IoT in Defense Market Size, Share Report, Analysis, Trends, Growth, 2030

IoT in Defense Industry Prospective:

The global IoT in defense market size was worth around USD 41.01 billion in 2022 and is predicted to grow to around USD 109.17 billion by 2030 with a compound annual growth rate (CAGR) of roughly 13.02% between 2023 and 2030.

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IoT in Defense Market: Overview

IoT technology is known as the Internet of Things. It refers to the use of advanced technological tools such as software, sensors, and communication devices to connect several systems capable of exchanging information and data through the internet. IoT is driven by concepts of computer science engineering, communication technology, and electronics as these components form the main pillar of using IoT in several end-user applications including the growing defense sector.

The changing national security needs of developing and developing countries have created a need for integrating sophisticated and functional technologies to maintain and optimally use defense equipment. IoT in defense allows countries to undertake intelligent warfare by facilitating modern battle operations that are a result of the efficient integration of human knowledge and technological capabilities of IoT devices. Physical objects used by defense units are embedded with sensors and other equipment that allow each object to communicate with other defense objects. Some of the most commonly collected and exchanged data consists of heart rate, fingerprints, face, and facial expression.

Key Insights:

• As per the analysis shared by our research analyst, the global IoT in defense market is estimated to grow annually at a CAGR of around 13.02% over the forecast period (2023-2030)
• In terms of revenue, the global IoT in defense market size was valued at around USD 41.01 billion in 2022 and is projected to reach USD 109.17 billion, by 2030.
• The IoT in defense market is projected to grow at a significant rate due to the rising application in fleet and ammunition management
• Based on connectivity technology segmentation, cellular was predicted to show maximum market share in the year 2022
• Based on application segmentation, fleet management was the leading segment in 2022
• On the basis of region, North America was the leading revenue generator in 2022

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IoT in Defense Market: Growth Drivers

Rising application in fleet and ammunition management to drive market growth

The global IoT in defense market is projected to grow owing to the increasing application of Internet of Things technology in defense fleet and ammunition management. With the constant addition of new defense equipment and other technologies, security agencies are starting to invest in intelligent tools that help them maintain a large fleet of multi-billion dollar weapons and gears. This helps the agencies stay prepared in case of a sudden need for weapon deployment.

Fleet management is crucial for controlling costs and optimum utilization of resources. The changing global order and increasing social-political tensions between cross-border territories have resulted in more countries ramping up their defense investments to ensure national security. Regional governments are either collaborating with transcontinental suppliers of weapons for new equipment or investing in domestic research & development. In August 2022, the United States announced its approval to make a sales deal with the Middle Eastern countries of Saudi Arabia and the United Arab Emirates to help the latter countries counteract the defense activities of Iran. The deal is worth more than USD 5 billion

Growing demand for advanced defense warheads to propel further sales

The changing global defense ecosystems have pushed weapon manufacturers and suppliers to invest in intense research and innovation. Key defense equipment manufacturers are using advanced technologies such as the Internet of Things, Artificial Intelligence, and Machine Learning to build highly effective military gear. The annual report of Lockheed Martin, the world’s largest manufacturer of defense machinery suggested that the company spends nearly USD 3.4 billion in independent research and development.

IoT in Defense Market: Restraints

Threats posed by cyber attackers to restrict market growth

The global IoT in defense market growth is projected to be restricted owing to the increasing threats posed by cyber criminals including terrorist groups and digital hijackers. Research indicates that 2022 was considered a critical point in cyber security mainly due to the growing penetration of Internet of Things technology. Although defense equipment cannot be easily hacked, the increasing proliferation of IoT increases the risk of cyber-attacks. In April 2023, multiple reports emerged detailing China’s investment in building cyber weapons that can hijack the enemy’s satellite. In such situations, IoT systems create more vulnerabilities.

IoT in Defense Market: Opportunities

Growing collaboration between technology companies and weapons manufacturers to create growth opportunities

The IoT in defense industry growth may be further propelled by the increasing collaboration between technology companies and leading manufacturers of modern-age highly advanced military weapons or defense tools. In October 2022, Lockheed Martin announced its partnership with Red Hat Inc. The companies aim to leverage Artificial Intelligence (AI) technologies to help the former improve its military platform services. Lockheed Martin has already adopted the cutting-edge technology Red Hat Device Edge. On the other hand, in April 2023, India and the US announced bilateral trade dealing with the manufacturing of sophisticated and modern military armaments.

