According to the latest report published by Persistence Market Research - "Smart Cities Market: Global Industry Analysis and Forecast 2016-2026," the US$ 622 Bn smart cities market is anticipated to surpass US$ 1 Tn in 2019 and take a leap to US$ 3.48 Tn by 2026 end. Over a 10-year assessment period 2016-2026, the market will showcase staggering growth at a CAGR of 18.8%.
IBM Global Business Services, Cisco Systems, Inc., AT&T, Ericsson, GE, Hitachi Data Systems Corporation, Huawei Technologies Co., Ltd., Microsoft, Philips Lighting, and SAP SE constitute some of the top players competing for a dominating share in the global smart cities market.
Backed by favorable government initiatives, brisk urbanization will continue to popularize the concept of smart cities worldwide.
Exploding vehicular parc and soaring need for improved energy infrastructure are also grasped among the top drivers to the global smart cities market growth.
Although developing countries will continue to face challenges with proper networking infrastructure and funding, rapid digitization and integration of new technologies in existing infrastructure, are likely to gradually provide an optimistic outlook to the overall market growth.
The market is currently driven by public-private partnerships, crowdfunding, and other emerging funding options.
By application, smart energy registered over 18% value share in 2015, attributed to deployment of a large number of smart grid technologies. However, this segment will possibly witness a setback over the second half of the assessed period.
Smart transportation and smart governance are projected to hold over 14% and 11% revenue shares in 2026. Smart healthcare, water network systems, and smart education are gaining traction gradually.
Smart security, recorded over 15% share of the market value in 2015, is expected to rule by 2026 end with over 22% share. With the highest CAGR, this segment will possibly reach US$ 780 Bn in 2026.
Owing to growing inclination toward eco-friendly construction technology, smart building is estimated to register over 15% market value share in 2026, crossing US$ 520 Bn.
In terms of Y-o-Y growth, smart security and smart building segments will dominate over others, with the respective Y-o-Y growth rates of over 23% and over 20% in 2017 over 2016.
By component, decent growth will be observed in all the three key segments. While hardware segment can witness a slight decline post-2021, it will remain dominant through 2026 with over 35% value share.
Service segment is likely to capture over 30% share in 2026 revenues, whereas the highest growth is anticipated to be seen in the software segment, resulting in over 33% revenue share in 2026.
North America, led by the U.S., will possibly expand at a CAGR of 14.5% over 2016-2026, reaching a value worth US$ 750 Bn. However, this region will lose a major market share within the second half of the forecast period.
The US$ 133 Bn market in Asia Pacific (excluding Japan) will boast of the fastest growth at a 22.6% of CAGR, surpassing US$ 1 Tn in 2026. APEJ will reportedly gain 790+ BPS and contribute for over 29% share to the market revenues in 2026. China will continue to lead this region, followed by ASEAN countries and ANZ.
The Western European market, driven by the U.K., followed by Germany, and France, is projected to witness over 21% of a CAGR, whereas Latin America - led by Mexico, followed by Brazil, is expected to exhibit a CAGR of over 18%.
Japan will also register a robust CAGR of over 20%, while MEA a set for a CAGR of over 17% over the assessment period.
Several governments are increasingly collaborating with smart cities technology and service providers, which is foreseen to hold a major impact on market growth.
Following growing preference to environmentally-friendly alternatives over their conventional counterparts, hiking adoption of green building technologies is counted among the most prominent trends in smart cities market.
Smart lighting is another remarkable trend with immense potential to shape-up the market.
With an increasing global population shifting to a more sustainable lifestyle buckled with digitization, leading players are the most likely to capitalize over multiple growth opportunities in digitization sector in near future.
As the next decade is expected to see nearly 50% increase in global waste generation, adoption of smart cities is constantly on the rise for deployment of smart waste management solutions.
A number of clean-tech startups are expected to gear up with a wide range of products and services, such as smart apps, to grab discernible positions in smart cities market.
Emerging economies in Asia will present lucrative opportunities in smart energy, smart cyber and network security, building automation, and smart transportation.
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