Intelligence Brief: Covid-19 and what it means for IoT

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Intelligence-Brief

Intelligence Brief

Intelligence Brief- It is still early days to fully size the impact of the current pandemic on the global economy, not to mention IoT. Nonetheless, what is important to note for both the enterprise and consumer is that IoT is not just about connecting devices, it is about using and analysing the data these devices collect to achieve an outcome.

By no means do we think we have all the answers; the degree of uncertainty is still high– from the overall economic impact, to changes in consumer spend, and how enterprises in different verticals respond to the ‘new normal’. Rather, our analysis is a reflection on how the market has responded to Covid-19 so far and how we see (at this time) the future, recognising that, for both the enterprise and consumer, IoT is not just about connecting devices but about using and analysing the data these devices collect to achieve an outcome. And, of course, we will continue to monitor market developments, plough through quarterly reports, talk with the ecosystem players to to try to gauge where the market is moving.

With that in mind, our views and analysis are guided by some top-level assumptions that underpin our latest forecast thinking.

Recession looms
Based on IMF data, global GDP will contract by 3 per cent this year and grow by 5.8 per cent in 2021. Whether or not these predictions still hold true is up for debate. Regardless, recent news suggests that the current crisis is far worse than the 2007-2008 financial crisis, pointing towards a U-shaped recovery in economic output, rather than the hoped for V-shaped fast recovery. As such, we look at any IoT market impact from a short-term and long-term perspective.

The ‘new normal’
On the demand side, the picture isn’t rosy. The Manufacturing PMI (Purchasing Manager Index), measuring the health of the economy, has nose-dived. This reflects low business confidence. Consumer confidence indexes have plummeted too, due to growth in unemployment and limited spending power. Almost overnight a large proportion of employees moved to a remote working environment, which increased enterprises’ urge to support their workers via cloud based software applications.  On the supply side, production has been impacted as manufacturers had to deal with supply chain disruptions, often looking to find alternative providers. China’s rapid re-opening has helped remedy some of these issues. But, in the longer-term, enterprises will look to build yet more resilience into their supply chains to be able to ‘track and trace’ and have visibility of their asset. Potentially, they will be also looking for a greater geographic spread of suppliers, and even at the potential for re-shoring – building greenfield operations to support in-country production.

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Article Credit: Mobile World Live