New connections to the Internet of Things are now increasing by more than 6x the number of people being added to the Internet of Humans (IoH) each year, the market research firm said.

Total IoT semiconductor sales are still expected to rise 19 percent in 2016 to $18.4 billion. However, the firm has trimmed the compound annual growth rate (CAGR) it foresees for IoT semiconductors over the period 2013-to-2019 from 21.1 percent to 19.9 percent. Semiconductor sales for IoT system functions are now expected to reach $29.6 billion in 2019 versus the previous projection of $31.1 billion in the final year of the forecast.

Annual IoT semiconductor market and growth from 2013 to 2019. Source: IC Insights.

The most significant changes in the new outlook are that semiconductor revenues for connected cities applications are projected to grow by a CAGR of 12.9 percent between 2014 and 2019 (down from 15.5 percent in the original forecast) while the connected vehicles segment is expected to rise by a CAGR of 36.7 percent (up from 31.2 percent in the previous projection).

IoT semiconductor sales for connected cities are now forecast to reach $15.7 billion in 2019 while the chip market for connected vehicle functions is expected to be $1.7 billion in 2019, up from the previous forecast of $1.4 billion.

For 2016, revenues of IoT semiconductors used in connected cities applications are expected to rise 15 percent to about $11.4 billion while the connected vehicle category is projected to climb 66 percent to $787 million this year.

Sales of semiconductors for wearable IoT systems are now expected to grow 22 percent to about $2.2 billion in 2016 after surging in 2015 to nearly $1.8 billion following Apple’s entry into the smartwatch market in 2Q15.  The semiconductor market for wearable IoT applications is expected to be nearly $3.9 billion in 2019. Meanwhile, the forecast for IoT semiconductors in connected homes and the Industrial Internet categories remains unchanged.  The connected homes segment is still expected to grow 26 percent in 2016 to about $545 million, and the Industrial Internet chip market is forecast to increase 22 percent to nearly $3.5 billion.  The semiconductor forecast for IoT connections in the Industrial Internet is still expected to grow by a CAGR of 25.7 percent to nearly $7.3 billion in 2019 from $2.3 billion in 2014.

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