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EMERGENT
Channel
Vision
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May - June, 2017
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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.
S
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
64
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.
Overheard
“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.