Bluetooth Smart Evolution Helps the Technology Break into Key IoT Market Verticals

With the Bluetooth 5 specification and mesh networking capabilities both set for release in the near future, 2017 will mark another milestone in the development and evolution of Bluetooth technology as a leading connectivity solution across the IoT. ABI Research forecasts Bluetooth Smart and Smart Ready devices will break 5 billion shipments by 2021 as technical enhancements open up new opportunities, use cases, and device types for the technology. Outside of the mobile space, key IoT market growth areas will include the smart home and smart lighting, beacons, and wearables, among others.

“While smartphones and audio accessories remain Bluetooth’s largest markets, the technology is becoming more attractive to low-power IoT applications,” says Andrew Zignani, Industry Analyst at ABI Research. “Though Bluetooth still faces strong competition from the other standards, mesh networking will enable new opportunities for the technology in the smart home, building automation, and emerging IoT markets in which robustness, low latency, scalability, minimal power consumption, and strong security are all additional critical requirements.”

A significant number of Bluetooth-enabled smart lighting products arrived to market over the past few years. With the standardization of mesh networking imminent, device capabilities can be taken to the next level. For instance, Bluetooth-enabled smart lighting products can now control lighting across an entire smart home or smart building from a single gateway or controlling device, like a smartphone. This puts Bluetooth on a more even playing field with other mesh networking technologies, such as Z-Wave or 802.15.4-based ZigBee and Thread, which key industry players and the Connected Lighting Alliance endorse for residential and professional indoor lighting applications.

Bluetooth beacons will remain an enormous opportunity for the technology through personal tracking tags, retail, and advertising. Bluetooth beacons in these markets will achieve a CAGR of 133% between 2016 and 2021, forecasts ABI Research. Increased broadcast messaging capacity in Bluetooth 5 will help drive these markets, as beacons will be able to provide much higher quality content and richer contextual information than ever before.

Apple’s removal of the headphone jack from the iPhone 7 and iPhone 7 Plus will also likely help drive adoption of Bluetooth wireless headsets, headphones, and still emerging hearables. Mobile accessories are still set to account for 13% of Bluetooth device shipments in 2021, while growth for Bluetooth in speakers and the automotive segments highlights the continued importance of audio in the marketplace. Different codecs, such as Qualcomm’s aptX HD and Sony’s LDAC, recently led to improvements in the quality of Bluetooth for audio streaming. Forthcoming speed and bandwidth enhancements with Bluetooth 5 will further increase audio quality in devices that support the new specification.

These findings are from ABI Research’s Market Data for Bluetooth report.