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October 5, 2012

Number of Internet connected devices to reach 28 billion by 2020: report

About 75% of the connected devices comprise, “existing connected devices” including fixed and mobile communications, computers, and consumer electronics

By CBR Staff Writer

The number of Internet connected devices to reach 28 billion by the end of 2020 rising from 9.6 billion units by the end of 2012, according to IMS Research.

According to the report, "The World Market for Internet Connected Devices – 2012 Edition", the third wave of connected device growth is speeding up and this is expected to boost the market further.

About 75% of the connected devices comprise, "existing connected devices" including fixed and mobile communications, computers, and consumer electronics.

The number of existing connected devices is expected to shrink and estimated to account for half of the total connected devices by 2020, with internet connectivity expanding to sectors like medical, industrial, and automotive.

The sectors which offers significant growth opportunities as devices which are not internet connected could be integrated to internet protocol (IP) addressable connectivity and processing technology in coming years to enable them to be internet connected.

IMS Research associate director Bill Morelli said there are a number of key drivers behind the push to make more devices IP addressable.

"These include impressive advances in processor technologies, especially low power processors which will be critical for many previously unconnected industrial devices," Morelli said.

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"Much of this equipment does not have ready access to power and will need to rely on batteries, driving this need for highly efficient, low-power processors."

Other drivers for the growth include transition to internet protocol version 6 (IPv6) from internet protocol version 4 (IPv4) which will make available more number of unique IP addresses.

IMS Research said that IPv4 protocol can accommodate a maximum of about 4.3 billion unique addresses, which have already been used up while IPv6 transition can accommodate greater number of unique addresses.

Aggressive rollout of next generation cellular networks will give increase the number of connected devices as devices like tablets and laptops will be requiring higher speed networks and higher bandwidth for rich media streaming.

When considering the potential for cloud based services and applications, the capabilities of LTE networks are a significant driver, the report revealed.

Though the huge growth forecast, there could be some uncertainty related to how long this market will take to fully realise.

"When considering the near-term forecasts in particular, it is important to consider the global economic climate and how that will impact the near-term prospects for connected devices," adds Morelli.

"In particular, the next two to three years will see slower uptake as a result of some macro-economic factors. This includes a sluggish housing market which will have an impact on equipment categories such as home automation, smart appliances, and smart metering."

"Industrial spending on capital expenditures is also forecast to be lower, which translates to more infrequent equipment upgrades and slower implementation for new technologies."

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