China IIoT efforts will dominate global market: Economist

China is well positioned to become a global leader in the Industrial Internet of Things (IIoT) market, as industrial use of connected devices eclipses consumer gadgets.

A recent article by the Economist magazine extolled the virtues of China that positions it to capture a significant share of the global IIoT marketplace.

It says China’s current role as the world’s largest manufacturing power gives it the basis of becoming a global IIoT powerhouse.

Many of the IIoT technology products will be developed in China as the country makes most of the planet’s electronics. These electronics include sensors and other components that comprise IIoT networks and enable industrial products and factory machines to communicate data.

As well, much of this China-made IIoT technology will targeted for sale to the millions of factories in the country, which house billions of machines. The Economist notes that this syncs up ideally for the Chinese government which has shown itself keen to encourage the upgrading of the country’s manufacturing base.

China currently has more connected devices than any other nation on earth. IDC’s research predicts that the overall IoT market in China will rise to $361 billion in 2020 from $193 billion in 2015.

Add to this Accenture’s estimates that China’s IoT related industry could add up to $736 billion to the country’s GDP by the year 2030.

GE already working in China IIoT space

The huge potential of the Chinese IIoT market is attracting significant investment to its shores.

The Economist cites General Electric’s move to open a “digital foundry” in Shanghai as a prime example of this shift. GE’s center will enable Chinese firms to develop and commercialize IIoT products,

The GE foundry in China and another to be launched in Paris are part of the company’s strategy to encourage use of its proprietary Predix software for IIoT. It has so far attracted the business of China Telecom, China Eastern Airlines and Chinese tech giant Huawei.

Meanwhile, other players looking to capture segments of the IIoT market include China Mobile and other offshore giants like Cisco, HP, Honeywell and Siemens.

However, the article cites some pitfalls that could hamper China’s IoT potential. Factories in China are not as technologically advanced as those in Europe or the U.S., which could create difficulties when transitioning to advanced new systems that deeply integrate IIoT technology. As well, such a transition may prove too expensive for many companies that are suffering from both a flagging global economy and weak local fortunes.

However, recent news of poor wearables sales hints that the future for connected devices may be much rosier among industrial clientele than consumers.

IDC reported that smartwatch shipments tumbled 32% in the second quarter compared to the same period last year. The report claims that Apple Watch sales fell to 1.6 million in the second quarter of 2016, a 55% fall from the 3.6 million sales recorded in the same quarter last year.

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