In the firm’s annual Mobility Report, it said IoT connections will climb by 23 per cent annually for the next five years, hitting 16 billion in 2021.

connected-devices-iot-2021-ericsson

That’s a much higher growth percentage than mobile, which Ericsson expects to grow at three percent annually over the next five years, rising from 7.4 billion currently to 12 billion in 2021.

The major growth factors for IoT include connected cars, utility meters, and industry devices. Europe is the epicenter of the growth; Ericsson expects IoT adoption to rise by 400 percent in the continent by 2021.

IoT accelerating as costs drop

“IoT is now accelerating as device costs fall and innovative applications emerge ,” said Rima Qureshi, Ericsson senior VP and chief strategy officer. “From 2020, commercial deployment of 5G networks will provide additional capabilities critical for IoT, such as network slicing and capacity to connect exponentially more devices than is possible today.”

5G is being tested in multiple locations across the world, including South Korea, Japan, the United States, and the United Kingdom. Most wireless operators have said they would like to start pushing the network standard—with speeds above 1Gbps—within the next five years, even though some networks are still struggling to provide adequate 4G LTE coverage in developed countries.

Ericsson’s numbers are actually quite low compared to other predictions. Research firm Juniper predicts 17 billion devices will be in use by 2020, and Gartner made an even larger prediction at 21 billion. IDC, another major research firm, said the IoT market would reach $1.7 trillion with an annual growth rate of 16.9 percent.

Those huge numbers are bewildering given the current state of IoT, but as connected devices spread across all industries, we may start to see why industry insiders think IoT is the next big thing.