The IoT refers to a network of physical objects containing embedded technology to communicate with their internal states or the external environment.
The Internet of things, which excludes PCs, tablets and smartphones, will grow to 26 billion units installed in 2020, representing an almost 30-fold increase from 0.9 billion in 2009, according to a report from IT research firm Gartner.
The IoT refers to a network of physical objects that contain embedded technology to communicate and sense or interact with their internal states or the external environment.
The term encompasses hardware (the things themselves), embedded software, communications services and information services associated with the things.
IoT product and service suppliers will generate incremental revenue exceeding $300 billion, mostly in services, in 2020, and would result in $1.9 trillion in global economic value-add through sales into diverse end markets.
"The growth in IoT will far exceed that of other connected devices. By 2020, the number of smartphones tablets and PCs in use will reach about 7.3 billion units," Peter Middleton, research director at Gartner, said in a statement. "In contrast, the IoT will have expanded at a much faster rate, resulting in a population of about 26 billion units at that time."
Those who provide the hardware, software and services are referred to in the report as IoT suppliers. Gartner estimated the incremental IoT supplier revenue contribution from IoT in 2020 at $309 billion.
Economic value-add, which represents the aggregate benefits that businesses derive through the sale and usage of IoT technology, is forecast to be $1.9 trillion across sectors in 2020.
The report noted that the verticals that are leading its adoption are manufacturing (15 percent), health care (15 percent) and insurance (11 percent).
"By 2020, component costs will have come down to the point that connectivity will become a standard feature, even for processors costing less than $1. This opens up the possibility of connecting just about anything, from the very simple to the very complex, to offer remote control, monitoring and sensing," Middleton said. "The fact is, that today, many categories of connected things in 2020 don't yet exist. As product designers dream up ways to exploit the inherent connectivity that will be offered in intelligent products, we expect the variety of devices offered to explode."
The banking and securities industry is expected to continue to innovate around mobile and micropayment technology using convenient point-of-sale (POS) terminals and will invest in improved physical security systems, while emerging connected sensor technology would lead to value creation in utilities, transportation and agriculture, the report noted.