Transforma Insights publishes industry-leading forecasts for AIoT

Newly developed forecasts for AIoT include AIoT device count and detailed information for corresponding IoT applications and AI use cases for 196 individual countries. The forecasts
are available for Corporate Subscribers to Transforma Insights’ Advisory Service.

Artificial Intelligence (AI) and the Internet of Things (IoT) are two of the most impactful and far-reaching technology developments of our time. Increasingly these two technologies are deployed together and the term ‘AIoT’ has come to the fore.

IoT devices can generate significant amounts of potentially valuable data and AI can be applied to this data in many locations, including ‘cloud’ data centres, various network edge locations, and on board the actual IoT devices themselves. All of these approaches have the potential to unlock significant value and new insights from IoT data.

Applying AI to IoT data on board source IoT devices (i.e. ‘AIoT’) can bring significant benefits, including improved performance, enhanced compliance, privacy and security and potentially reduced operational costs.

The potential for AIoT is significant. Transforma Insights forecasts that total AIoT connections will grow from 1.4 billion at the end of 2023 to 9.1 billion at the end of 2033. This is a more than 6-fold growth in 10 years, resulting in a CAGR of over 20%.

Overall AIoT represents a significant market with net additions growing from less than half a billion in 2023 to just over 900 million in 2033.

For context, we forecast a total of 39 billion IoT devices at the end of 2033, up from 16 billion at the end of 2023. Accordingly, as illustrated below, we forecast that 9% of IoT devices will have on board AI in 2023, rising to 23% in 2033. The rate of growth of AIoT penetration of IoT devices slows towards the end of the forecast period, primarily due to the AIoT penetration of key IoT applications reaching saturation.

Transforma Insights’ AIoT forecast highlights include:

• At the end of 2023 there were 1.4 billion active AIoT devices, a figure which will grow to 9.1 billion in 2033 at a compound annual growth rate (CAGR) of 20%. This represents an AIoT penetration rate of all IoT devices of 9% in 2023, rising to 23% in 2033.

• Rates of adoption of AIoT vary significantly for different IoT applications. By 2033, 77% of IoT AV Equipment will be AIoT (i.e., will have on-board AI capabilities), whilst a negligible proportion of Inventory Management & Monitoring and Building Lighting IoT devices will qualify as AIoT. AI can play a significant role to support and enhance IoT applications such as these latter two IoT Application Groups, but will typically be deployed on edge or cloud infrastructure rather than on-board the devices themselves.

• In 2033 the consumer sector will account for 80% of all AIoT devices. Of the enterprise segment in 2033, 50% of devices will be accounted for by ‘cross-vertical’ use cases such as generic office equipment and fleet vehicles, 21% by government, most prominently CCTV, 6% by health, and 5% for each of transport and finance.

• The single biggest use case is (consumer) AV Equipment. Personal and home electronics, vehicle head units, security alarms, personal assistance robots, CCTV, HVAC and access control together will account for 78% of all AIoT devices in 2033.

• Geographically, the top 22 world markets will account for almost 90% of AIoT devices in 2033. China, North America, and Europe dominate, accounting for 32%, 24% and 21% respectively of the total number of AIoT devices worldwide in 2033.

• From an AI Use Case perspective, Natural Language Processing leads adoption, closely associated with Chatbots & Digital Assistance which is the second most widely adopted AI Use Case. These AI Use Cases can be found on-board a wide range of devices to support human interaction, most notably in the case of smart speakers. Image Processing & Analysis is the next most widely adopted AI Use Case and is often found on-board AIoT CCTV cameras and also supporting gesture control human machine interface functionality.

• Vendors seeking to address AIoT opportunities should consider both AIoT device types (and the AIoT Use Cases that are typically found on-board) and AIoT Use Cases (and the range of AIoT devices that will typically feature specific AIoT Use Cases on-board).

Further summary level forecast information can be found in our AIoT Forecast Webinar and accompanying AIoT forecast report published online, available to anyone with a (free) Essential subscription to Transforma Insights Advisory Service.

About the AIoT Forecasts

Transforma Insights’ AIoT forecasts are based on our ultra-granular and industry leading 10 year IoT forecasts covering 70 Internet of Things application groups, 257 individual IoT applications, 20 industry sectors and 196 countries. To develop the AIoT forecasts Transforma Insights has considered the expected adoption of onboard AI processing for each IoT application (257) and for each country (196).

The core AIoT forecasts include data for the installed base of AIoT devices at the same level of application, country and industry sector granularity as our established IoT forecasts. In addition, the AIoT X-Ray forecasts provide further detail and insight along two dimensions, allowing users to download forecasts for the AI Use Cases that will feature on AIoT devices supporting specific IoT applications, and also forecasts for the AIoT devices and associated IoT applications that will feature specific AI Use Cases.

All forecasts are available to Corporate Subscribers to Transforma Insights’ Advisory Service.

Find out more

Find out more about AIoT with our dedicated AIoT Hot Topic page. If you would like to know more about Transforma Insights and the research that we do, please contact us.