Industrial IoT Market by Component (Hardware, Platform, Services, Connectivity), Industry (Agriculture, Manufacturing, Energy & Utilities, Oil & Gas, Aerospace, Retail, Transportation & Logistics, Others) Geography - Global Forecast to 2031

The Industrial IoT Market accounted for $105.4 billion in 2023. This market is expected to reach $408.2 billion by 2031, at a CAGR of 19.3% from 2024 to 2031.

Industrial IoT Market Size & Forecast

The growth of the industrial IoT market is primarily driven by favorable investment scenarios in Industry 4.0 technologies, government initiatives to promote industrial automation, and the growing need to improve productivity and efficiency. However, the lack of standardization and the high capital and OpEx requirements restrain the growth of the IIoT market.

The increasing utilization of Industrial IoT for predictive maintenance and the founding of new data centers are expected to create market growth opportunities. However, the exposure of IoT devices to cyberattacks and the lack of trained specialists pose major challenges for market growth. Additionally, the rising popularity of IIoT digital twins, the emergence of edge computing, and the rising adoption of smart manufacturing-as-a-service are some of the major trends in this market.

Industrial IoT Market Growth Drivers

Rising Investments in Industry 4.0 Technologies

Industry 4.0 technologies offer enhanced productivity, efficiency, knowledge sharing & collaborative working, flexibility, and agility, reducing production costs. These benefits have encouraged both public and private sector players to invest heavily in transforming their manufacturing facilities. Industry 4.0 has increased the adoption of digital technologies, such as automation, data analytics, and IIoT, transforming economies, production systems, and the delivery of goods and services. This transformation has important implications in terms of industrial development, skill requirements, and global value chains.

In March 2022, the World Economic Forum announced adding 13 new sites to its Global Lighthouse Network, a community of 103 world-leading manufacturing facilities and value chains using Fourth Industrial Revolution technologies to increase operational performance and environmental sustainability. In this global network, 66% of lighthouse companies, including Janssen (Italy), Sanofi (France), BOE Technology Group (China), Schneider Electric (India), and Unilever (India), made sustainability improvements by reducing consumption, resource waste, and carbon emissions, and increased productivity by 82%.

From 2021 to 2027, the European Commission (EU) announced plans to invest USD 10.8 billion (EUR 9.2 billion) to shape and support the digital transformation of Europe’s society and economy. In 2021, India’s manufacturing sector invested approximately USD 6.5 billion in its Industry 4.0 transformation. In September 2020, the U.S. allocated more than USD 1 billion to establishing 12 new research & development hubs for AI and quantum information science (QIS) throughout the country. Similarly, in February 2021, Singapore announced plans to provide USD 18.1 billion over the next three years to help local businesses innovate and build the capabilities needed to take them through the next transformation phase with the adoption of emerging technologies, including 5G, artificial intelligence (AI), and cybersecurity. Such investments are expected to drive the growth of the global IIoT market during the forecast period.

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Government Initiatives to Promote Industrial Automation

Major economies across the globe are implementing Industry 4.0 technologies, including IoT, artificial intelligence, robotics, cloud, and analytics, to transition to smart manufacturing. Incorporating industrial IoT technology improves connectivity, output, and resource utilization, resulting in higher efficiency. Therefore, governments worldwide are encouraging the adoption of disruptive technologies to promote industrial automation. Initiatives such as tax benefits, R&D investments, and the organization of promotional ventures & platforms are some of the several steps taken by governments worldwide to promote industrial IoT technology.

Considering the potential of IoT, governments are increasingly adopting the technology for various applications. For instance, the Government of India has undertaken numerous initiatives, such as Digital India, Make in India, and smart city projects, stimulating the adoption of emerging technologies, including the IoT. These initiatives have encouraged several organizations to develop innovative and advanced-technology-enabled IoT solutions for commercial and industrial applications, driving the growth of the IIoT market.

Apart from policy charting, governments worldwide have also announced investments in Industry 4.0 technologies. In October 2021, the Thailand Board of Investment (BOI) approved incentives to encourage companies to speed up their Industry 4.0 transformation. Such government initiatives are expected to propel the growth of this market.

Industrial IoT Market Growth Challenges

Vulnerability Issues with IoT Devices

In today’s modern connected world, data breaches have become one of the biggest areas of concern for both users and service providers. Security is an important consideration in the adoption of IoT technology. Despite the numerous benefits, industrial IoT architecture is highly susceptible to data theft and breaches. Also, distributing data across large networks with numerous devices and data centers operating far from company premises can create problems in network visibility and control. Similarly, several IoT devices have limited authentication and encryption capabilities, making them highly susceptible to tampering, eavesdropping, malicious congestion, and identity forging.

Cybersecurity is essential to the implementation of IIoT since the consequences of poor security go well beyond financial and brand harm. Millions of linked gadgets are at risk with an ever-expanding attack surface. Also, many IIoT networks have direct access to enterprise resource planning systems, including sensitive information and even company trade secrets. Any large-scale cyberattack can lead to dire consequences.

Industrial IoT Market Growth Trends

Rising Popularity of IIoT Digital Twins

Digital twins are extremely detailed digital models that use IoT-powered sensors to update the digital model based on real changes in the source object. Digital twin use cases coupled with powerful analytics and simulation capabilities are being adopted across value chains.

