GSMA: Connectivity to make up just 5% of $1.1tn IoT market

A new report from GSMA Intelligence has highlighted the need for telecommunications companies to better diversify their offerings in order to better capitalise on the fast-growing internet of things market.

According to the Global IoT Connections and Revenue Forecasts report, just 5% of the IoT market that is expected to reach a $1.1tn valuation by 2025 will be made up of connectivity revenue.

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“The IoT revenue opportunity is shifting away from simply connecting devices to addressing specific sectors with tailored solutions, and successful ecosystem players will need to adapt their business models in line with these market trends,” said Sylwia Kechiche, Principal Analyst, IoT, GSMA Intelligence.

Instead, GSMA predicts that the applications, platforms and services segment will be the most significant sector within the IoT industry, capturing roughly 68% of the total market by 2025.

This category spans cloud, data analytics and security services, including offerings such as system integration, management and consultancy.

“It’s well understood that connectivity will represent only a fraction of the total IoT opportunity,” said Peter Jarich, Head of GSMA Intelligence.

“Complementing our IoT connections data with this major new dataset and analysis on IoT revenue provides a comprehensive and realistic view on where market opportunities exist for operators, vendors, integrators, and everyone else playing in the IoT ecosystem.”