, the IDC Worldwide Semiannual Internet of Things Spending Guide indicates a rebound to double-digit growth in 2021 and a CAGR of 11.7% over the 2020-2024 forecast period in APAC.
Bill Rojas, adjunct research director at IDC Asia-Pacific, said that while the pandemic has slowed the growth of IoT spending in 2020, it also highlighted the importance of public priorities to be rearranged in IoT for public healthcare and telemedicine, remote/online education, disaster management, automated manufacturing, online retail, food delivery, logistics and transportation and smart home services.
Industries that were highly impacted by the pandemic — personal & consumer services, transportation, and discrete manufacturing resources — suffered reduced IoT investments in line to their reduction in overall IT spend.
With resumption of economic activities in the region due to better control of pandemic, these industries spend are expected to rebound back in 2021 and achieve double digit growth in the forecast period to 2024.
Driven by the pandemic in 2020, emphasis on overall health, work from home, safety, and need for better connectivity resulted in double-digit growth of healthcare, telecommunications, retail, and consumer industry.
Long-term focus on environmental conservation will lead to use cases such as electric vehicle charging and environmental monitoring detection to grow by 17.8% and 17.7% respectively in the forecasted period.
“Although COVID-19 continues to impact the economies in Asia/Pacific, more than two thirds of the organisations intend to retain their IoT budgets at same or increased level, at 50% of which will increase the IoT investments,” said Sharad Kotagi, associate market analyst at IDC Asia-Pacific.
“This is because enterprises view IoT as a key platform to build new business models, helping them evolve and grow in the new normal with focus on people and infrastructure,” said Kotagi.
China, Korea, and India are expected to account for more than three-quarters of overall IoT spending in APEJ throughout the forecast, followed by Australia and Indonesia. Countries that will see the fastest IoT spending are China, Malaysia, and Hong Kong.