How Much Value Can The Internet Of Things Add For AT&T? Posted on : Oct 09 - 2015

The Internet of Things (IoT) has been touted as the next big thing for the technology industry, driving growth for a broad spectrum of tech companies ranging from semiconductor manufacturers to cloud computing providers and software developers. IoT is expected to benefit wireless carriers as well, as their networks provide connectivity for a growing number of networked devices. AT&T is betting big on the space, as it looks to find new avenues for growth amid increasing saturation in its bread-and-butter mobile business. In this note, we take a look at what AT&T is doing in the IoT space and examine how much value the trend can add for the carrier and the broader wireless industry.

How Big Is The IoT Market?

The term Internet of Things refers to the idea that everyday products ranging from home appliances to industrial equipment are connected to the Internet and are able to communicate with one another, broadly helping to improve efficiency and convenience. The Internet of Things market is expected to nearly triple to $1.7 trillion by 2020, according to IDC, with devices, connectivity and IT services accounting for a bulk of the market value. The installed base for IoT devices is projected to grow from roughly 10 billion connected devices today to as many as 30 billion devices by 2020. The second-order effects of the technology are also likely to be massive, and the McKinsey Global Institute estimates that IoT could have an impact of as much as $6.2 trillion on the global economy by 2025. While the various research studies vary in terms of the exact estimated market sizes and impact, it is clear that the long-term opportunity is very large for tech companies.

What’s In It For Wireless Carriers?

It’s slightly more difficult to size up the IoT opportunity for wireless carriers. Although there are billions of connected devices deployed globally, only a fraction of these devices require the wide-area cellular connectivity provided by wireless operators. A bulk of the devices – such as connected appliances and industrial products – could operate on shorter-range communications technologies such as Wi-Fi. With that said, the addressable market for carriers could still be sizable, since the potential for embedding networked intelligence spans from automobiles to logistics to civic infrastructure. Over the long term, it’s possible that the cellular device connectivity market (excluding smartphones and tablets) could actually surpass the broader mobile phone services market in terms of number of connections. View More