Far from slowing down the IoT market, COVID-19 seems to have stimulated it

The Internet of Things, or IoT, is an enormous network of everyday items that can connect with each other and with other networks through wireless devices. The devices gather data from the item and its environment, and can transmit it to other connected items anywhere in the world. IoT devices can be fitted anywhere, including clothing, implanted medical devices, or a process plant’s raw mill, because there’s no need for wires.

The rising popularity of IoT is one of the many factors helping drive demand for 5G, which improves connectivity for IoT devices and supports edge computing to make IoT systems both faster and more secure.

Until COVID-19 struck, the Internet of Things (IoT) market had been growing steadily, with 14.9% Compound Annual Growth (CAGR) in the “Worldwide IOT spending guide” in November 2019, and driving growth in some of the stronger 5G stocks . But the pandemic threw a spanner in the works for the chip industry, particularly in China, disrupting supply chain, production, delivery, and deployment of the chips and semiconductors which power IoT devices. At the same time, COVID-19 caused a number of sectors which had previously been the biggest spenders for IoT items, including air travel, oil field exploration, and entertainment, to slash their budgets. As a result, IoT spending  grew just 8.2% in 2020, reaching an overall global market value of $742 billion.1

However, this downturn for 5G stocks is widely expected to be nothing more than a brief hiccup, with analysts agreeing that far from harming the 5G companies stock and IoT market, COVID-19 has accelerated adoption and stimulated demand in new sectors.

COVID-19 accelerated IoT adoption

COVID-19 brought a new urgency for tech that enables remote interactions, pushing the development, adoption, and acceptance of smart devices which monitor themselves and their environment, send data on for analysis, and increasingly decide on and carry out the correct course of action in response. Francisco Maroto, digital transformation solution architect at NI (National Instruments) Methodology Consulting Services, noted “The year 2020 has been a significant year in terms of the emergence of technologies leading to a much better space of [sic] IoT to flourish and grow.2

Adoption has grown across industries, with one survey finding that 47% of enterprises deployed IoT solutions in 2020 and an additional 39% intend to do so within the next 12-24 months. As organizations realize the strategic importance of IoT technologies, spending decisions are increasingly being made at the executive level, with 35% of companies saying that executives handle IoT decisions, in contrast to just 18% the previous year. The amount that enterprises expect to invest in the field is also rising, with twice as many companies saying they expect to invest $100,000-$1 million as in 2019 and 25% more saying they’ll be spending over $1 million.3

Erik Fossum Færevaag, founder and president of Disruptive Technologies, observed that “with the advent of Covid-19 and the unprecedented requirement for remote working, the need for smarter, faster technologies has accelerated the IoT beyond expectations. Providing not just new ways of working but new ways of managing a global crisis.4

IoT keeps industry operational during COVID-19

Manufacturing was hit hard by COVID-19 lockdowns and restrictions. Plants rely on experienced employees to spot failures, so they needed new ways to ensure that production continued smoothly. At the same time, demand fluctuated, requiring plants to increase visibility and refine plant efficiency so as to respond nimbly to changing circumstances.

Some industries chose to ramp up their industrial IoT (IIoT) connectivity for applications that enable plants to continue operating without placing the workforce in danger. Tools such as remote predictive monitoring and maintenance, digital twins, and robotic process automation (RPA) ensure that a remote workforce receives early alerts about anomalies and inefficiencies, to schedule repair jobs more conveniently for a skeleton on-site maintenance team and prevent minor issues from snowballing into major catastrophes.

“With the onset of the pandemic, suddenly we all were forced to work remotely. It was difficult for many of our customers to monitor their on-site systems, especially in industrial use cases. Essentially, they were flying blind for the first time. The need for visibility and the ability to remotely manage and control led to a huge acceleration in the adoption of industrial IoT,” said Harald Remmert, senior director of technology at Digi International5.

