IoT systems revenues for industrial Internet applications are now forecast to grow 17.7% in 2018 to $35.9 billion, while the connected cities segment—covering government-funded infrastructure, “smart” roadways and bridges, streetlights, power grids and other utilities, public-safety video security networks, environmental and weather monitors, and other systems—is expected to increase 7.0% this year to $38.8 billion.

The strongest growth in 2018 is still expected to occur in the IoT-connected vehicle category, which is forecast to rise 21.6% this year to $4.5 billion. IoT sales generated by connected home systems are forecast to grow 16.0% in 2018 to $2.9 billion, while the wearable category (including Internet-enabled smartwatches and medical units) is expected to rise 12.4% to $11.8 billion this year.

IC Insights lowers the projected 2016-2021 sales growth rate in three IoT end-use market categories with wearable systems going from a CAGR of 12.8% to 11.9%; connected homes applications dropping from a CAGR of 16.8% to 14.8%; and the industrial Internet segment being eased back from a CAGR of 18.7% to 17.8% in the five-year period. The sales growth forecast in connected vehicle systems remains unchanged at a strong CAGR of 22.9% between 2016 and 2021. Automotive Internet applications are accelerating as carmakers race each other to add more automated controls and driver-assist features for greater safety and create vehicles that are aware of their locations, road conditions, and changes in weather as well as communicate with each other. The five-year growth forecast in the connected cities category has been raised slightly, going from a CAGR of 6.3% to a 6.5% annual rate of increase in the MD18 update.