A/NZ Internet of Things spending will hit $24 billion in 2026


Spending on IoT products and services in Australia and New Zealand is expected to top $16 billion in 2022, a 13% increase from 2021, according to the latest bi-annual Global Internet of Things Spending Guide from Australia. IDC.

The A/NZ IoT market is facing challenges due to rising inflation, chip shortages, trade restrictions, natural calamities and supply chain disruptions. However, despite these challenges, increasing 5G deployment, soaring exchange rates, and mature adoption of technologies such as AI, cloud, and big data add potential to IoT deployment in the region.

IDC projects A/NZ spending on the Internet of Things (IoT) to reach $24 billion in 2026, growing at a compound annual growth rate (CAGR) of 10% for 2021-26.

“The role of IoT continues to grow as enterprises embrace digital initiatives and seek to embed intelligence into processes and applications,” says Hugh Ujhazy, Vice President of Telecommunications and IoT at APEJ .

“To enable this, you need to build bridges between operational technology and IT stakeholders at many levels,” he says.

“Those who embrace integration should thrive in the new normal.”

Labor-intensive and asset-heavy industries, such as manufacturing, utilities, and transportation, will continue to be the top industries investing in IoT solutions in 2022 and beyond. These industries collectively account for more than half of all IoT spending.

Challenges resulting from economic, political or pandemic factors have driven organizations to adopt a digital-first strategy, and the increase in automation of individual processes is pushing these industries to invest in IoT.

Governments are also investing in initiatives to strengthen the manufacturing supply chain. The Supply Chain Resilience Initiative is an example in Australia to improve the country’s manufacturing supply chain for critical products.

Technology, especially IoT and analytics, plays an important role. The fastest growing industries in 2022 are construction, process manufacturing and resource industries. These have traditionally been slower in adopting technology, especially construction. However, the reduction in restrictions and the increased demand for remote or contactless engagement are driving this growth as economic activities resume.

The IoT use cases that are seeing the highest spending in 2022 are related to host industries such as manufacturing operations, production asset management, smart grid (electricity), and freight monitoring. Together, these use cases will account for more than a third of overall IoT spending in A/NZ. The use cases that will see the fastest spending growth in 2022 are bedside telemetry, advanced payment/purchasing, and field maintenance and service.

“A/NZ businesses are leveraging their technology investments to transform into digital-first organizations,” says Sharad Kotagi, market analyst at IDC IT Spending Guides, Data and Analytics.

“Using IoT will enable empathetic customer experience, robust operating models, and improved collaboration.”

IoT Services will be the largest technology group in 2022 and until the end of the forecast. Deploying IoT in a distributed environment will create data security, integration and digital governance challenges, increasing dependency on system integrators and other outsourcing partners.

Software spending will be the second largest technology group in 2022 and the fastest growing technology category with a five-year CAGR of 11.5%, driven by application and analytics software purchases. Software spending is followed by hardware spending in 2022, driven primarily by purchases of modules and sensors. Connectivity spending will grow at a CAGR of 6.1% over the forecast period and will account for 10.5% of total spending in 2026.


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