Covid-19 pandemic triggers 18% drop in new IoT devices in 2020

A combination of manufacturing shut-downs, supply chain interruptions, and changes in connected product availability and demand is expected to cause an 18% drop in the net addition of Internet of Things (IoT) devices in 2020, according to analyst firm ABI Research.

“Covid-19’s impact on the IoT is three-fold. Some applications will experience a decline in shipments during 2020, ergo a reduction in the expected growth rate to their installed base,” said Jamie Moss, research director at ABI Research.

“Yet, with no intrinsic change to their desirability and utility, they will return to expected growth in subsequent years. Some will experience a temporary stall in 2020 that will be compensated by increased activity immediately after, to bring things installed base expectations back into line. While others will experience fundamental shifts in demand, both positive and negative, for years to come as consumer and enterprise priorities shift in the light of Covid-19.”

In aggregate, and after the effect of replacement rates on shipments are taken into consideration, there will be an 18% drop in the net addition of IoT devices in 2020, ABI said. This equates to the loss of 66 million potential Wide Area Network (WAN) connections over previous forecasts.

Proportionally, the most heavily impacted markets will be fleet and other heavy vehicles/equipment. These are expensive assets that enterprises are buying less of in the interests of cost control. Fixed assets, digital signage, and kiosks also face huge impacts, as they are driven by a entertainment and retail sector that has been effectively put on hold by the massive reduction in personal mobility and footfall, and increased emphasis on online shopping.

In the consumer space, passenger vehicle and connected car markets are suffering considerably as people stay in place. Yet, by spending more time at home, improving the function and comfort of that environment is expected to boost smart home revenues.

For enterprise, while utility metering initiatives face delays as home visits are temporarily prohibited, they are expected to bounce back fast. At the same time, asset tracking, inventory management, and condition-based monitoring are all set for greater long-term investment to build better businesses that allow people to do more with less and to reliably run things remotely.

“At ABI Research, we analyze 32 IoT applications, that’s 32 different types of connected device embedded in the fabric of the world around us. Each provides information on where things are, what their status is, and what actions we must take,” Moss said.

“To be forewarned is to be forearmed and the mass use of Microcontroller Unit (MCU)-based Low Power Wide Area (LPWA) sensors can help us make a safer world, where we can quickly respond to threats. The IoT is a market that grows naturally as and when it right for it to do so, to deliver planned results. And the need for guaranteed outcomes has never been more acute than now,” Moss said.

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