Smartphones, tablets and other Internet-connected devices will become widespread among the Chinese population by 2020, a recent study shows. This proliferation of mobile connectivity is set to foster growth in several industries and should above all help stimulate innovation in the country.

China Has Positioned Mobile Technology at the Centre of its Innovation Strategy

The Middle Kingdom is the largest mobile market in the world, with over a billion connections. Now the Chinese seem determined to take full advantage of this trend leadership by creating new applications, products and services that can improve people’s daily lives and advance its economy. The GSM Association (GSMA), which represents the interests of mobile communications operators worldwide, has just published a report in partnership with Machina Research, which predicts that the business impact from the growth of connected devices in China – what it calls the ‘Connected Life’ market – will increase six-fold from $116 billion in 2012 to $707 billion in 2020.

Stimulating innovation

The growth prediction for China is the highest in the Asia Pacific region. Japan, the region’s second leading ‘Connected Life’ market, is on course to unlock a business impact from connected devices that is forecast to be worth $344bn in 2020, up from $96bn in 2012. Meanwhile, India will see a business impact from connected devices of $128bn in 2020, scarcely higher than China’s 2012 market figure. The report shows that smartphones, tablets and other consumer electronic devices are contributing significantly to innovation and fostering advancement in key industries across the region. Among the sectors which should benefit most from the expansion of these technologies, GSMA firstly points to the automotive industry. The advent of ‘connected’ cars, with geolocation technology that enables real-time charging for hired vehicles, should spur the growth of both car share schemes and hire-purchase arrangements. Another major winner from this technology should be ‘connected’ private building security services, says the report.

A rosy future for the automotive and building security sectors

China’s automotive ecosystem, which represents $14bn in 2012, is forecast to rise to $198bn by 2020. The country is clearly leading the market in the Asia Pacific region for vehicles with built-in connectivity, with Japan a long way behind on $36bn and India following even more distantly with a projected $18bn by 2020. Meanwhile the growing adoption of connected private building security – notably alarm systems, CCTV surveillance and intercoms – is also fuelling a huge market opportunity across the region, says the GSMA-Machina Research report. In China, the value of these connected security systems is estimated to reach $62bn in 2020, compared with $21bn for Japan and just $14bn for India.