Chinese manufacturers to spend US$127.5 billion on IoT by 2020

Rebecca Gibson
Rebecca Gibson
By Rebecca Gibson on 05 September 2016
Chinese manufacturers to spend US$127.5 billion on IoT by 2020

Chinese manufacturers are expected to spend US$127.5 billion on the internet of things (IoT) by 2020, according to IDC China.

IDC’s China Manufacturing IoT Market Forecast, 2016-2020 found that IoT spending will grow by a compound average growth rate of 14.7% from 2016-2020, as China’s manufacturing industry shifts from production to services. Software and services will lead the way for IoT spending with a combined market share of over 60%.

“Many Chinese manufacturers have started to implement an IoT strategy with a view to improving their production and operational efficiency and speeding up their transformation from production to services,” said Wang Yue, senior research manager at IDC China. “With the promotion of smart manufacturing, the fast integration of IT and operational technology, and the prevalence of the ‘digital twin’ concept, IoT technology will have more room for development in the manufacturing industry.”

The report predicted that as more enterprises aim to develop smart manufacturing they will use IoT platforms to manage and connect production equipment, as well as to manage enterprise applications, enterprise information display and reporting platforms.

In addition, IoT applications and data analytics are expected to accelerate the in-depth integration between IT and the manufacturing industry to improve enterprises’ R&D, production, operation, marketing and management. Continuous breakthroughs in machine learning technology will also promote faster and more accurate data analysis in the manufacturing industry.

As more IoT devices are deployed on a large scale, IDC expects that data filtering and processing through scattered devices and IoT gateways will become an important direction for IoT applications in the manufacturing industry. Meanwhile, data will gradually become an important asset for enterprises. Edge intelligence will ensure data security and help enterprises to avoid risks when there are network or data centre malfunction.

“The combination of IoT with cloud computing, mobile technology, big data and other emerging digital technologies will further release the potential of IoT and lay a solid technological foundation for establishing a closed IoT ecological loop” Wang Yue said. “We believe that with the gradual maturing of the ecosystem, IoT platform-based industry and sub-industry applications will grow faster in the future.”

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