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May - June, 2017


warns Pablo Tomasi, senior analyst

at IHS Markit. Even so, the more

smart city initiatives tackle fundamen-

tal issues facing municipalities and

countries, the more they are likely to

become essential parts of government

and business agendas, says Tomasi.

As a result, the entire value chain will

grow, with IHS Markit forecasting that

smart city device shipments will in-

crease from 202 million in 2017 to 1.4

billion in 2026.

At present, however, the current

state of the market is best described

as fragmented. “This fragmentation

appears in the type of smart city proj-

ects developed, in the technology, in

the ecosystem and in the solutions,”

says Tomasi.

Pilot projects remain most com-

mon, but players in the market range

from small start-ups to international

giants and span a variety of back-

grounds, from telecom operators and

network vendors to software com-

panies, device manufacturers and

connectivity players. “Each company

works to advance its own market strat-

egy, contributing to a fragmented land-

scape,” Tomasi continues.

Fragmentation also is evident in the

wide array of competing technologies

used for smart city initiatives, he says.

These include the proprietary, such as

Sigfox, and the standardized, such as 4G

and NB-IoT. “Long term, a few technolo-

gies will obtain a leading market share;

however, the shakeout process will be

long, and multiple technologies that tar-

get different use cases and needs will

continue to coexist,” says Tomasi.

Vertical applications related to phys-

ical infrastructure and mobility show

particular potential for growth, says

IHS. In 2026 these applications are

expected to comprise approximately

65 percent and 22 percent of total

device shipments, respectively.

IT Partners’

Consumer Play

Somehow, someday, IT solution pro-

viders and partners must come up with

a viable business model for servicing

consumer households. How much con-

sumers will be willing to pay for, say, a

monthly IT service contract remains to

be seen, but the market is certainly go-

ing to be huge for whoever can make

the economics work.

Consider, for instance, that in four

years, annual growth of smartphones

sold will have slowed from 30 percent

in 2014 to a mere 4 percent. Mean-

while, the number of connected smart

devices in use will nearly double from

8 billion last year to 15 billion in 2021,

according to a report by Ovum. Yet de-

spite the nascency of interconnected

residence and smart home technology,

a good chunk of smart home device

owners already report to having prob-

lems with their devices and connectiv-

ity – and that percentage is growing. In

2016, 28 percent of smart home device

owners reported experiencing problems

with various smart home devices, ac-

cording to findings from Parks Associ-

ates. In 2017, that number increased

to 34 percent of consumers having

issues. Fewer than 10 percent of con-

nected entertainment device owners,

by comparison, say they have problems

with their streaming media devices,

smart televisions and gaming consoles.

Of course, many smart home devices

utilize new technologies, making them

susceptible to problems, Parks Associ-

ates analysts note.

Not surprisingly, nearly half (47 per-

cent) of smart home device owners say a

service that bundles technical support with

their devices would be highly appealing.


mart cities certainly are long-term prospects,

and companies and cities involved are wise

to focus on long-term results,

A Billion Smart City

Devices by 2026


Percent of shoppers surveyed by PwC who said

they would rather have instant access to quality

AI-powered customer service than preserve the

jobs of human customer service reps.


“Sales reps are early adopters. They were the first ones to use

mobile phones and laptops.”

ForceManager CEO Oscar Macia, on killer apps and tech adoption.