Western European Internet of Things Spending Forecast to Reach Nearly $250 Billion in 2019, Representing 19% of the Worldwide IoT Spending.

Milan, December 16, 2015

According to a new International Data Corporation (IDC) Spending Guide, Western Europe spending on the Internet of Things (IoT) will grow at 21.8% compound annual growth rate (CAGR) from $113.5 billion in 2015 to nearly $250 billion in 2019, representing 16% of the Worldwide IoT Spending in 2015 (19% in 2019).

On a country basis, Top 5 Western European countries (i.e. France, Germany, Italy, Spain, UK) represent nearly 75% of the overall WE IoT Spending in 2015, driven by Germany and UK that represent 21% and 17% of total spending, respectively. UK, followed by France, will also be the fastest growing country in the next years (23.4% and 22.6% 2015-2019 CAGR, respectively).

"Germany is driven by a large demography base and by the Industry 4.0 revolution reshaping the Manufacturing landscape, while the UK’s fast growth follows its strong innovative attitude in the consumer and retail sectors. Thye Nordics region is also a front runner in terms of penetration rate for several IoT solutions, showing the way for other countries to follow." said Lionel Lamy, Associate VP and leader of the European IDC Internet of Things Ecosystem and Trends practice.

From a vertical industry point of view Manufacturing is the largest vertical segment, accounting for more than 20% of total European IoT spending, followed by Utilities. Over the 5 year forecast, we anticipate the Consumer market will take center stage, rising to almost 15% of 2019 WE IoT spending.

"Manufacturing and Utilities are on the front foot in terms of IoT spending in 2015, automation of manufacturing operations for the first and the smart meter revolution for Utilities led these two industrial sectors to take the lion's share of the market. Nevertheless the future will also be characterized by consumer related IoT products and the retail IoT in-shop revolution." said Andrea Siviero, Senior Research Analyst and co-leader of the European IDC Internet of Things Ecosystem and Trends practice.

From a technology perspective, hardware holds the largest share of the IoT market (more than 30%), driven by module/sensors deployment. Hardware technology will be closely followed by software, service and connectivity as the IoT wave will provide opportunities across the ICT sector.

As IoT applications and solutions could drastically change across vertical industries, having a use cases segmentation of the IoT market is essential:

  • Manufacturing Operations (Manufacturing), followed by Freight Monitoring (Transportation), will represent the two most relevant IoT use cases in terms of WE spending. While the first one is boosted by the German manufacturing leadership (representing 28% of the total WE Manufacturing Operations spending), France, UK, and the Netherlands count for nearly 40% of the Freight Monitoring WE spending.
  • Smart Grid (Electricity) is the third largest IoT use case in terms of 2015 WE spending. Thanks to a wide smart meter deployment in the last years, Italy leads the way, although also Nordics (led by Finland and Sweden) are on the same level in terms of smart grid and meters penetration rates.
  • Connected Vehicles, Smart Appliances, and NFC payment/shopping are the three most promising IoT use cases in terms of growth rates for the next years (although with different shares on the overall IoT WE spending) and will catch attention and investments of many players in the sector.

Western Europe Internet of Things Spending Forecast is part of the Worldwide Semiannual Internet of Things Spending Guide that forecasts country-level IoT technology spending across more than 40 use cases including automated public transit, remote health monitoring, digital signage, connected vehicles, smart appliances, and air traffic monitoring, among others. Unlike any other research in the industry, the comprehensive spending guide was designed to help vendors clearly understand the industry-specific opportunity for IoT technologies today.

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.

For more information about IDC's Spending Guides, please contact Monika Kumar at mkumar@idc.com.

Lionel Lamy
+44 020 8987 7150

Andrea Siviero
+39 02 28457 367