The Internet of Things will drive wireless connected devices to 40.9 billion in 2020

According to an updated market forecast from ABI Research, the installed base of active wireless connected devices will exceed 16 billion in 2014, about 20 percent more than in 2013. The number of devices will more than double from the current level, with 40.9 billion forecasted for 2020.

Principal analyst Aapo Markkanen comments, “The driving force behind the surge in connections is that usual buzzword suspect, the Internet of Things (IoT). If we look at this year’s installed base, smartphones, PCs and other ‘hub’ devices represent still 44 percent of the active total, but by end-2020 their share is set to drop to 32 percent. In other words, 75 percent of the growth between today and the end of the decade will come from non-hub devices: sensor nodes and accessories.”

From every technology supplier’s strategic point of view, the critical question is how this plethora of IoT devices will ultimately be connected. Until recently, the choices that product OEMs have faced have been fairly straightforward, with cellular, Wi-Fi, Bluetooth, and others all generally addressing their relative comfort zones. Going forward, they will be in an increasing competition with each other, so for the suppliers the strategic stakes are getting much higher.

Practice director Dan Shey adds, “The recently introduced Thread protocol, spearheaded by Nest Labs, is the clearest example of this convergence. It is not only setting the bar higher for ZigBee in the 802.15.4 space, but also piling up pressure on Bluetooth suppliers to enable mesh networking. In the meantime, the LTE-MTC and LTE-M initiatives may well expand the market for cellular M2M, while startups like Electric Imp and Spark could do the same for Wi-Fi. And finally, we also shouldn’t ignore what’s going on with passive, proximity-based connectivity offered by RFID and NFC. For example, Thinfilm’s plans with printed electronics warrant attention.”

These findings are from ABI Research’s “Internet of Everything Market Tracker” product, and part of the Internet of Everything Market Research.