IDC says it expects spending on IoT by Chinese manufacturing enterprises to reach $US127.5 billion by 2020, a compound average growth rate of 14.7 percent from 2016 to 2020.
IDC says software and services between them will account for 60 percent of expenditure. It notes that IoT has been enshrined in China's 13th Five-Year Development Plan and has become a strategic emerging industry in the country.
"Made in China 2025 is the first 10-year action plan for the Chinese government to implement its strategy of building China into a manufacturing powerhouse," IDC says. "With the policy and financial support of the Chinese government pushing forward the development of smart manufacturing, raising the level of networked, collaborative manufacturing and speeding up the manufacturing industry's transformation into services have become the main development direction for the manufacturing industry."
Wang Yue, Senior Research Manager at IDC China, said: "Many Chinese manufacturers have started to implement an IoT strategy with a view to improving their production and operational efficiency and speeding up their transformation from production to services. With the promotion of smart manufacturing, the fast integration of IT (information technology) and OT (operational technology), and the prevalence of the ‘digital twin' concept, IoT technology will have more room for development in the manufacturing industry."
Yue added: "With the integration of emerging technologies (such as cloud computing, big data and mobile technology) and IoT into this industry, and the integration between IT and OT, the potential of IoT technology will be released at an accelerated pace."
IDC has identified three major development trends it expects to see in the next three years: IoT platform competition will intensify; IoT applications will accelerate innovation in the manufacturing industry; edge computing will become the next hotspot.
"With the large-scale deployment of IoT devices, IoT-generated data is expected to witness exponential growth," IDC said. "Therefore, data filtering and processing through scattered devices and IoT gateways will become an important direction for IoT applications in the manufacturing industry. Meanwhile, data will gradually become an important asset for enterprises. Edge intelligence will ensure data security and help enterprises to avoid risks when there are network or data center malfunction."