Smart cities to boost IoT demand by 39% in 2016

By Yoon Sung-won

The accelerated penetration of smart city technologies will drive up demand for Internet of Things (IoT) devices to 1.6 billion units next year, up 39 percent from this year, an international IT industry research firm said Friday.

Gartner also expects that smart homes will exceed smart commercial buildings in terms of IoT device demand by 2018.

"Smart commercial buildings will be the highest user of (IoT) until 2017, after which smart homes will take the lead with just over 1 billion connected things in 2018," said Gartner Research Vice President Bettina Tratz-Ryan.

The market researcher said commercial and industrial buildings will heavily benefit from the introduction of IoT technologies as they provide an integrated management based on big data collected from sensors in the facilities.

"Especially in large sites, such as industrial zones, office parks, shopping malls, airports or seaports, IoT can help reduce the cost of energy, spatial management and building maintenance by up to 30 percent," Tratz-Ryan said.

The growing demand for IoT devices in the commercial building sector has been led by business applications such as energy efficiency systems, according to the researcher.

It said commercial security cameras and indoor light-emitting diode (LED) lights will hold 24 percent of demand for IoT in smart city projects, taking the leading role in next year’s growth.

"Incentives into the deployment of IoT in commercial real estate will fuel its development," said Tratz-Ryan, citing the U.K.’s mandate that all public-sector construction beginning in 2016 complies with building information modeling (BIM) standards.

The growth of the smart home sector has been led by consumer IoT applications including home automation devices like smart thermostats, home security systems and integrated home appliances as well as smart TVs and smart lighting.

"The growing maturity of smart home platforms through an ecosystem of home appliances, infotainment and home sensors will mean that smart home investments overtake those of commercial buildings in 2018," Tratz-Ryan said.

She said that smart homes as a part of smart city projects will take 21 percent of total demand for IoT devices in 2016 and will record rapid growth in the next five years.