IDC: LatAm connecting objects faster than global average
Tech consultancy IDC estimates that the number of connected objects in Latin America will grow to 827mn in 2020 compared to 244mn in 2014, Latin America research director Diego Anesini told journalists at a press conference.
This equates to a CAGR of 22.5%, outstripping the 19.2% CAGR expected globally, which will lead to 30bn connected objects in 2020, compared to 10bn in 2014.
IDC also estimates that spending on Internet of Things (IoT) projects in Latin America will reach US$8.8bn this year, up 14.3% from US$7.7bn in 2014. Chile alone spent US$300mn on IoT projects in 2014.
IDC has previously estimated that global spending on IoT solutions will grow to US$1.7tn in 2020 from US$656bn in 2014, giving a 16.9% CAGR.
The consultancy believes that IoT modules (sensors) and connectivity costs account for 50% of global IoT investment today, with IT services, security, data center services, big data analytics and management platform investments driving the other 50%.
Tata Consultancy Services (TCS) recently estimated that large companies in Brazil and Mexico will spend 0.23% of their total IT budgets on IoT initiatives in 2015, which is much less than the percentage that companies in Asia-Pacific, Europe or North America will assign.
However, TCS found that so far Latin American firms have obtained better results with IoT projects than firms in those other regions, with firms in LatAm increasing their revenue by approximately 18%.
IDC's research shows that at present 85% of the IoT market in Latin America is driven by projects in five sectors – Transport, Manufacturing, Government, Retail and Utilities – in the form of 10 use cases, such as smart grid, connected cars, fleet tracking and security.
Asked about the possibility of other Latin American countries emulating Brazil's initiative to work on a national IoT plan, Anesini told BNamericas that the Brazilian case is driven more by the decentralized nature of government in that country, whereas Chile and Argentina, for example, already have much more concentrated government systems.
Also, there are specific circumstances in Brazil, such as relatively high taxes on activation of M2M modules' SIM cards, which merit central government intervention. To this end Brazilian legislators are working on a bill to cut such taxes, he added.
IDC Chile telecommunication research manager Patricio Soto noted that in Chile, more than a national plan for IoT, the country needs a formal declaration of smart city goals and a roadmap of how to achieve them, so as to integrate the many localized initiatives that are underway.
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