Rising development of affordable IoT solutions to open new expansion windows

The rising demand for IoT solutions in the defense sector has resulted in higher initiatives to control the overall cost of IoT technologies. Developing more cost-effective alternatives will allow emerging countries to invest in IoT in their national defense strategies. In September 2023, Swisscom, a Europe-based telecommunication company, launched Enea Aptilo Connectivity Control Service (IoT CCS). The new tool is more affordable and efficient for projects using a lesser number of devices. Such innovations are likely to attract more buyers from the military, army, and naval defense units.

IoT in Defense Market: Challenges

Political turmoil surrounding defense dealings may challenge market expansion

The global IoT in defense market growth trend is likely to be challenged by the increasing political turmoil that surrounds all forms of defense dealings or undertakings. National defense is an extremely sensitive industry and it is subject to strict guidelines that regulate trade in military equipment and associated technologies. However, it also leads to more challenges for industry players since they have to navigate through a complex web of governing policies.

IoT in Defense Market: Segmentation

The global IoT in defense market is segmented based on connectivity technology, deployment, application, and region.

Based on connectivity technology, the IoT in defense industry segments are radio frequency, satellite communication, Wi-Fi, and cellular. In 2022, the highest growth was observed in the cellular segment as a result of the greater availability of cellular networks and the changing landscape around machine-to-machine (M2M) technology. Increasing investments in the 5G network are expected to broaden the growth prospects of IoT in defense and rapid communication is a critical aspect for security weapons. The global 5G industry is currently valued at less than USD 100 billion but it has the potential to cross USD 1 trillion by the end of 2030 as end-consumer needs are growing exponentially.

By deployment, the global market is divided into cloud and on-premise.

Based on application, the IoT in defense industry is divided into inventory management, fleet management, security, equipment maintenance, and others. In 2022, the highest growth was registered in the fleet management segment due to the growing need to ensure optimum utilization of the defense equipment fleet. The use of IoT allows security units to stay prepared in case of an urgent event and mobilize ammunition that is best suited for the incoming situation. Increasing defense equipment drills has also been a crucial driver for the segment. In 2021, the US states held more than 100 drills near China’s border, as per reports.

IoT in Defense Market : Report Scope

IoT in Defense Market: Regional Analysis

North America will lead with the highest growth rate

The global IoT in defense market will be dominated by North America. The US is currently the largest exporter of arms and ammunition. It also tops the ranks in terms of countries with superior-grade defense equipment. Over the years, the US has managed to hold its position owing to constant research and development. The country has some of the largest manufacturers of defense weapons such as Lockheed Martin which is currently worth USD 104 billion. Furthermore, it also has a large presence of IoT developers which allows both units to undertake seamless collaboration for further proliferation of IoT in defense equipment. The increasing collaboration between the US and other countries for the supply of world-class warheads is likely to boost regional revenue. In August 2023, the US sanctioned arms sales worth USD 500 million to Taiwan as tensions with China continued to grow. Europe on the other hand, is projected to grow steadily. France will lead the regional revenue during the forecast period.

IoT in Defense Market: Competitive Analysis

The global IoT in defense market is led by players like:

• CACI International Inc.
• Lockheed Martin Corporation
• BAE Systems plc
• Thales Group
• Raytheon Technologies Corporation
• Honeywell International Inc.
• Northrop Grumman Corporation
• SAIC
• L3Harris Technologies Inc.
• General Dynamics Corporation
• Kratos Defense & Security Solutions Inc.
• Siemens AG
• Boeing Company
• Leidos Holdings Inc.
• Cisco Systems Inc.

The global IoT in defense market is segmented as follows:

By Connectivity Technology

• Radio Frequency
• Satellite Communication
• Wi-Fi
  • Cellular

By Deployment

• Cloud
• On-Premise

By Application

• Inventory Management
• Fleet Management
• Security
• Equipment Maintenance
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa