According to the study conducted by Astute Analytica, revenue of the Global Smart Cities Market is estimated to grow from US$ 1,25,325.5 Mn in 2021 to US$ 6,70,424.1 Mn by 2030. The market is estimated to register a CAGR of 20.5% during the forecast period 2022-2030. A smart city is a technologically modern urban area that uses different types of electronic methods, voice activation methods and sensors to collect specific data. It includes data collected from citizens, devices, buildings and assets which is processed and analyzed to monitor and manage traffic and transportation systems, power plants, utilities, water supply networks, waste, crime detection, information systems, schools, libraries, hospitals, and other community services.
Market Dynamics
Drivers:
The global smart cities market is majorly driven by factors such as rising need for public safety and communication infrastructure, increasing number of government initiatives and PPP models for smart cities. AI and IoT driven technologies are being used in smart cities to maintain a healthier environment, improve public transportation, and improve safety. Furthermore, globally, governments have been playing a major role in smart cities market through its regulations and initiatives focused on deployment of smart services as a major part of their infrastructure. Also, rise in adoption of 5G is enhancing the growth of the smart cities market due to its faster speed and more reliable connections. Smart cities will reap the benefits of 5G by being able to offer smarter vehicles, smart processing, and manufacturing.
Restraints:
The rising usage of smart services exposes a broad range of vulnerabilities that can be manipulated by cybercriminals and other malicious activities, which may pose a major threat to the growth of the market.
Opportunities:
The increasing utilization of energy sources results in the rising amount of energy dissipation and carbon emissions, which urgently demand a sustainable and efficient use of energy. Therefore, increasing environmental concerns and demand for green initiatives are the emerging opportunities in the Global Smart Cities Market.
Segmental Analysis
IoT segment holds the highest share in the Global Smart Cities Market in 2021
Based on technology, the market is segmented into Artificial Intelligence (AI), big data analytics, IoT, cloud computing, quantum computing, edge computing, high performance computing and others. The Internet of Things (IoT) segment dominated the smart cities market in 2021 as it offers multiple opportunities for smart cities to use data for traffic control, pollution reduction, making better use of infrastructure and keeping citizens safe.
Hardware component dominated the smart cities market in 2021
The component segment of the smart cities market is sub-segmented into hardware, software, and services. The hardware component is estimated to dominate the smart cities market in 2021, as there are affordable IoT hardware options available in the market. Moreover, as hardware make up bulk of investment in early phase, they have higher share and growth during first half of forecast period.
Cloud deployment segment has the highest share in the Global Smart Cities Market in 2021
Cloud deployment has maximum share of smart cities market in 2021 and is expected to continue its dominance during the forecast period. Cloud technology provides the digital infrastructure for smart cities. Also, cloud functions as a storage and analysis system for the data used in various smart city applications. The significant share of cloud deployment is due to the fact that it can be adopted for multiple smart city applications, be it lighting, traffic management, monitoring environment or others. It also offers sustainability, as adopting cloud applications can lead to significantly lower labor and maintenance costs while maximizing space and cutting energy expenditure.
Smart citizen services lead the Global Smart Cities Market in 2021
Based on application, the smart cities market is segmented into smart transportation, smart home buildings, smart utilities, smart citizen services, smart governance, smart mobility, and other applications. The smart citizen services have the highest market share in the Global Smart Cities Market in 2021. This is because citizen safety is the major priority for every government organization. People are highly dependent on the safety services that are offered by the government at different levels.
Asia Pacific has the fastest CAGR in the Global Smart Cities Market
Asia Pacific is estimated to register the fastest CAGR during the forecast period due to the presence of some of the most well-known technology-enabled metropolises in the region which include Singapore, Tokyo, and Seoul. Moreover, according to the IMD’s inaugural Smart City Index, Singapore is the smartest city in the world. Furthermore, due to the large number of 5G deployments and initiatives taken by major Asian mobile operators to resolve the problem of high bandwidth requirement, the smart cities market in APAC is expected to have enormous growth in the coming years.
Competitive Insight
The key players in the Global Smart Cities Market are Accenture Plc, Alphabet Inc., Cisco Systems Inc., Foxconn Electronics Inc., General Electric Company, Huawei Technologies, IBM Corporation, Oracle Corp., Qualcomm Technologies Inc., and Schneider Electric SE among others. Through extensive research, it is found that big players have adopted various competitive strategies such as mergers & acquisitions in order to have a grip of emerging market. Furthermore, leading companies expanding their geographical boundaries by acquiring small brands and domestic companies.