COVID-19 delivered a sizeable blow in slowing commercial IoT investment and adoption in the US over the past twelve months, with over one-third (36 percent) of USA organizations decreasing their investment plans in IoT and 33 percent canceling their IoT initiative altogether.
In isolation, these figures might cast a shadow around future IoT success. But globally, there continues to be considerable innovation and growth in IoT technologies, devices, applications, and services.
COVID-19 accelerated many critical IoT adoption trends already underway, driving IoT further into the global cultural and commercial mainstream. Many businesses continue to prioritize acceleration through digital transformation and scope new pastures in business development through fresh IoT initiatives that deliver increased profitability and new markets. Both consumers and businesses are increasingly moving towards connected, data-driven digital services and experiences. Not surprisingly, 2020 saw a noticeable shift in the companies adopting IoT to offer a more diverse choice of products and services.
Today, large enterprises have moved from experimenting to understanding how to deploy IoT across their operations, integrating it into their global product lines in a way that delivers real value to their consumers and the bottom line. In line with these global IoT adoption patterns, most US businesses continue to see IoT as a priority, with 86 percent planning to increase investment and 46 percent planning to boost spending by between 51 and 100 percent.
In a recent McKinsey Global Institute report, IoT is estimated to have an economic effect of somewhere between $4 and $11 trillion on the worldwide economy by 2025 across healthcare, retail, and the smart home. According to a Consumer Technology Association (CTA) study, 83 million households and approximately 22 million homes today own more than one smart home product. The United States Home IoT devices market is predicted to grow with a double-digit CAGR of 19.83 percent from 2020 to 2026.
Therefore, with demand for all things ‘smart’ now at an all-time high, what factors might be holding back US IoT market maturity?
eSIM Connectivity for Future Growth
Historically, US deployments have tended to be domestic rather than international, and today US organizations remain cautious around initiating large-scale global IoT projects and deployments. Here, the adoption of eSIM will be critical to fueling future growth in the market, but cellular-connected IoT deployments have still not reached anywhere near critical mass.
Today, most US businesses have deployed fewer than 10,000 devices, questioning whether projects are truly delivering against expectations and reaching their full potential.
Uncertainty about initial and lifetime device connectivity is a huge concern for US businesses rolling out large-scale IoT projects, which are expensive to scope and maintain. The ongoing MNO connectivity restrictions around ‘permanent roaming’ are a significant limiting factor that impedes progress. The level of investment needed is harder to justify in commercial terms when the connectivity environment is not assured.
While the technology landscape continues to change, with the sunsetting of specific cellular bands such as 2G and 3G, and the emergence of 5G services, for example, maintaining connectivity across multiple geographies will remain a significant challenge. This will pose unacceptable levels of uncertainty and risk around initial and lifetime device connectivity that many businesses utilizing IoT are not equipped to handle.
But as many US organizations are starting to pinpoint device management, certification and contracts, as key pain points in IoT projects, perhaps these concerns now signal that many are now ready to move towards embracing larger scale global IoT deployments?
Technology Drivers and Challenges
In our recent research report looking at current global IoT adoption, challenges around security and device onboarding (i.e., device set up, configuration, and design) testing and certification were highlighted as critical factors impeding progress for many US organizations. Security was noted as the primary concern amongst the challenges cited, both now and in the future. This points to the need to adopt an embedded approach to security in IoT device design and more advanced connectivity services that utilize private networks, encryption, and comprehensive security monitoring and remediation features.
Some of the top cybersecurity challenges in IoT include device operating system patching, improper encryption mechanisms, device default factory settings, device shadow, device event logging, distributed denial of service (DDoS) attacks, among many others.
Looking to the Future
US respondents are choosing to harness IoT for innovation, break into new geographies, and conduct market research with new products. As US-based enterprise organizations deploy IoT globally, intelligent eSIM connectivity will become vital to overcoming permanent roaming, other multi-region cellular connectivity, and technology to future proof against challenges.
The future growth of the US IoT market now lies in guaranteeing global connectivity for commercial IoT devices without compromise and regardless of where they are deployed.
New technology platforms such as multi-IMSI eSIM (eUICC) enable advanced multiple profile (or network) management that is completely agnostic and can flexibly switch between various operators.
This significantly improves device uptime and service quality and enables more comprehensive, reliable connectivity for the global IoT ecosystem across a more significant number of territories than any other provider can deliver, and eliminates the cost and risk of device disconnection.
Uncertainty about initial and lifetime device connectivity is a huge concern for US businesses rolling out large-scale IoT projects. It is now time for IoT vendors and the global MNO community to simplify the IoT ecosystem and work together to enable IoT to achieve its full potential.