Smart Cities To Use 10-Bn Connected Things By 2020

by CXOtoday News Desk    Mar 19, 2015

smart city

The Internet of Things (IoT) revolution is finally underway, as a new report by Gartner estimates that in 2015 there will be 1.1 billion connected things being used in smart cities a figure which will rise dramatically to over 9.7 billion by 2020.

Smart homes and smart commercial buildings will represent 45 percent of total connected things in use in 2015, due to investment and service opportunity, and Gartner estimates this will rise to 81 percent by 2020.

“Smart cities represent a great revenue opportunity for technology and services providers (TSPs), but providers need to start to plan, engage and position their offerings now,” said Bettina Tratz-Ryan, research VP at Gartner. “The majority of Internet of Things (IoT) spending for smart cities will come from the private sector. This is good news for TSPs as the private sector has shorter and more succinct procurement cycles than public sectors and cities.”

Smart home investments

Residential citizens will lead the way by increasingly investing in smart-home solutions, with the number of connected things used in smart homes to surpass 1 billion units in 2017. Connected things include smart LED lighting, healthcare monitoring, smart locks and various sensors for such things as motion detection or carbon monoxide.

Smart LED lighting will record the highest growth of IoT consumer applications—from 6 million units in 2015 to 570 million units by 2020. Light will move from being an illumination source to a communications carrier incorporating safety, health, pollution and personalized services.

“Homes will move from being interconnected to become information- and smart-enabled, with an integrated services environment that not only provides value to the home, but also creates individual-driven ambience. The home will become the personal space that provides assistance or personal concierge experiences to the individual,” said Tratz-Ryan.

IoT outside home

In addition to residential IoT investments, there are a number of IoT deployments for on-street and off-street parking guidance, road traffic guidance and traffic flow metering. A quick win within transport is the reduction of traffic congestion. California and the UK are already implementing radio receivers or sensors that are embedded on a section of highway to diagnose traffic conditions in real time.

Another successful use of IoT in the city is smart parking. The city of Los Angeles, for example, has been implementing new parking meters, parking space vehicle sensors, real-time parking guidance and a full parking management system to influence demand during peak times.

“Electric mobility, charging stations and embedded IoT will generate additional IoT opportunities in smart cities,” said Tratz-Ryan. “This could be, for example, IoT in vehicles, or vehicle batteries sensing and communicating with the driver, or the next charging station to negotiate charging terms.”

The revenue opportunity

New and transformative business environments and ecosystems will emerge. For instance, automobile companies are investing in streetlights with charging stations embedded in the post to reduce the infrastructure investment for automobile charging stations. Sensors allow these companies to identify vacant charge-parking spaces for their customers, communicated via mobile apps and on-board systems. They will also be the facilitators of the payment and transaction for ease of use.

While investment in IoT hardware is fundamental for smart cities, the real revenue opportunity for TSPs is in the services and analytics sector. “We expect that by 2020, many IoT TSPs will have grown their hardware revenues through services and software by more than 50percent,” said Tratz-Ryan.

Gartner further predicts smart-home security and safety will represent the second-largest service market by revenue in 2017, and that by 2020, the smart healthcare and fitness market will have grown to nearly $38 billion.