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Global IoT Prospects Bright, Investors Pour in Billions

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Internet of Things (IoT), which enables any physical electronic device with a valid IP-address to transfer data seamlessly over a wireless network, is the latest in the line of service and business models that is quickly gaining market traction. According to a recent report by research firm Gartner, worldwide spending on endpoints and services of connected objects is expected to reach nearly $2 trillion in 2017 from $737 billion in 2016.

There will be about 8.4 billion connected objects (IoT objects) in use globally by the end of this year, a rise of 31% from the year before. This figure is likely to reach around 20.4 million by 2020. Notably, North America, Western Europe and Greater China region will dominate 67% of total globally IoT installed bases in 2017. 

Next-generation superfast wireless networks (4G LTE, LTE-A, upcoming 5G) will provide the primary impetus to the telecom industry. In this context, IoT has the potential to be the number one factor driving future growth in this space. IoT is a network of physical objects embedded with electronics, software, sensors and connectivity that enables it to achieve greater value and service by exchanging data with other connected devices.

As per a Gartner report, Businesses will represent 57% of total IoT spending this year to $964 billion. Consumer applications will amount to $725 billion in 2017. The research firm has estimated that hardware spending from both segments will reach almost $3 trillion by 2020.

At present, the deployment of innovative connectivity platforms to deliver seamless, fully integrated mobile communication with global networking has become crucial to the success of wireless service providers. Massive growth of 4G LTE (Long-Term Evolution) and LTE-A (Advanced) networks across the globe will lead to a smooth transition from 4G to the upcoming 5G network standard. Superfast 5G mobile networks will be of utmost importance for the efficient management of the exponential IoT growth.

U.S. telecom behemoths like Verizon Communications Inc. (VZ - Free Report) and AT&T Inc. T, U.S. national wireless carrier T-Mobile US Inc. TMUS and UK-based global telecom operator Vodafone Group plc. VOD are well poised to benefit from the IoT boom. Except Vodafone, All three stocks mentioned above currently carry a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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