Skip to content
10 min read

Why Asia is driving the Internet of Things

Why Asia is driving the Internet of Things

Billions of devices, all connected, communicating and sharing data in real time. Once the domain of science fiction, the future is here, now. And it appears that Asia is stealing a march...

With Mobile World Congress (MWC) taking place in Shanghai this week, Asia's biggest mobile event attracts thousands of C-level attendees and decision makers from the world's largest and most influential companies. This year, IoT (Internet of Things) is expected to make a huge splash, and with good reason.

From connected homes and security to manufacturing and healthcare, Research Nester reported the global IoT market is anticipated to reach $724.2 billion by 2023, more than half of which will be driven by the Asia-Pacific region.

So where's the opportunity?

Ten years ago, while Apple was on the cusp of launching the smartphone as we now know it and social media juggernaut Facebook had only just opened up public access, work on the world's first “Smart City” had already begun in South Korea. 

Fast-forward to today and Songdo International Business District is packed with sensors and devices that monitor temperature, air pollution, traffic congestion and other factors critical to the proper functioning of an urban system.

Songdo's promotional materials, describe it as "boasting the wide boulevards of Paris, a 100-acre Central Park reminiscent of New York City, a modern canal system inspired by Venice and convention centre architecture redolent of the famed Sydney Opera House." 

The implementation of further smart city projects across ten other locations, including Sejong, Gwanju, Suwon, Siheung and Gangseo, represents increasing opportunities for innovative companies to provide value-added services and solutions to the IoT ecosystem.

Meanwhile, Japan, once a dominant force in electronics, has faced challenges from other Asian markets in recent years with manufacturers being forced to restructure in the face of global market shifts. However IoT is now being seen as a significant window of opportunity for leveraging their strengths in manufacturing and robotics, and a lot is riding on this chance for the industry to ‘bounce back' on the global stage.

A boom is anticipated in sectors such as autonomous driving, e-health, smart metering, transportation management, e-payment, surveillance, digital signage, and data backup, all of which provides plenty of entry points for foreign companies looking to bring their expertise to the market. In fact, some companies such as French IoT firm Sigfox, supported by Intralink, are already filling technology gaps by bringing their unique LPWA (Low Power Wide Area) network solutions to Japan, reducing the cost of connectivity and driving IoT adoption across the country.

On the infrastructure side NTT Docomo, the largest carrier in Japan, is putting a lot of energy into introducing 5G by the time of the Tokyo Olympics in 2020. This would certainly be a game changer from an IoT perspective, with the dramatically faster connectivity opening the door for new IoT applications. In fact, the Olympics is increasingly being viewed by many as the key driver – a once in a generation opportunity to show the world that Japan is still a global innovator, with IoT firmly at the centre.  

But it is not just Japan and Korea that are moving fast. In China, the Ministry of Industry and Information Technology's (MIIT) 13th five-year development plan specifically cited the importance of IoT to their economy, with projections for the IoT market to be worth CNY 1 trillion by 2020.

Competition is already fierce in this space with manufacturers such as Xiaomi and Huawei investing heavily alongside the large mobile operators and online service providers like Tencent. There’s plenty of room for new ideas, with Mobike, providers of internet connected smart bicycle rental, unlocked with the touch of an app, raising $600 million in VC capital. In the same space, bike-sharing startup Ofo is now valued at over $2 billion, providing over 3 million cycles in 50 Chinese cities.

Connected vehicles are another area of keen interest, with telecoms giant China Unicom signing deals with more than 20 car manufacturers offering 4G services to over three million vehicles. Along with electric vehicles, artificial intelligence and autonomous driving, this is just the beginning of the transportation revolution and would appear to provide a wealth of opportunity for technologies and products operating in this sector.

One benefit of China's political system is that when there's willingness to push an agenda such as IoT,  there is often a relentless pursuit by the state to follow through on delivering objectives. What this means is that, provided they can adapt to some of the cultural differences in the Chinese market, western companies with the right products can make a significant impact.

The Internet of Things offers a myriad of opportunities across practically every sector of the economy, particularly in the Asia-Pacific region, and Western IoT firms with global aspirations are now realising that Asia is not just a nice-to-have, but must represent a key part of their strategy for growth.

Alex Gover
About the Author

Alex Gover

Alex Gover is our SVP of Business Development. Now based in London, he has worked in and with East Asia for the past 25 years, including at Sony's International Marketing Division at the company's head office in Tokyo. He studied Japanese, Chinese and Economics at Oxford University before going on to take a Diploma in Advanced Japanese at Sophia University in Tokyo.

We use cookies to give you the best experience of using this website. By continuing to use this site, you accept our use of cookies. Please read our Cookie Policy for more information.