Connected Devices in China Alone Worth Over $700B by 2020: GSMA

GSMA and Machina Research are forecasting a six-fold increase of connected devices in China — currently worth US$116 billion (S$147B) to $707 billion (S$899B) by 2020, bringing forth the Connected Life. Connected devices include smartphones, tablets, consumer electronics and devices that have machine-to-machine (M2M) connectivity. No, it’s not the Terminator’s Skynet taking over the world, it just means your car can communicate with your house and notify the wife your ETA home so she can get ready and meet you by the door. Your car can locate the nearest charging station and tell you to juice up or else you will be walking home.

(Image courtesy of GSMA and Machina Research)

This future may not be so far-fetched, because connected devices are driving innovation and advancement in crucial industries across Asia-Pacific. China is growing in huge spurts economically, and is leading all other countries in the connected devices segment. Michael O’Hara, GSMA Chief Marketing Officer explains why China leads the world in the Connected Life.

China is not only the world’s largest mobile market — with more than one billion total mobile connections, but is using this to its advantage by creating new applications, products and services that can improve people’s daily lives and advance its economy. China has positioned mobile technology at the centre of its expansion, from a booming car industry to the rapid development of new ‘smart’ cities, creating efficiencies and consumer benefits through cross-industry collaboration.

The $707 billion business impact of the Connected Life in China in 2020 will come from $393 billion (S$499B) in revenues and $314 billion (S$399B) in ‘cost reduction and service improvements’. Revenues will come from the sale of connected devices and services, plus revenues from related services, such as pay-as-you-drive car insurance, etc., Cost reductions will come from smart meters removing the need for manual meter readings. Service improvements might involve clinical remote monitoring for patients with chronic illnesses.

Connected vehicles will spark new business models in China. Tracking cars and implementing real-time charging will generate new businesses in rentals and vehicle purchases. Connectivity will soon be a standard feature — just like seat belts and airbags, because the demand for plug-in electric vehicles continues to grow. Machina Research sees these two areas (vehicle tracking and real-time charging) making $198 billion (S$251B) for China’s automotive industry by 2020.

In Asia, the growing security business for homes and private buildings will see improvements due to connected alarms, CCTVs and intercoms. This industry will see growth worth $62 billion (S$79B) in China by 2020. China’s utilities and essential services sector will soon grow to $37 billion ($47B) in eight years’ time. Smart metering will help reduce energy consumption, making it a must-have technology for businesses and households.

Matt Hatton, Director at Machina Research explains why China will lead the world in the Connected Life.

There is little doubt that the biggest impact in the region will be felt in China. As its economy continues to grow, China is increasingly turning to technological solutions to address some of the challenges caused by this growth, whether it is the use of smart meters to manage electricity demand, or road monitoring solutions to manage congestion caused by growing car ownership. The Chinese government has demonstrated its willingness to introduce innovative M2M technologies and embrace the Connected Life for the benefit of its citizens.

Japan will spend up to $344 billion (S$437B) for Connected Life devices by 2020. Its automotive and building security industries comprise a large chunk of its connected businesses, but the assisted living segment will see a significant boost. Its ageing population will benefit from interconnected devices that monitor homes, track people and oversee medications. This industry will earn up to $63 billion (S$80B) by 2020.

While India shares China’s requirements for connecting its vehicles and intelligent buildings — forecast to grow by $128 billion (S$162B) in 2020, the costs of implementing M2M technology compared to wages in India means humans will still be used in place of connected devices by 2020.

Mobile health services will constitute one of the top three applications for Connected Life in Australia, India and Pakistan by 2020. Health care services will need to be interconnected and mobile in order to provide adequate care for such widespread, fragmented and predominantly rural populations.

For highly developed Singapore, mobile technology will be used for tackling issues related to its growing, dense urban population. The smart cities and intelligent transportation programs of the Connected Life will generate $1 billion (S$1.2B) in business for the island state.

SOURCE: GSMA