IoT Market Size, Share, Growth by 2030

The Internet of Things (IoT) market is projected to expand significantly, increasing from US$ 611.00 billion in 2023 to an impressive US$ 3,967.99 billion by 2030, reflecting a compound annual growth rate (CAGR) of 30.6% during this period.

As reported by the International Trade Administration (ITA), e-commerce in retail consumer goods accounted for 18% of the total global retail sales in 2020, with expectations to rise to approximately 22% by 2024. The rapid growth of the e-commerce sector has prompted retailers to adopt IoT technologies to enhance operational efficiency, improve customer experiences, and secure a competitive edge. Key factors driving the integration of IoT solutions in e-commerce include heightened consumer demand for superior shopping experiences, decreasing costs of IoT sensors and connectivity, and a rise in the use of smart payment systems. Additionally, retailers are leveraging IoT to mitigate security risks, implementing IoT-enabled systems to prevent network service disruptions in their stores and warehouses. The role of IoT in automating processes and boosting operational efficiency in retail is becoming increasingly vital, leading to a growing need for IoT applications in areas such as surveillance, security, supply chain management, energy efficiency, inventory control, and workforce optimization. For example, Walgreens, a prominent US retailer, has been testing IoT-enabled displays on refrigerator doors that utilize facial recognition technology to tailor advertisements based on the viewer's estimated age and gender. Furthermore, many retailers are employing customizable IoT-connected dashboards to gather customer feedback, using these insights to refine customer experiences. Consequently, as the e-commerce sector continues to expand, the demand for IoT solutions is anticipated to increase, thereby propelling the growth of the IoT software market throughout the forecast period.

Impact of the COVID-19 Pandemic on the IoT Market

The COVID-19 pandemic has had varied effects across different European countries. Nations like Italy and France experienced significant surges in COVID-19 cases, leading to strict and prolonged lockdowns and social distancing measures. During this time, the use of smart wearables, smart cameras, and other telecommunications devices, including IoT-based technologies, surged, resulting in a heightened need to secure smart homes and buildings against cybersecurity threats. The pandemic also accelerated the adoption and investment in IoT technologies across various sectors, particularly in retail, where IoT facilitates the development of multichannel retail strategies and ensures a seamless consumer experience across shopping platforms. Additionally, the push for digitalization has improved production processes and optimized supply chains in industries such as electrical utilities, mining, agriculture, oil and gas, and transportation. The increased demand for automation to reduce reliance on a fully-staffed workforce further spurred the adoption of IoT technologies throughout Europe. Thus, the COVID-19 pandemic has had a positive impact on the IoT market in Europe.

In 2022, Europe held the largest share of the IoT market. The demand for IoT solutions is on the rise across the continent, particularly in countries like Germany, the UK, and France. Factors contributing to this growth include a growing preference for cloud-based IoT software, the necessity for enhanced supply chain and customer relationship management, and advancements in industrial-grade digital products. The manufacturing, healthcare, and banking, financial services, and insurance (BFSI) sectors are significant contributors to the IoT market in Europe.

European governments are actively promoting the adoption of IoT and edge computing through various initiatives. In March 2021, the European Commission hosted a Fireside Chat workshop aimed at connecting expert stakeholders from sectors such as agriculture, automotive, aerospace, construction machinery, home automation, and industrial automation. The goal of this workshop was to formulate a strategy for the future development of IoT and edge computing in Europe, with a market outlook spanning five years. Additionally, the European Union (EU) supports numerous funding programs for next-generation IoT and edge computing initiatives. For instance, through the Horizon Europe program, the EU is set to invest over US$ 169.86 million (EUR 150 million) in research and innovation focused on "World Leading Data and Computing Technologies: From Cloud to Edge to IoT for European Data." This initiative aims to foster the development and deployment of next-generation computing components, systems, and platforms. Such efforts by the EU are expected to significantly boost the growth of the IoT market in Europe in the coming years.

IoT technology enables businesses to automate processes, lower labor costs, and gain real-time insights into their operations, including machine performance, supply chains, and logistics. According to the Microsoft IoT Signals 2021 report, 99% of organizations surveyed in Europe are familiar with AI technology, 98.3% with edge computing, and 89.2% with digital twins. Notably, around 88% of German companies are likely to adopt AI technology, with approximately 68% already integrating AI into their IoT solutions. Therefore, the incorporation of AI and digital twins is driving the adoption of IoT, further accelerating market growth in Europe.

Key players in the IoT market include Microsoft Corporation, Hewlett Packard Enterprise Development LP, SAS Institute Inc., VMware, Inc., Google, LLC, Oracle Corporation, Cisco Systems, Inc., SAP SE, IBM Corporation, and Qualcomm Technologies, Inc. A comprehensive analysis of other significant IoT market players has also been conducted to provide a well-rounded view of the market and its ecosystem.

The overall size of the IoT market has been determined through a combination of primary and secondary research methods. The research process began with extensive secondary research utilizing both internal and external sources to gather qualitative and quantitative data related to the IoT market. This approach also aimed to provide an overview and forecast of the IoT market's growth across all segments. Additionally, numerous primary interviews were conducted with industry participants and experts to validate the data and gain deeper analytical insights. Participants included industry professionals such as VPs, business development managers, market intelligence managers, and national sales managers, as well as external consultants like valuation experts, research analysts, and key opinion leaders specializing in the IoT sector.