Daily Management Review

Hitachi to invest $ 2.8 billion in the Internet of Things


05/12/2016


Internet of things (IoT) segment continues to develop. IT-market players are entering the turf battle by investing in this area. and Japanese Hitachi does not want to miss the opportunity, either. Recently, the company announced an investment in the IoT in the size of nearly $ 3 billion.



Dometorres via wikimedia
Dometorres via wikimedia
The manufacturer of power units, construction machinery and high-speed trains is betting on the Internet of Things technology to promote its sales. Keiji Kojima, head of Hitachi’s division of services and platforms told that during the next three years, the company plans to invest $ 2.8 billion in the development of IoT-business.

The sum is be spent on absorption of other companies involved in developments in this area, capital expenditures, as well as the company’s own research in the field. To develop the IoT direction, Hitachi has created a special unit Insight Group, headquartered in Santa Clara (California, USA). This structure will receive an investment of 100 billion yen ($ 918 million), said Kojima.

Hitachi’s Insight Group, headed by Mr. Kojima, is tasked to obtain maximum benefit from combination of Hitachi’s proposed processing and information technology with Lumada, the new open IoT-platform. It will include data management tools, analytics streaming and other software development.

At the end of the last fiscal year, closed 31 March 2016, Hitachi’s revenue on the IoT market reached $ 5.4 billion, accounting for 6% of the projected total turnover. The company will publish the final financial report on May 13, 2016. Analysts surveyed by Bloomberg expect consolidated revenue of 9.95 trillion yen ($ 91.6 billion). 

Hitachi is not a newcomer on the IoT market. The company already has some implemented projects in the field. One of the latest Hitachi’s development was complied with British operator Vodafone Group. The companies have developed a system of preventive maintenance for trains, which collects data from multiple sensors.

According to analysts of IC Insights company, volume of IoT world market will double in the coming years. In 2019, total revenue from sales of manufacturers of various kinds of IoT solutions is expected to reach $ 124.5 billion. 

IC Insights’ study also reported that the strong growth of the IoT market will boost annual increase in sales of chips for these solutions by an average of 15.9% in the 2015-2019 biennium. By the end of this period, the sales volume of these chips will be measured $ 19.4 billion, analysts predict.

They also note that in the period from 2014 to 2019, the fastest growing segment of the industry will be IoT-wearable electronics. Total revenues from the vendors will grow on average by 59% per year.

source: bloomberg.com






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