- The amount of money invested in global IoT start-ups decreased significantly in the last 12 months.
- Several major companies that were selling IoT platforms recently announced discontinuations.
IoT Analytics’ State of IoT—Spring 2023 report lowered its five-year IoT market outlook forecasting that the chip crisis was likely to continue in the face of increasing demand. It also attributed the lowered outlook to the uncertainties posed by US-China tensions.
The amount of money invested in global IoT start-ups decreased significantly in the last 12 months. The report tracked 52 IoT-related funding rounds totalling $840 million in the first quarter of 2023 which was a 45% reduction in the value of investment in IoT start-ups companies compared to Q1 of 2022.
Several major companies that were selling IoT platforms recently announced discontinuations, including Google’s IoT Core, Bosch‘s IoT Device Management, IBM’s Watson IoT Platform, and SAP’s IoT services. The report attributed this change to the market dominance of Microsoft Azure IoT and AWS IoT. “IoT services themselves don’t make enough money. The services like AWS IoT Core and Azure IoT Hub are expensive to build and maintain and by themselves they are likely not profit-making,” a former IoT product lead at Microsoft said.
Several companies that have discontinued their IoT services have announced a shift toward creating solutions specific to particular verticals or are relying more on a few select partners to continue to support IoT initiatives (e.g., Google–Litmus Automation partnership).
Despite the gloom, the number of global Internet-of-Things (IoT) connections grew by 18% in 2022 to 14.3 billion active IoT endpoints and is expected to grow another 16%, to 16.7 billion active endpoints in 2023, driven by Industry 4.0 and industrial IoT projects.
Based on the responses of the market participants, the report concluded that the sentiment surrounding IoT would remain largely positive in the second half of 2023, despite a number of macro uncertainties and some (IoT-related) layoffs. “We continue to secure major greenfield design wins, even amid macro uncertainty. The IoT market has incredible potential, with thousands of new applications on the horizon,” said Matt Johnson, President and CEO, Silicon Labs.
