IOT IN MANUFACTURING MARKET ANALYSIS

The global IoT in manufacturing market size was valued at US$ 198.8 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 18.4% from 2023 to 2030. The market is driven by the growing need for automation, increasing inventory management technologies, and increased demand for higher production efficiency. In the global IoT in manufacturing market, the deployment of smart technologies is facilitating automation processes that aid in lowering costs, decreasing time to market, and enabling mass customization. These factors are driving the growth of the market.

Global IoT in Manufacturing Market: Regional Insights

North America is projected to gain major growth in the global IoT in manufacturing market over the forecast period. The region is witnessing rapid growing of enhanced operational efficiency, optimization of asset utilization, productivity, reduced downtime, and new business start-ups. Moreover, most of the production facilities in the region are early adopters of modern technologies and machines due to which it is easier for these companies to turn to smart manufacturing, as compared to remain with conventional manufacturing methods. Thus, the region is likely to show substantial growth in the global IoT in manufacturing market over the forecast future.

Furthermore, Europe is also anticipated to gain significant growth in the global IoT in manufacturing market over the forecast period, owing to growing popularity of smart manufacturing in the region. Moreover, governments across the region are promoting use of novel technologies in manufacturing sector. Thus, the region is likely to show strong growth in the coming future.

Figure 1: Global IoT in Manufacturing Market Share (%), By Region, 2022

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Global IoT in Manufacturing Market Drivers:

Increasing technological developments in data analytics to drive growth of the market

The adoption of connected devices and sensors is increasing rapidly all over the world, and it is enabling M2M communication. With this, the amount of data produced in the manufacturing industry is growing significantly. This data can be of different kinds, ranging from metric showing time required for a material to pass through one cycle of process or even more advanced data, like calculating the material stress capability in the automotive industry. As a result, the need for advanced data analytics solutions is increasing in manufacturing industry, which is expected to drive growth of the global IoT in manufacturing market over the forecast period.

Constant evolution of value chain to fuel the market growth

Manufacturing is an important component of end-to-end supply chain of any company. There is a shift among value chain stakeholders such as inventor managers, raw material suppliers, and manufacturers from manual product, tracking to using barcode scanners. These stakeholders are also investing in novel technologies such as sensors and RFID for monitoring production processes, stock, and ascertain the need for maintenance in order to take action before the quality of production gets affected. In turn, the need for IoT is increasing in manufacturing sector, which is further projected to drive growth of the global IoT in manufacturing market over the forecast period.

Global IoT in Manufacturing Market Opportunities:

Growing adoption of IoT in manufacturing sector is expected to create growth opportunities in the global IoT in manufacturing market over the forecast period. Manufacturers are increasingly adopting IoT technologies to increase production efficiency, reduce lead times, and to deliver customized products to their consumers. Due to this the adoption of IoT along with other digital transformation technologies is increasing among manufacturers to maintain a competitive edge in the market. This in turn is creating various lucrative opportunities in the market.

Rise in adoption of mobile IoT devices across several companies is projected to offer growth opportunities in the global IoT in manufacturing market over the forecast period. With increasing number of connected devices, the adoption of IoT mobile devices is likely to increase across companies to enable digitalization in factory assets, such as processes, vehicles, equipment. The use of IoT devices is also likely to enable connectivity of factory with the third-party suppliers, which forms a connected ecosystem of smart manufacturing facilities in the world. Thus, the market is expected to witness growth opportunities in the market.

Global IoT in Manufacturing Market Trends:

Growing adoption of data analytics, transparent connectivity, and augmented reality is a recent trend

Manufacturers around the world are increasingly adopting novel technologies such as adopt data analytics, transparent connectivity, and augmented reality for increasing productivity due to evolution in manufacturing facilities is driving the demand for IoT devices. For instance, as per the government of China, Industrial IoT will increase to value nearly US$ 65 billion by 2020. Moreover, the government of Japan granted approval of a plan known as the Rebirth of Japan that outlines the route toward strengthening the manufacturing sector further through targeting the US$ 1.3 trillion development. Thus, this trend is likely to drive growth of the market.

Need for flexible factory is a growing trend in the market

The adoption of flexible factory will enable manufacturing as per the preference of customers and make changes in production ranging up to integration of novel machines at any time, without any significant effort. Moreover, the levels of machine use is increasing, due to which the resources consumption is likely to decrease. Thus, the need for flexible factory is increasing which is further expected to drive the demand for IoT technologies in the global IoT in manufacturing market over the forecast period.

Global IoT in Manufacturing Market Restraints:

Security concerns are likely to hinder the market growth

Manufacturing is one of the industries which is highly vulnerable to cyber attackers due to presence of vital data linked to government and company. As per the 2021 Manufacturing and Distribution Report, 550 organizations impacted by data breaches that occurred between March 2021 and March 2022. Attackers seek to steal intelligence on any novel technology, process, or product that can be used for selling them at a lower costs for improving profit margins. Due to this, the market growth is likely to be hindered in the coming future.

Lack of infrastructure, capital, and awareness to hamper the market growth

Many regions lack capital, infrastructure, and awareness about IoT and other advanced technologies. Several brands have lost their business in the pandemic period due to which they were left with the only option of surviving on limited resources of capital. This factor in turn is impacting the market growth adversely. Moreover, semi-automatic alternatives having affordable pricing is also restraining growth of the market.

Figure 2: IoT in Manufacturing Market Share (%), By Application, 2022

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Global IoT in Manufacturing Market Segmentation:

The global IoT in manufacturing market report is segmented into Software, Connectivity, Services, Application, and End User Industry.

