So which are the key areas that will be influenced by the Internet of Things (IoT) in the Asia Pacific Region (APAC) in the coming days? While everybody has answers, here is an outlook provided by noted global consultancy firm Frost & Sullivan for 2015.
According to Andrew Milroy, Senior Vice President, ICT Practice, Asia Pacific, at Frost & Sullivan, “By 2017, the Internet of Things (IoT) market will be one of the fastest growing segments in the Asia Pacific technology industry. The total Asia Pacific spending on IoT spending is forecasted to be US$59 billion by 2020. This offers real opportunities, especially in areas of manufacturing and consumer technology, which are expected to be two of the fastest growing segments over the next two years.”
Key industries that were likely to undergo IT driven transformations include Energy (Smart Grids), Media (Content Streaming) and Manufacturing (3D Printing), all of which will be influenced by the IoT.
Besides manufacturing, the wearables market was also experiencing strong growth. According to Frost & Sullivan, the global wearable technology market was estimated to be US$8.58 billion in 2014 and would reach US$38 billion in 2017 with a CAGR of 34 per cent from 2014 to 2018. According to Milroy, the Asia Pacific region accounted for just over 4 per cent of the global market, and, compared to other mature markets, would lag behind in the uptake of wearables.
“It is expected that wearables such as smart watches and smart glasses with a wider range of functions will eventually overtake all other wearable devices to adopt a premium position in the market. Smart glasses are anticipated to do extremely well, with many promising application opportunities across industries such as healthcare and manufacturing,” noted the senior Frost & Sullivan executive, in a statement.
Many agree that 2015 may be the year of “software-defined everything” as the software defined revolution spreads beyond the boundaries of the data centres. Programmable networks will enable the creation of new business applications and services which will drive efficiencies and new service models.
But Frost & Sullivan feels the adoption of the IoT may, however, not be “without its challenges”, as there were several hurdles that could prevent it from achieving rapid growth, including security and information privacy.
Mobile was one of the key areas that the research agency said, will be influenced by the IoT in 2015. Traditional mobile communications comprising voice and non-voice (mobile data and SMS services) was estimated to be US $567 billion in 2014. Frist & Sullivan expect the market to grow, albeit at a “modest rate” of 2.7 per cent over a 5-year CAGR to reach US $627 billion by 2018. To buffer the decline in voice and SMS, data consumption was expected to drive revenue growth across most of Asia, with key factors including LTE services, smartphone proliferation and an increase in the consumption of multimedia Content such as real time gaming and video entertainment; all of which are bandwidth intensive especially for larger screen devices.
Ajay Sunder, Vice President of Telecoms, Frost & Sullivan, Asia Pacific, pointed out that data driven devices, rise of the digital consumer and declining revenue per unit of data were key trends that service providers should take note in devising their strategy in the digital era.
Smartphone penetration across the APAC region was steadily rising, along with a growing number of smart devices. These data driven devices were accelerating the shift from voice to data usage transition.
“The multi-screen trend continues as consumers benefit from declining prices especially with popularity of new brands such as Xiaomi. Rising smartphone users are causing a faster shift from voice heavy users to data heavy users especially in the more developed markets,” said Sunder.
“Vendors that are able to support the seamless sharing of content and applications across multiple devices will have an advantage. Nevertheless, with the recent popularity of phablets (hybrid of smartphones and tablet), there is a trend towards multi-tasking on a single device,” he added.
The Frost & Sullivan team felt as the growth in data was leading to an increase in ARPU for operators, revenue per incremental MB was declining. Operators were thus buffering the decline with multi-SIM packages to take advantage of the multi-device trend. However, the consolidation of devices via a phablet may challenge that strategy.
2015, according to well-known research agency, could also see the rise of the digital consumer. The usage of social media was becoming more prevalent across Asia with Facebook being the most popular social media platform in many countries. In view of the fact that 59 per cent of the 3.2 million Internet users in Singapore used Facebook for example, service providers were increasingly leveraging upon social media platform as an important tool in their promotion and marketing campaigns.
“Besides social media, there is a growing necessity for service providers to re-evaluate their reliance on traditional mobile services and invest in new areas of growth. The Internet of Things offers opportunities across different industry verticals such as transportation because the service provider sits right in the middle of the eco-system,” said Sunder.
“Service providers have to move beyond their comfort zones and establish partnerships with third parties such as vendors, device makers and chip set modules providers in developing an ecosystem that will incentivise the proliferation of value-added service that consumers and enterprises are willing to pay to fill the void in traditional revenue.”
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Image Credit: Frost & Sullivan
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