According to a report by ABI Research, a market-foresight advisory firm providing strategic guidance on transformative technologies, IoT technology revenues across 12 key smart city technologies and verticals will grow from nearly $25 billion in 2017 to $62 billion in 2026 at an average growth rate of 11 percent. The fastest growing verticals include EV charging stations and micro-grids, smart waste management and environmental sensors, smart parking, and smart street lighting.
Smart cities use data and technology to create efficiencies, improve sustainability, create economic development and enhance quality of life factors for people living and working in the city. It also means that the city has a smarter energy infrastructure. Data collected from citizens, devices, and assets are processed and analyzed to monitor and manage traffic and transportation systems, power plants, water supply networks, waste management, law enforcement, information systems, schools, libraries, hospitals and other community services.
“Interest in and focus on Smart Cities [has] skyrocketed in 2017, with a very large number of vendors from across the value chain repositioning and optimizing their IoT portfolios to take advantage of this beckoning opportunity,” says Dominique Bonte, Vice President at ABI Research. “By its very nature of aggregating a wide range of solutions and technologies, the Smart Cities segment offers the perfect environment for suppliers to offer horizontal IoT platform solutions and addresses a recent trend toward more holistic, cross vertical approaches.”
The higher levels of value chain, including applications and services, analytics and AI, and security reap the largest rewards for IoT revenue categories. Whereas connectivity, sensor and device management, as well as professional services, represent decreasing opportunities against a background of increasing platformization and commoditization.
Some key smart city IoT solutions and platforms include Cisco’s Kinetic for Cities, InterDigital’s Chordant, PTC’s ThingWorx, Microsoft’s CityNext, Huawei’s OceanConnect, Nokia’s Impact, NVIDIA’s Metropolis, Verizon’s NetSense (sensity), Simen’s MindSphere, IBM’s Watson IoT, SAP’s Leonardo and Amazon’s AWS IoT platform. The critical success factors for these solutions and platforms will rely on flexibility, extensible service offers (i.e. pay-as-you-go offers), financing and ecosystem support, standards-based interoperability, and guaranteed technology lifecycle management.
The objective of smart cities is to provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘smart’ solutions. In recent years, we’ve seen an incredible growth in smart homes, therefore smart cities only makes sense to be the next few steps in the takeover of the IoT.