Who is leading the Internet of Things' development? – Investment Monitor

The internet of things has seen rapid investment over the past decade, but which companies and geographies are leading its development?
By Lara Williams
The internet of things (IoT) is a catch-all phrase to describe how technology can be used to connect various automated functions within an environment. Examples of this include the way homes, businesses and even entire cities – smart cities – are becoming more automated using sensors and controls for optimal efficiency of everyday processes, including energy use.
A growing component of IoT is the monitoring of people moving within those environments through wearable technology. The connected vehicle also has a part to play in the development of this emerging technologically interconnected environment.
The end goal is ‘pervasive’ IoT, which implies a level of seamless and total connectedness within an environment, but most industry experts agree that this is some way off. To reach pervasive IoT, industry standards for communication protocols and security must be agreed in addition to the provision of real-time intelligence driven by AI.
GlobalData principal analyst John Marcus agrees that pervasive IoT enabled by mobile networks is some way off as it will require pervasive standalone 5G, and the kind of use cases it might support still need to be proven. “Some countries, including the UK, do have multiple 5G public networks available, but standalone 5G coverage – which doesn’t rely on the 4G core network – is still limited,” he says.
The global IoT market will, however, reach $1.1trn by 2024, according to GlobalData thematic research. Enterprise IoT will account for 73% of market revenue by 2024, down from 76% in 2020, while the growing consumer segment will make up 27% in 2024, up from 24% in 2020, with significant growth coming from wearables. The analyst highlights how accelerated digital transformation driven by the Covid-19 pandemic is expected to fuel higher growth across IoT.
Distinct markets within IoT are emerging: automated home, connected car, wearable tech, smart cities and the industrial internet. Within each of these markets exists GlobalData thematic research, which identifies five function layers: the device layer, the connectivity layer, the data layer, the app layer and the services layer. Companies are investing heavily within these five functions of IoT.
As with all emerging technologies, various countries are locked in a space race for global leadership – namely the US and China. The economic decoupling between the US and China, with ensuing tariffs and bans on imports and exports of goods and services including semiconductors, has affected many of the big IoT technology leaders’ supply chains. GlobalData’s research identifies these leading IoT players as Amazon, Apple, Cisco, Dell, Google, HPE, Huawei, Hikvision, IBM, Inspur, Intel, Microsoft and ZTE.
To identify geographical supremacy of the IoT market, an analysis of GlobalData’s patent figures demonstrates that the US and China lead by a long way. Overall, IoT-related patents filed globally increased more than tenfold in the decade from 2010 to 2020.

This massive growth was led by China, with the volume of IoT patents filed between 2002 and 2021 reaching 286,246, almost double the US, which is ranked second with 155,374 patents filed. South Korea and Japan follow with 46,312 and 36,034, respectively. Germany and the UK rank a respective fifth and sixth with 9,686 and 9,548 patents filed within the review period.

Patent activity correlates to some extent with GlobalData’s IoT connections forecast for 2025, according to Marcus, where China is expected to account for 28% of global connections in 2025, the US for 24%, followed by western Europe at 21% and Asia (excluding China) at 15%. “Of course, patent-driven innovation is often licensed and used internationally, giving Japan and South Korea, and to some extent China, a significant influence outside of their home turf,” he adds.
The number of mergers and acquisitions (M&A) deals in the IoT space rose dramatically from just six in 2010 to 343 in 2020. Deal volumes for IoT have outpaced many other emerging technologies, according to Global Data. By July 2022, the IoT deal volume of 246 was more than double that of digital media at 93 and AI at 68, cloud 67 and big data 57.

The leading acquirers of IoT-related companies during the past decade were Apple, Intel, Amazon, Garmin, ARM, Cisco, Alphabet, AT&T and Accenture. Marcus says this M&A activity has seen the IoT platforms market consolidate around the big cloud players such as Amazon Web Services, Microsoft, Google and a few others.

In terms of hiring trends, the top five companies from July 2021 to June 2022 were Amazon, Apple, Siemens, Accenture and Bosch. With 4,986 hires in June 2022, Amazon led the way, with five times the volume of its nearest contenders.

Aside from actual hiring volumes, Samsung was the company with the highest growth in IoT hiring. In the period from July 2021 to June 2022, Samsung aggressively hired IoT-skilled workers ahead of all other leading IoT companies.

The future growth of the IoT market will depend heavily on a steady supply of components such as semiconductors, which have seen significant supply chain shortages over the past couple of years. New semiconductor fabs are due to come online in the US and Europe in a bid to diversify dependence away from Taiwan and South Korea.
Indeed, in July 2022, leading IoT company Bosch announced it would invest approximately $400m by 2025 as part of a larger German government and European Chips Act investment of $3bn to expand the company’s semiconductor manufacturing capacity in Germany. In addition to the semiconductor supply chain issues of the past couple of years, another factor that could limit growth of the IoT ecosystem is the slow development of new-generation devices to catch up with the latest communication standards including 5G, NB-IoT and LTE-M, according to Marcus.
Critical factors for pervasive IoT will be AI for real-time intelligence, cloud computing, cybersecurity and 5G. When these technologies have reached maturity, pervasive IoT could help with anything from achieving the UN’s 17 Sustainable Development Goals, to monitoring real-time health problems, to providing more efficient and connected banking and transport systems. Investment is increasing rapidly and the technology is advancing on what may turn out to be an emerging technology that could help combat some of the world’s most pressing problems.

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