Yole predicts IC price pressure in IoT roadmap

Yole predicts IC price pressure in IoT roadmap

Market news |
By eeNews Europe

One long-term result is likely to be the merging of companies and activities in vertical integrated enterprises to capture value from IoT-related services.

Yole has produced a report on technologies and sensors for IoT that looks forward ten years and sees the IoT equipment market going from an annual value of $9.5 billion in 2014 to $70 billion in 2018 before falling back to $46 billion in 2024. This is partly because in the second period IoT deployments will become smaller but more swarm like, Yole forecasts. However, it is also because value in IoT will migrate to software and services.

Yole predicts the annual value of the overall IoT market in 2024 will be $400 billion with $46 billion coming from hardware, $59 billion from cloud infrastructure and $296 billion from data processing services. That data processing will represent 15 percent of all data processing on the planet, Yole claims.

The Internet of Things roadmap, according to Yole. To enlarge diagram click here

That the value of IoT is tied up in data services is understandable when it is considered that the main purpose of IoT is to make sensing ubiquitous at very low cost resulting in extremely strong price pressure on electronic component manufacturers. Nevertheless, the next five years will be extremely fruitful for device makers and is the time when manufacturers must stake a claim to IoT business.

IoT is a multi-billion dollar market emerging from the convergence of several established markets, such as industrial sensors, wearable electronics and home automation and from three categories of supplier; the electronics components, communications and data storage companies, and service companies. Companies are already positioning themselves including Bosch Connected Devices and STMicroelectronics, Oracle, Amazon, Google and Facebook.

Just as there is expected to be price pressure in the components sector so to in data storage despite large investments needed to house the data. Yole reckons a price war has already begun between the major cloud computing companies cutting prices while growing capacity.

"Service companies will be the big winners in this field. In order to secure some of this value, hardware and cloud companies will have no choice but to try and integrate themselves vertically in order to valorize themselves and the data they’ll be responsible for," said Guillaume Girardin, Yole analyst and one of the co-authors of the report, in a statement.

Related links and articles:

News articles:

Manufacturing matters to Analog Devices in the IoT era

Gartner puts a number on IoT in 2020

What the Internet of Things needs to become a reality

Samsung tips $100 million IoT strategy

Freescale takes the broad view of IoT/M2M

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