Spending on the Internet of Things (IoT) in Central and Eastern Europe (CEE) will increase by 15.5% in 2018 from 2017 levels, according to market intelligence firm International Data Corporation (IDC).
The research company's updated Worldwide Semiannual Internet of Things Spending Guide forecasts IoT spending in the CEE region to increase from $9.7 billion in 2017 to $11.2 billion in 2018.
Between 2017 and 2021, IoT spending in the region is expected to increase by 18.8%. Revenue generation within the market is expected to surpass $20 billion in 2021.
IoT spending per sector
The manufacturing sector is expected to spend $2.2 billion, the transportation sector $1.6 billion whilst the utilities invests $1.2 billion in IoT through in 2018.
The manufacturing industry will largely invest in IoT to support manufacturing operations and production asset management, whilst stakeholders in the transportation industry will spend two thirds of IoT budget on freight monitoring, followed by fleet management.
The utilities industry will invest in IoT technologies in smart grids initiatives for electricity, gas, and water.
Consumer use and purchasing of IoT devices and technologies are expected to grow faster than the market average. The segment will be the third largest by the end of 2018, with revenue generation reaching $1.2 billion. Investments will be made in smart homes, such as home automation, security, and smart appliances.
IoT hardware will be the largest category in 2018 in revenue terms, with $4 billion going largely toward modules and sensors, along with some spending on infrastructure and security.
Services will be the second-largest technology category, followed by software and connectivity. Software spending will be led by application software, analytics software, IoT platforms, and security software. Software will also be the fastest-growing technology segment, with a five-year CAGR of 21.7%.
Russia is expected to lead other countries in terms of spending, with investment almost reaching $4 billion, followed by Poland with $2.6 billion and the Czech Republic with $1 billion.
The majority of IoT spending will be in the manufacturing and transportation segments in Russia, Poland and the Czech Republic.
Milan Kalal, program manager of Internet of Things research with IDC CEMA, said" "IoT has been around for a while, but the recent explosion in interest is down to the massive price drops for sensors, combined with near ubiquitous connectivity – we are heading towards everything being smart and connected,.
“Their awareness that IoT can help organisations compete more effectively, innovate, and generate additional revenues is stronger every day.
"Cross-industry IoT investments, which represent use cases common to all industries, such as connected vehicles and smart buildings, are quickly picking up steam in Central and Eastern Europe, and rank among the fastest growing areas of spending throughout our five-year forecast. IDC research indicates that the various connected-vehicles use cases (e.g., infotainment, emergency, vehicle-to-vehicle solutions) will record very strong spending growth over the forecast period and exceed a half billion dollars in 2018.”