Based on Software, the market is segmented into Application Security Software, Data Management and Analytics Software, Monitoring Software, Network Management, and Other Software Types. Out of which, Application Security Software is expected to dominate the global market over the forecast period and this is attributed to the growing connected devices and rise in data breaches that affect the overall plant performances. The adoption of application security software is thus increasing in manufacturing sector. This in turn is expected to drive growth of this segment in the coming future.

Data Management and Analytics Software segment is also expected to witness significant growth in the near future and this is owing to the increasing need to manage constantly growing amount of highly distributed data from different devices, systems, and applications. This is further creating challenges in data analysis and data management, which is requiring new approaches. As a result, the demand for data management and analytics software is increasing in manufacturing sector, which is expected to fuel growth of this segment in the coming future.

Based on Connectivity, the market is segmented into Satellite Network, Cellular Network, RFID, NFC, Wi-Fi, and Other Connectivity Types. Out of which, Satellite Network is expected to dominate the global market over the forecast period and this is attributed to the various advantages of using satellite network. The importance of satellite connectivity has increased immensely for the IoT, as a single network of satellite can offer coverage of the whole planet efficiently. Moreover, this type of network offer and undue advantage in places lacking fully developed infrastructure. Thus, adoption of satellite network is increasing rapidly, which is further likely to support growth of this segment.

Cellular Network segment is also expected to witness significant growth in the near future and this is owing to the popularity demand for cellular networks in manufacturing. These network play an important role in various IoT applications, along with offering the backbone for several applications. Due to various advantages offered by using cellular networks, the demand for this segment is growing rapidly, which is further driving growth of this segment.

Based on Service, the market is segmented into Professional Services, Managed Services. Out of which, Professional Services is expected to dominate the global market over the forecast period and this is attributed to the increasing adoption of professional service related to manufacturing industry. Many market players are offering professional service specific to manufacturing sector. For instance, AT&T provides several professional service covering IoT deployment services, consulting, and integrated solutions. Thus, with increasing adoption of professional service in manufacturing sector, the segment is likely to grow with rapid pace in the coming years.

Managed Service segment is also expected to witness significant growth in the near future and this is owing to the increasing adoption managed services. These service involve practicing outsourcing the responsibilities to specific team that helps to reduce operational cost through efficiently managing operations. With the use of IoT managed services, manufacturers can focus on core of their business and processes. Thus, adoption of managed services is increasing in manufacturing industry, which is further likely to support growth of this segment.  

Based on Application, the market is segmented into Process Optimization, Predictive Maintenance, Asset Management, Workforce Management, Emergency and Incident Management, Logistics and Supply Chain Management, and Inventory Management. Out of which, Process Optimization is expected to dominate the global market over the forecast period and this is attributed to the rise in need for IoT in process optimization in manufacturing sector. The use of IoT has increased with growing manufacturing operations getting connected. It is enabling manufacturers to reduce cost and maximize production. Thus, the demand for IoT is increasing in this segment, which in turn is driving growth of the segment.

Predictive maintenance segment is also expected to witness significant growth in the near future and this is owing to the various benefits of using IoT in predictive maintenance applications. Predictive maintenance delivers highly precise advance maintenance planning and avoids unpredictable breakdowns. With the use of predictive maintenance, manufacturers can reduce downtime, enhance safety, and extend life of equipment. These factors are in turn aiding growth of the segment in the global IoT in manufacturing market.

Based on End User, the market is segmented into Automotive Manufacturing, Food and Agriculture Equipment Manufacturing, Industrial Equipment Manufacturing, Electronics and Communication Equipment Manufacturing, Chemicals and Materials Equipment Manufacturing, and Other End-user Industries. Out of which, Automotive is expected to dominate the global market over the forecast period and this is attributed to the increasing growth of automotive industry, as the number of units produced every day is growing. The demand for IoT solutions is rapidly increasing in the industry. The connected automotive sector are increasing globally, which is a major factor driving growth of this segment.

Oil and Gas segment is also expected to witness significant growth in the near future and this is owing to the increasing challenges in complete value chain of oil and gas industry creating the need for technological revolution. Due to this, the demand for IoT technology is increasing in this industry, which is further expected to drive growth of the market over the forecast future.

Global IoT in Manufacturing Market: Key Developments

In January 2020, Cisco Systems Inc. launched an IoT security architecture, which offers improved visibility across both IoT and IT environments as well as project processes. The novel products allow collecting and extracting data from IoT edge, to increase efficiency of organizations in order for them to make better business decisions.

In February 2020, Smartfren, a leading telecom operator in Indonesia announced Cisco as its digitization partner for creating a multi-cloud architecture. This project could involve creating digital services data center architecture with integration of cloud services and cloud computing.

In February 2022, Cisco lunched updates to its portfolio of Internet of Things (IoT), to provide assistance to its service provider customers to offer a highly straightforward method for managing LPWAN/4G/5G IoT connectivity of developing and new use cases.

In April 2020, Haltian, received US$ 9.8 billion funding from Ilmarinen, and Nordic Option Haltian, Finnish venture capital. The company will use this funding for extending product portfolio and offer efficient solutions for smart factories, facilities, and washrooms.

Global IoT in Manufacturing Market: Key Companies Insights

The global IoT in manufacturing market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global IoT in manufacturing market are Cisco Systems Inc., SAP SE, General Electric, Microsoft Corporation, Intel Corporation, Siemens AG, IBM Corporation, Qualcomm, Verizon Communication Inc., and AT&T Inc.

*Definition: IoT connects physical objects to the Internet so that they can collect and share data. This is accomplished using sensors that monitor changes in the environment and actuators, which can take action based on those signals. IoT devices communicate with each other over wired or wireless networks.