Smart city device shipments will increase from 202 million units in 2017 to 1.4 billion units in 2026, according to a research note from IHS Markit.
The company argues that the smart city market is fragmented at present in the type of smart city projects developed, in the technology, in the ecosystem and in the solutions. Players in this market range from small startups to international giants and span a variety of backgrounds, from telecom operators and network vendors to software companies, device manufacturers and connectivity players.
Fragmentation is also seen in a number of competing technologies used for smart city initiatives. These include the proprietary, such as Sigfox, and the standardised, such as 4G and NB-IoT. Long term, few technologies are expected to obtain a leading market share; however, the shakeout process is expected to be long, and multiple technologies that target different use cases and needs will continue to coexist, IHS added.
In order to take the smart city market to the next level, successful business models should leverage an extremely wide ecosystem of possibilities and collaborations to make it happen. IHS Markit notes that most smart city projects remain in the pilot stage with key obstacles which must be addressed before the full development of the market can occur. Business models which promise long-term project sustainability and desired results are a key market challenge.
Considering the present nature of the market, opportunities can be strengthened by leveraging adjacent sectors. Whether through advertising or leveraging mobile network deployments, business models can tap into other revenue streams to monetise a smart city initiative. Smart cities are long-term prospects. Hence, companies and cities involved in the smart city initiative are wise to focus on long-term results. The more smart-city initiatives tackle fundamental issues facing cities and countries, the more they are likely to become essential parts of government and business agendas.
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