With a growing number of use cases for connected devices at play within homes and cities, Gartner says the segment will represent 81 percent of all connected things in use by 2020.
The research firm has remained consistently optimistic with its IoT forecasts. In November, Gartner released figures for the processing, sensing and communications semiconductor device arenas, predicting the markets to grow 36.2 percent in 2015.
The analyst firm followed up in January with an equally bullish sales forecast, predicting that the IoT boom would drive semiconductor sales to $358 billion in 2015.
According to Bettina Tratz-Ryan, research vice president at Gartner, the majority of IoT spending for smart cities will come from the private sector, which is good news for technology companies and service providers that stand to benefit most in terms of revenue.
"We expect that by 2020, many IoT TSPs will have grown their hardware revenues through services and software by more than 50 percent," Tratz-Ryan said. She goes on to say that smart-home security and safety will represent the second-largest service market by revenue in 2017, and that by 2020, the smart healthcare and fitness market will have grown to nearly $38 billion.