The benefits of IoT will help ensure that adoption continues even when the pandemic wanes. Gartner estimates that IoT-powered digital twins will save manufacturing businesses $1 trillion each year in asset maintenance, while the IDC advises that Global 2000 companies that use data from IoT connected assets to increase product innovation and organizational productivity will see gains of up to 25%.6

IoT helps healthcare keep up with demand

The global pandemic highlighted the need for remote health monitoring and care. Patients with severe COVID-19 needed round the clock monitoring and frequent adjustments to oxygen and pressure settings, without endangering healthcare personnel. It was also no longer possible for healthcare workers to supervise in person all the people in need of home health care.

IoT underpins innovation in telemedicine, automated home help, and wearable health devices. Forrester predicts an ongoing surge in wearable medical devices to track patient health, as the cost of devices drops, patients realize their convenience, and the surge in deaths from treatable cancers emphasizes the importance of early diagnosis and constant monitoring.7

IoT devices and edge computing enable better communication between healthcare providers, patients, and expert consultants who may be located some distance away. Long covid increased the number of patients with complex, multi-system, chronic health disorders that require specialist knowledge and extensive health data to treat correctly. Connected devices supply accurate, real time medical information to healthcare providers, who can then deliver more precise diagnoses and treatment recommendations.

The coronavirus also prompted a new look at cleaning and hygiene tools. A number of organizations began using connected IoT devices that use UV light to ensure higher standards of disinfection, as well as tools to check that cleaning routines are completed correctly.8

IoT makes a hybrid workplace possible

During the pandemic, organizations that couldn’t support remote working used IoT to create a safer working environment, and it’s expected that this will rise as people return to the office. Forrester predicts at least 80% of firms will use IoT in their new workplace strategies to improve employee health, enhance resource efficiency, and reduce energy consumption9. IoT sensors can track population density throughout the premises, ensure safe occupancy in high-traffic areas, and monitor ventilation and hygiene practices.

With remote work expected to continue to some extent, businesses are eager to use office space more effectively. When only a percentage of the workforce is in the office at any given time, there’s no need for a workstation for every employee. Office managers need to ensure the right resources are available for employees at the right times. One company, Atea, is already using IoT sensors in light fixtures to help employees locate open desks and meeting rooms.

IoT holds logistics together

When COVID-19 broke supply chains, it forced companies to embrace better logistics monitoring systems which deliver full visibility. Organizations need to know exactly where their goods are located at any given moment, what condition they are in, and where bottlenecks arise, so that they can make better transportation and storage decisions for the future.

Vaccine rollout depends on advanced cold chain and cold storage monitoring for the many vaccines that have to be stored at low and extremely low temperatures. Public health bodies and healthcare providers need to be certain their vaccines meet regulatory requirements, while public take up relies on confidence about their safety.

Other use cases driving IoT include consumer home IoT devices that automatically reorder products when supply runs low; fulfilment and inventory management in stores and ecommerce warehouses; and “smart cities” that use IoT to track pedestrian and traffic movements, allocate resources, and provide contact-free payment for public transportation.10

The outlook is bright for the IoT market

Forecasts for the market agree that the next 3-5 years will see significant growth. Statista figures show IoT spending reaching $1,000 billion in 2022, and $1,100 billion in 202311.

A graph showing an increase in IOT devices post covid-19

The IDC predicts a global IoT spending CAGR of 11.3% between 2020 and 202412. Berg Insight expects that cellular IoT module shipments will rise by 15.8% CAGR to 629.6 million units in 202513, and Research and Markets forecasts that revenues will increase at 21.3% CAGR between 2020 and 202614.

“Although the current pandemic forced many organizations to pause some innovative IoT deployments, IoT will be a key ‘return to growth’ accelerator with selected use cases being safe bets for end users to focus on in order to reach a new level of automation, remote everywhere experience, and hyper-connectivity,” said Andrea Siviero, associate research director with IDC’s Customer Insights & Analysis group15.

It appears that the only things restraining the explosion of growth in IoT are concerns about privacy and security. Fortunately, the tandem development of edge computing is helping address that. Edge computing reduces the need to pass sensitive data back and forth to the cloud and thus shrinks the number of opportunities for hackers to breach data streams.

