According to a new report from Swedish global research firm Berg Insight, global shipments of connected digital signage displays grew by nearly 20 percent in 2016, to 10.5 million units.

Shipments to North America reached 3 million units, while shipments to all the European Union nations totaled 2.5 million. The other 5 million went to the rest of the world.

The research firm says it expects global shipments of connected digital signs to grow at a compound annual growth rate of nearly 17 percent in the next five years to reach 22.9 million units sold by 2020.

As a result, the number of connected digital signage displays in active use worldwide will grow at a compound annual growth rate of 18 percent, from an estimated 37.6 million last year to 87.2 million in 2021.

The report says market growth is being driven by greater demand for digital signage in all markets, technological advancements and a corresponding drop in prices.

The report says the digital signage industry is highly fragmented, with a lot of companies competing for business. However, a noticeable trend is the increasing numbers of mergers and acquisitions, it says.

“The most significant deal on the digital signage market in the past few years is Stratacache’s acquisition of Scala in 2016 which contributes to a broad global footprint and total revenues expected to surpass the billion dollar mark in the near-term,” says Rickard Andersson, senior analyst with Berg Insight.

Dayton, Ohio-based Stratacache, a digital signage and content distribution solutions provider, has done multiple acquisitions in the digital signage space over the years, most recently with Real Digital Media, which it acquired in early 2017.

“While the consolidation trend contributes to limiting the number of participants in the marketplace, there is also a continuous inflow of new players including start-ups eyeing the digital signage industry,” says Andersson.

He adds that one area where new companies will likely continue to emerge is new Internet of Things software solutions for digital signage.

“There are promising opportunities in this space for software solutions that make it easier to integrate various data sources and marketing channels with digital signage systems,” Andersson says.