South Africa IoT Market

Market Introduction

South Africa is among the most advanced countries in the African region. Ongoing digitization in the territory of South Africa is triggering technological developments in the communications, automotive, and manufacturing industries. IoT presents a huge opportunity for the progress of these businesses.  Being a developing economy, several emerging companies in South Africa are venturing into the market with the need for cost-efficient manufacturing units. Infrastructure, healthcare, and automotive are the major sectors in the country. The integration of IoT and other advanced technologies in these sectors is projected to grow with the rising demand for streamlining the respective businesses. The rapid pace of urbanization and digitalization, construction of smart cities, and increasing adoption of smartphones and other consumer electronic devices are among the major factors driving the need for 5G technology in the IoT market which will lead to South Africa IoT market growth during the forecast period.

The Internet of Things (IoT) enables the use of data to support smart decision-making, which can simplify everyday lives. According to the IoT Industry Council of South Africa, IoT is anticipated to reach an installed base of 21.5 billion active, connected devices by 2025, despite some false starts and a difficult global economic environment. Consumer electronics, smart cities, smart homes, intelligent industrial applications, and automation quickly adopt IoT. Developing the Industrial Internet of Things (IIoT) would help diversify South Africa’s economy by expanding its manufacturing sector and capitalizing on a strong IT sector. Moreover, South Africa has also seen investments in the magnification of the scope of IoT.

Market Overview and Dynamics              

The South Africa IoT market size is expected to grow from US$ 4,977.8 million in 2022 to US$ 31,558.9 million by 2028; the South Africa IoT market size is estimated to grow at a CAGR of 36.0% from 2022 to 2028.

The rapid rollout of the 5G network in South Africa by various telecom providers is creating lucrative opportunities for the South Africa IoT market growth. In February 2020, Vodafone announced a 5G service in South Africa using the network built by Liquid Telecom. Similarly, in July 2020, MTN, a South African operator, announced the initial deployments of 100 5G suits. The network is likely to encompass Cape Town, Bloemfontein, and Port Elizabeth. Further, the COVID-19 pandemic has accelerated developments in the 5G marketplace in South Africa. However, the service providers are facing challenges in the form of the lack of harmonized spectrum coverage, which is delaying the large-scale implementation of these networks in the country.

The Independent Communications Authority of SA (ICASA) announced the approval of the temporary allocation of high-value 4G and 5G spectrum frequencies to mobile operators in April 2020 to be able to meet increased network traffic needs and surged consumer demands for the spectrum by 2023. Several service providers—including MTN (the largest provider in the nation), Vodacom (the largest mobile network provider), Liquid Telecom (fixed-line and broadband provider), and Rain SA—have already launched non-standalone and commercial-standalone 5G in South Africa. With the major focus of telecommunication service providers on this issue, the early rollout of 5G is expected in South Africa.

The automotive industry is another industry that will present opportunities for the South Africa IoT market growth. In the automotive sector self-driving cars, security features, data analytics, in-vehicle infotainment, predictive maintenance, and real-time monitoring, and dashboard reporting are among the key areas for IoT implementation. Increasing disposable incomes and rising middle-class population are the major factors driving car sales in South Africa. According to the Marklines estimates, passenger car sales in South Africa reached 28,965 units in December 2019, with 9.1% Y-o-Y growth over the sales in December 2018. The high level of competition in the automotive sector is propelling automotive companies to adopt advanced technologies such as IoT and AI. Audi, BMW, General Motors, Mercedes-Benz, etc., are a few of the major automakers offering advanced infotainment systems integrated with various technologies into their cars. TomTom Africa (Pty) Ltd. is one of the key IoT players catering to the automotive sector in South Africa. Moreover, the mounting demand for connected vehicles, coupled with rising investments in autonomous cars, are further boosting the adoption of IoT and efficient communication technologies, such as 4G and 5G. Automotive systems that can be enhanced with the implementation of IoT technologies in logistics management, fleet management, telematics, sensor sharing, advanced driver assistance systems (ADAS), infotainment, and autonomous driving, which is bolstering the demand for IoT products in South Africa.

Key Market Segments

South Africa IoT market analysis by offering, the South Africa IoT market is segmented into hardware, software, and service. In 2021, the service segment accounted for the largest South Africa IoT market share. The South Africa IoT market for the hardware segment is sub-segmented into processors, sensors, connectivity modules, memory devices, and others. In 2021, the connectivity modules segment dominated the South Africa IoT market share in 2021. South Africa IoT market analysis by end-user, the South Africa IoT market is segmented into manufacturing, energy and utilities, BFSI, IT and telecom, automotive and transportation, retail, residential, commercial, and others. In 2021, the others segment led the market with the largest South Africa IoT market share.

Major Sources and Companies Listed

A few key primary and secondary sources referred to while preparing the report on the South Africa IoT market are company websites, annual reports, financial reports, national government documents, and statistical databases. Further, Communica South Africa; COREX (PTY) LTD; SAS Institute Inc.; SAP SE; QUALCOMM INCORPORATED; Bosch.IO GmbH; CISCO Systems, Inc; Google Inc.; Hewlett Packard Enterprise Development LP; IBM Corporation; Microsoft Corporation; Oracle Corporation; First Distribution; Pinnacle Solutions, Inc.; Axiz (Pty) Ltd; Syntech; Mustek Limited; Rectron; Drive Control Corporation; Frontosa Technologies; VMware are among the leading companies listed in the South Africa IoT market report.

South Africa IoT Strategic Insights

Strategic insights for the South Africa IoT provides data-driven analysis of the industry landscape, including current trends, key players, and regional nuances. These insights offer actionable recommendations, enabling readers to differentiate themselves from competitors by identifying untapped segments or developing unique value propositions. Leveraging data analytics, these insights help industry players anticipate the market shifts, whether investors, manufacturers, or other stakeholders. A future-oriented perspective is essential, helping stakeholders anticipate market shifts and position themselves for long-term success in this dynamic region. Ultimately, effective strategic insights empower readers to make informed decisions that drive profitability and achieve their business objectives within the market.

South Africa IoT Report Scope

South Africa IoT Regional Insights

The geographic scope of the South Africa IoT refers to the specific areas in which a business operates and competes. Understanding local distinctions, such as diverse consumer preferences (e.g., demand for specific plug types or battery backup durations), varying economic conditions, and regulatory environments, is crucial for tailoring strategies to specific markets. Businesses can expand their reach by identifying underserved areas or adapting their offerings to meet local demands. A clear market focus allows for more effective resource allocation, targeted marketing campaigns, and better positioning against local competitors, ultimately driving growth in those targeted areas.