Industrial automation is undergoing a digital revolution as Industry 4.0 & Digital Twin technologies introduce new and innovative ways to execute manufacturing processes. A digital twin allows industrial manufacturers to create digital models of real machines and then combine both digital and physical data to deliver a better understanding of the performance and potential value of those physical machines. Digital twins are frequently implemented as part of IIoT in manufacturing, especially because they enable more remote workforce flexibility and provide real-time status updates on field devices.

Deploying a digital twin on an IIoT platform reduces maintenance costs. Once installed in the field, an IIoT-connected device paired with a digital twin can reduce lifetime maintenance costs by 20%. Manufacturers and other companies are gradually realizing the value of combining IoT and Digital Twin technologies. According to industry experts, 13% of organizations implementing IoT projects already use at least one Digital Twin; 62% are either establishing or planning to establish a Digital Twin alongside IoT processes. Thus, digital twins are gaining traction within the IIoT landscape as they allow companies to leverage process data, enabling accurate insights into operational inefficiencies.

Industrial IoT Market Analysis: Key Findings

The Hardware Segment to Dominate the Industrial IoT Market in 2024

Based on component, the industrial IoT market is segmented into hardware, platforms, services, and connectivity. In 2024, the hardware segment is expected to account for the largest share of 32.2% of the industrial IoT market. The large market share of this segment is attributed to the continuous efforts of organizations in the industrial sector to enhance efficiency, reduce costs, and improve Overall Equipment Effectiveness (OEE) through improved access to real-time information. Moreover, the increasing focus of key players on product development and rising investments in the digital transformation of industries are expected to drive the demand for IIoT hardware.

However, the platforms segment is expected to record the highest CAGR during the forecasted period. The rising adoption of industrial IoT platforms by different industry verticals to improve operational efficiency, along with the increasing need for superior monitoring technologies, is driving the growth of this segment. In addition, the rising focus of key players on product development and enhancement is expected to drive the growth of the platforms segment.

The Manufacturing Segment to Dominate the Industrial IoT Market in 2024

Based on industry vertical, the industrial IoT market is segmented into agriculture, manufacturing, retail, energy & utilities, oil & gas, aerospace, transportation & logistics, telecom, and other industry verticals. In 2024, the manufacturing segment is expected to account for the largest share of 24.5% of the industrial IoT market. Moreover, the manufacturing segment is expected to record the highest CAGR during the forecast period. The large market share of this segment is attributed to the application of automation and robotics in the production lines to enhance quality, reduce production time, and improve equipment reliability.

Furthermore, the need for centralized monitoring and predictive maintenance of assets, the increasing number of smart factories, the advent of Industry 4.0, and the increasing adoption of autonomous robots for industrial automation contribute to this segment's significant market share.

Geographic Analysis

Based on geography, the industrial IoT market is segmented into five major geographies, namely, North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa. In 2024, Asia-Pacific is expected to account for the largest share of 38.2% of the industrial IoT market. The large share of the region is attributed to factors such as the rising demand for automation across various sectors in the region, the increasing adoption of industrial robots, the advent of Industry 4.0, the growing adoption of cloud-based industrial solutions, and the presence of prominent market players in the region.

Asia-Pacific's industrial sector contributes significantly to the economy and is undergoing a rapid transformation. The growing adoption of disruptive technologies such as AI, machine learning, and IoT drives cloud adoption across the region, accelerating the demand for cloud-based industrial IoT solutions. Furthermore, Asia-Pacific is at the center of various government initiatives and strategic growth plans of several leading vendors operating in the industrial IoT market. Moreover, Asia-Pacific is expected to record the highest CAGR of 19.8% during the forecast period.

Industrial IoT Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last three to four years. Some of the key players operating in the industrial IoT market are ABB Ltd. (Switzerland), General Electric Company (U.S.), Emerson Electric Co. (U.S.), Intel Corporation (U.S.), Cisco Systems, Inc. (U.S.), SAP SE (Germany), IBM Corporation (U.S.), Honeywell International Inc. (U.S.), Amazon Web Services, Inc. (U.S.), Siemens AG (Germany), Huawei Technologies Co, Ltd. (China), Rockwell Automation, Inc. (U.S.), PTC, Inc. (U.S.), Dassault Systèmes (France), Robert Bosch GmbH (Germany), KUKA AG (Germany), Microsoft Corporation (U.S.), Schneider Electric SE (France), Advantech Co., Ltd. (Taiwan), and C3.ai, Inc. (U.S.)

Industrial IoT Industry Overview: Latest Developments from Key Industry Players

• In September 2023, Intel Corporation (U.S.) launched industrial IoT processors and software packages for various industries.
• In June 2023, ABB Ltd. (Switzerland) and China Telecom, the world's largest and leading communication service operator, started a joint digitalization and industrial IoT laboratory in Hangzhou, China.
• In March 2023, Samsung (South Korea) announced an investment to enable smart manufacturing capabilities at its largest mobile phone plant in Noida (India) to make production more competitive.
• In June 2022, Moxa (Taiwan) launched the new AIG-300 Series of Industrial IoT gateways, optimized for seamless integration with the Microsoft Azure IoT Edge computing platform.
• In January 2021, Microsoft Switzerland (Switzerland) partnered with Swiss Smart Factory (Switzerland) to accelerate digital transformation in the country's manufacturing industry.

Industrial IoT Market Research Summary

Key questions answered in the industrial IoT market report: