Connected Products Reply Report shows potentials and perspectives

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"Connected Products – Behind the Scenes" is the title of the current report by Reply. It highlights the various application areas of smart, connected products and reveals their potentials and future perspectives.

Together with the analysts from the Pedagogical Analysis and Curriculum (PAC), Reply outlines the expected development of market investments in the key segments until 2028. The study is based on the experiences of the Reply Group in 12 key countries:

• USA,

• China,

• United Kingdom,

• France,

• Germany,

• India,

• Italy,

• Netherlands,

• Brazil,

• Belgium,

• Poland and

• Romania.

Connectivity affects almost all areas

Technological advancements are leading to an increasing number of connected products and systems, particularly for professional and industrial use. Currently, more than half of the corresponding investments are made in this area. The integration of connected devices with artificial intelligence (AI) is revolutionizing the manufacturing sector.

Connected solutions cover all aspects of production and use sensors, cloud-based IoT platforms, and real-time data. These solutions in industrial plants, logistics centers, retail, and offices turn them into smart centers. This leads to increased operational reliability and efficiency.

In the real estate sector, smart technologies contribute to more efficient energy management and cost savings. The logistics industry and retail sector are also benefiting from connected applications and connected products, as is the transportation sector.

For consumers, Smart Home and personalization are in the foreground. The insurance industry uses connected solutions for new business models and services.

Wearable technologies have evolved into advanced medical devices that provide comprehensive information. In healthcare, connected solutions optimize patient care by

• remote monitoring,

• personalized healthcare and

• advanced disease management.

The integration of connected products with artificial intelligence and telemedicine extends access to healthcare. It enables proactive care across geographical borders.

Smart energy uses connected technologies for greater efficiency and sustainability, for example by

• smart electricity meters,

• thermostats and

• solar cells.

Components like these can be integrated using machine learning technologies and greatly increase sustainability.

Overall, the convergence of AI and connected products opens up perspectives that seemed unimaginable yesterday. Autonomous robots already use

• embedded intelligence,

• sensors,

• cameras and connectivity for navigation,

• control and

• collaboration.

Machine customers are embodied in connected solutions and controlled by AI algorithms.

Tripling of IoT connections in the next five years

The increasing spread of Connected Products in various application areas requires quality, safety, and reliability standards as well as seamless integration into existing ecosystems.

The number of IoT connections alone has tripled in the last five years according to corresponding global data. Projections suggest a further tripling in the next five years. This would result in nearly 40 billion IoT connections by 2028. More than half of these will be accounted for by the consumer IoT, a quarter by the industrial IoT. The automotive IoT is expected to encompass around three billion IoT connections by this year.

Regardless of the expected rapid growth in the mobility segment, investments in connected industrial and commercial products will be highest over the next five years, accounting for more than half of the projected market of a total of 306 billion euros by 2028. In all segments, investments are expected to double in all segments compared to 2023.

USA ahead of China largest market – Germany in third place

Connected solutions are a valuable tool for companies to streamline processes and reduce costs. A significant advantage is high energy efficiency and waste reduction.

In an international comparison, the market for Industrial and Professional Connected Products in the USA is the largest in the world, growing from 34 billion euros in 2023 to 86 billion euros in 2028. This is followed by China with growth from 10 billion euros to 34 billion euros, and Germany with growth from 7 billion euros to 19 billion euros. Overall, China and India are recording the most significant increase, with at least a threefold increase in the next five years.

Invest in robust infrastructure now

Connected products are transforming industries, driving innovation, and providing greater value. The report recommends companies:

• to invest in a robust technological infrastructure,

• to pay particular attention to data protection and data security and

• to develop clear strategies for targeted use of the data generated by connected products.

Think big, but don't tackle everything at once.

Brands and manufacturers should promote a flexible organizational culture that closely follows trends, technologies, and consumer preferences. This could lead to a pioneering role in the market with the right connected products at the right time. The medium-term development of connected devices is moving towards personalization: The products respond to individual preferences and adapt accordingly.

The societal component must also be considered: The exclusion of weaker actors can deepen existing divides and widen the gap between digital pioneers and stragglers. With regard to equality of opportunity, connected products can enable new applications for small businesses. With the availability of scalable cloud platforms, open-source software, and affordable connected devices, now also small and medium-sized businesses are benefiting. This democratization not only leads to fairer competition conditions but also promotes innovation.

Quantum computing as a game changer

Connected products also stand for long-term technological promises. Quantum computing, with its immense computing power, will effortlessly handle the huge data streams of IoT networks in the future. Complex algorithms can be solved in seconds. Ideally, this makes it possible to identify detailed information, patterns, and correlations in the data that remained undiscovered with previous computing methods. By fundamentally changing data processing, analysis, and decision-making in networked systems, quantum computers can significantly support connected products and solutions.

Not least, haptic technologies will play an increasingly important role. They bridge the sensory gap between the virtual and real world. The seamless integration of the physical and digital world opens up new perspectives for industries such as retail or the entertainment industry.