The ‘smart city’ market

What is the ‘smart city’ market?

Not an easy question. Ask people what exactly they mean when they say ‘smart city’, and you will likely trigger a discussion of what this actually is, smart city. Nevertheless, there are some common themes among these discussions. Ideas like “networks”, “I can do many daily-life-things via my smartphone”, “fewer traffic jams”, “better use of resources such as electric power”, and others usually come up.

Look up “smart city” on Wikipedia, and it says, “a smart city is an urban area that uses different types of electronic data collection sensors to supply information which is used to manage assets and resources efficiently.”

OK, so now we have concepts like “electronic data collection”, “information supply”, “asset management”, “resource management”. And, of course, there is a lot more in this Wikipedia article. So we could read the article, make a list of what we think are core concepts, and then somehow try to get market information for each of these concepts. By “market information”, we probably mean things like the estimated size and growth of a market, and perhaps also its main players.

‘Smart city’ market estimates from Mergeflow

Here, we took a different route, one that requires a lot less work. We simply searched for “smart city” OR “smart cities” in Mergeflow, and looked at the market estimate information that Mergeflow extracted from worldwide news, press releases, etc. that mention “smart city” or “smart cities”.

For our search, we got 144 market estimates from Mergeflow. In addition to extracting the market estimate data from news and other sources, Mergeflow also normalizes the data and then shows them in an interactive chart. This chart shows, probably not very surprisingly, that the IoT market is the biggest:


The biggest markets

We then looked at market estimates that are related to ‘smart city’ but that are not explicitly on ‘smart city’. Here are the top market estimates by estimated size in 2018 (notice that the “smart transportation market” appears twice because the two estimates differ slightly, which is information we think is important to show):


Looking at the names of these market segments almost creates a mental image of a city and at least some of its components. What we did find a bit surprising is the size of the estimate for the “public safety and security market”. As key players here, in the context of ‘smart city’, Mergeflow identifies giants such as Alcatel Lucent, Cisco, Esri, Honeywell, IBM, Northrop Grumman, and Thales.

And in case you were wondering (we were), VoWLAN means ‘Voice over WLAN’. Besides the “usual suspects” like AT&T, Broadcom, Cisco, or Huawei filing for patents related to this technology, Mergeflow tells us that there are other, perhaps less obvious, companies like D2 Technologies ( active in VoWLAN.

The fastest-growing markets

Next, we looked at the markets with the biggest estimated growth rate (CAGR). Here are the top results:


For LPWAN, the fastest-growing market (according to the estimate at least), Mergeflow identifies emerging companies such as Actility, who received $75 Mio in Series D funding in 2017. Others include eleven-x, Senet, Chifco, or LinkLabs.

Fog computing (a synonym for ‘edge computing’) rings a bell here. A bit more than a year ago, in another post, we already looked at edge computing as an emergent technology. Interestingly, in the chart above, the “global fog computing market” is estimated differently than the “edge computing” market. Looking at the underlying data in Mergeflow shows that the (smaller) “edge computing” market estimate is from 2017, whereas the (bigger) “fog computing” estimate is only five days old. It may well be that since 2017 the market has gained more traction, which is then reflected in the newer market estimate.

Surprisingly, at least to the uninitiated like us, is that there is something called lighting as a service. According to the estimate, a 46% CAGR market. In this space, Mergeflow identifies VC-backed companies such as Digital Lumens, and, even more recently,  Future Energy Solutions. Patents in the area are awarded to big incumbent companies such as Matsushita, Panasonic, or Sharp, but also to Chinese companies such as Shenzhen Mason Technologies or Suzhou Zhongze Optoelectronics (whose website is not always accessible, but if it is, it is here).

Next steps

In this article, we just wanted to give a taste of how market information, obtained via Mergeflow, can help make somewhat abstract concepts like ‘smart city’ more concrete. As a next step, we will follow up on this and look at ‘smart city’ in a more comprehensive case study. We will keep you updated here.


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