Bluetooth 5 Evolution will lead to widespread deployments on the IoT landscape

London, United Kingdom - 25 Jul 2016

With the new technical enhancements enabled by Bluetooth 5, mesh networking, and IP support for existing Bluetooth Low Energy chipsets, ABI Research forecasts Bluetooth-enabled device shipments will increase by an average of half a billion per year through 2021, reaching more than five billion. Bluetooth will extend beyond cable replacements and smartphones to branch out into the wider IoT landscape and result in the development of larger scale networks that no longer rely on the smartphone as a hub.

“Bluetooth is evolving from a smartphone and personal area network solution to a scalable, low-power wireless networking technology,” says Andrew Zignani, Industry Analyst at ABI Research. “This development will unlock growth in beacons, home automation, building automation, lighting, and other smart city applications over the next decade and beyond.”

Bluetooth Smart or Smart Ready devices, combined with market growth in the connected home for speakers, remote controls, smart televisions, and game consoles, has, and will continue to, help drive the market to much greater scale in the coming years.

By 2021, smartphones will still account for 40% of Bluetooth product shipments, but this will represent a 12% drop in volume share from 2015. This significant portion of the market will continue to drive the mobile accessory market, the second largest portion of devices at this time. And as mobile and computing devices rely less on physical ports, notably headphone jacks, Bluetooth accessories will further climb in volume share, expected to capture 13% of total Bluetooth product shipments by 2021.

But it is beacons that represent one of the largest opportunities for Bluetooth-enabled devices. By 2021, it will be the third largest market for Bluetooth devices, and the fastest growing of all segments. The smart home market will also see significant growth, though it will still take some time to mature. Its major advancement will stem from home automation devices, smart lighting, and smart appliances.

“As we move forward, Bluetooth will gain market share at the expense of low data rate technologies, like Thread, ZigBee, and Z-Wave, and power hungry technologies like Wi-Fi,” concludes Zignani. “While the ubiquitous presence of Bluetooth in smartphones is critical in the short to medium term, mesh networking and other new features will help Bluetooth take advantage of new opportunities across the IoT in the years ahead.”

These findings are from ABI Research’s Bluetooth market research. This report is part of the company’s Semiconductors sector, which includes research, data, and analyst insights.