Covid-19 calculated to cause 18% drop in net new IoT devices in 2020

The internet of things (IoT) will be integral to the long-term recovery plans of the post-Covid-19 economy worldwide, but some facets of the IoT itself will be negatively impacted in the short term, says a study from ABI Research.

The global tech market advisory’s Assessing the impact of Covid-19 on the IoT market application analysis report calculates that 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 IoT devices in 2020.

The study says Covid-19’s impact on the IoT will be threefold and that some applications will experience a decline in shipments in 2020, bringing about a reduction in the expected growth rate to their installed base. It adds that others will experience fundamental shifts in demand, both positive and negative, for years to come as enterprise priorities change in the light of Covid-19.

Yet, with no intrinsic change to the applications’ desirability and utility, ABI forecasts that there will be a return to expected growth in subsequent years and that those that do experience a temporary stall in 2020 will be compensated by increased activity immediately after, bringing IoT installed base expectations back into line.

Looking at the expected 18% drop in the net addition of IoT devices in 2020, calculated in aggregate, and after the effect of replacement rates on shipments are taken into account, this would equate to the loss of 66 million potential wide area network (WAN) connections compared with previous forecasts.

ABI predicts that, proportionally, the most heavily impacted markets will be fleet and other heavy vehicles and equipment. These are expensive assets that enterprises are buying less of in the interests of cost control, it says.

Fixed assets, digital signage and kiosks also face huge impacts, as they are driven by the entertainment and retail sector, which has been effectively put on hold by the massive reduction in personal mobility and footfall, and increased emphasis on online shopping.

Looking at market segments where IoT growth will be most affected, ABI says that in the consumer space, the passenger vehicle and connected car markets are suffering considerably as people stay in place. Yet, it adds, by spending more time at home, improving the function and comfort of that environment is expected to boost smart home revenues.

By contrast, in the enterprise sector, ABI believes that while utility metering initiatives face delays as home visits are temporarily prohibited, they are expected to bounce back quickly. 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, it adds.

“We analysed 32 IoT applications – that’s 32 different types of connected device embedded in the fabric of the world around us,” said Jamie Moss, ABI research director for M2M, IoT and IOE. “Each provides information on where things are, what their status is, and what actions we must take.

“To be forewarned is to be forearmed and the mass use of microcontroller unit-based, low-power wide-area 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 is right for it to do so, to deliver planned results. And the need for guaranteed outcomes has never been more acute than now.”