It’s well known that crisis also drives innovation and creativity, and there are signs that this is what’s happening to IoT, edge computing, 5G technology, and related industries. With a number of companies rolling out new IoT and edge solutions and developing new products, 5G stock is ripe for speculation from investors who want to be part of the trend of disruptive technology and are hoping for positive returns.

1 “Worldwide Spending on the Internet of Things Will Slow in 2020 Then Return to Double-Digit Growth, According to a New IDC Spending Guide” June 18, 2020 https://www.idc.com/getdoc.jsp?containerId=prUS46609320

2 “2021 IoT Trends and Predictions: I expect an exciting year for IoT advancements in 2021, and you?” December 7, 2020 https://www.linkedin.com/pulse/2021-iot-trends-predictions-i-expect-exciting-year-you-maroto/?trk=public_post_promoted-post

3 “Eclipse: IoT and edge computing adoption is accelerating” June 9, 2021 https://iottechnews.com/news/2021/jun/09/eclipse-iot-edge-computing-adoption-accelerating/

4 “How Covid-19 accelerated the dominance of the Internet of Things” March 21, 2021 https://iotbusinessnews.com/2021/03/21/52141-how-covid-19-accelerated-the-dominance-of-the-internet-of-things/

5 “The Future of IoT is in Speed—and Security” June 9, 2021 https://www.machinedesign.com/automation-iiot/article/21166526/the-future-of-iot-is-in-speedand-security

6 “Rockwell Automation Predictions for 2021” November 20, 2020 https://iotbusinessnews.com/2020/11/20/50805-rockwell-automation-predictions-2021/

7 “Predictions 2021: Technology Diversity Drives IoT Growth” October 28, 2020 https://go.forrester.com/blogs/predictions-2021-technology-diversity-drives-iot-growth/

8 “XENEX Uses AT&T Connectivity to Help Destroy Viruses, Bacteria & Spores” April 7, 2020 https://iotbusinessnews.com/2020/04/07/81584-xenex-uses-att-connectivity-to-help-destroy-viruses-bacteria-spores/

9 “Predictions 2021: Technology Diversity Drives IoT Growth” October 28, 2020 https://go.forrester.com/blogs/predictions-2021-technology-diversity-drives-iot-growth/

10 “The 5 Biggest Internet Of Things (IoT) Trends In 2021 Everyone Must Get Ready For Now” October 26, 2020 https://www.forbes.com/sites/bernardmarr/2020/10/26/the-5-biggest-internet-of-things-iot-trends-in-2021-everyone-must-get-ready-for-now/?sh=6d13237a41fd

11 “Prognosis of worldwide spending on the Internet of Things (IoT) from 2018 to 2023” Statista, https://www.statista.com/statistics/668996/worldwide-expenditures-for-the-internet-of-things/

12 “Worldwide Spending on the Internet of Things Will Slow in 2020 Then Return to Double-Digit Growth, According to a New IDC Spending Guide” June 18, 2020 https://www.idc.com/getdoc.jsp?containerId=prUS46609320

13 “Shipments of cellular IoT modules exceeded 300 million units in 2020” June 9, 2021 https://iotbusinessnews.com/2021/06/09/60411-shipments-of-cellular-iot-modules-exceeded-300-million-units-in-2020/

14 “Global Internet of Things (IoT) Market (2020 to 2026) – Featuring 8power, ABB and Adaptive Wireless Solutions Among Others – ResearchAndMarkets.com” June 9, 2021 https://www.businesswire.com/news/home/20210609005688/en/Global-Internet-of-Things-IoT-Market-2020-to-2026—Featuring-8power-ABB-and-Adaptive-Wireless-Solutions-Among-Others—ResearchAndMarkets.com

15 “Worldwide Spending on the Internet of Things Will Slow in 2020 Then Return to Double-Digit Growth, According to a New IDC Spending Guide” June 18, 2020 https://www.idc.com/getdoc.jsp?containerId=prUS46609320