Saudi Arabia Smart Cities Market

Market Overview:

Saudi Arabia smart cities market size reached USD 13,209.6 Million in 2024. The market is projected to reach USD 29,228.7 Million by 2033, exhibiting a growth rate (CAGR) of 9.2% during 2025-2033. The rapid urbanization, which is putting pressure on city infrastructure, leading to increased congestion, pollution, and resource demands, is driving the market.

Smart cities are urban environments that leverage technology and data to enhance efficiency, sustainability, and the quality of life for residents. These cities integrate advanced technologies like the Internet of Things (IoT), artificial intelligence, and data analytics to optimize various aspects of urban living, such as transportation, energy, healthcare, and public services. Smart cities aim to improve resource management, reduce environmental impact, and enhance overall urban functionality. Key features include smart infrastructure, real-time data monitoring, and interconnected systems that facilitate seamless communication between different city components. The goal is to create cities that are more responsive, adaptive, and citizen-centric, ultimately fostering innovation, economic development, and a higher standard of living for residents. Smart cities represent a holistic approach to urban development, using technology as a tool to address complex challenges and create more sustainable, resilient, and inclusive urban environments.

Saudi Arabia Smart Cities Market Trends:

Increasing use of Internet of Things (IoT)

Rising adoption of the IoT is fueling the market growth. According to the IMARC Group, the Saudi Arabia IoT market size reached USD 9,490.7 Million in 2024. IoT sensors and devices collect data from transportation, energy, water, waste, and public safety infrastructure, allowing city authorities to make informed decisions and respond quickly to issues. Smart traffic systems reduce congestion and improve mobility, while IoT-enabled utilities optimize energy utilization and water usage. In waste management, sensors track bin levels and improve collection routes, thereby increasing efficiency. Public safety benefits from surveillance systems and emergency response integration. IoT also supports smart buildings by monitoring lighting and occupancy for better energy use. As urban areas are growing, IoT assists cities in scaling services without compromising performance.

High internet penetration

High internet penetration is providing the essential connectivity needed to support digital infrastructure and smart technologies. According to the Saudi Internet 2024 report from the Communications, Space and Technology Commission, around 48.6% of internet users in Saudi Arabia engaged in internet activity for seven hours or more daily. With a significant part of the population gaining access to high-speed internet, it is becoming more feasible to implement and operate cloud-based platforms and data analytics tools across city services. Citizens are actively employing online portals and mobile apps to access smart services like transportation updates, utility payments, and public safety alerts. High connectivity ensures seamless communication between devices, systems, and users, which is vital for real-time monitoring and efficient city management. It also enables greater citizen participation and engagement, as residents can report issues, give feedback, and stay informed.

Rising focus on improving transportation systems and traffic management

As cities are expanding, there is a growing need to reduce traffic congestion, enhance road safety, and ensure efficient movement of people and goods. Smart traffic signals, real-time traffic monitoring, and artificial intelligence (AI)-based route optimization help ease congestion and shorten travel times. Public transport systems benefit from digital tools that track schedules, monitor usage, and provide real-time updates to commuters. Integrated mobility apps offer users seamless travel planning, combining buses, metros, and ride-sharing services. Smart parking systems are employed to guide drivers to available spots, reducing fuel waste and road stress. As per industry reports, the smart parking market in Saudi Arabia expanded at a double-digit CAGR exceeding 19% from 2019 to 2024. These advancements not only improved urban mobility but also lowered emissions and energy utilization. This focus on smarter transportation is strengthening the infrastructure backbone of smart cities in the country.

Saudi Arabia Smart Cities Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country level for 2025-2033. Our report has categorized the market based on focus area.

Focus Area Insights:

• Smart Transportation
  • Smart Ticketing
  • Traffic Management System
  • Passenger Information Management System
  • Freight Information System
  • Connected Vehicles
  • Others
• Smart Buildings
  • Building Energy Optimization
  • Emergency Management System
  • Parking Management System
  • Others
• Smart Utilities
  • Advanced Metering Infrastructure
  • Distribution Management System
  • Substation Automation
  • Others
• Smart Citizen Services
  • Smart Education
  • Smart Healthcare
  • Smart Public Safety
  • Smart Street Lighting
  • Others

The report has provided a detailed breakup and analysis of the market based on the focus area. This includes smart transportation (smart ticketing, traffic management system, passenger information management system, freight information system, connected vehicles, and others), smart buildings (building energy optimization, emergency management system, parking management system, and others), smart utilities (advanced metering infrastructure, distribution management system, substation automation, and others), and smart citizen services (smart education, smart healthcare, smart public safety, smart street lighting, and others).

Regional Insights:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

The report has also provided a comprehensive analysis of all the major regional markets, which include Northern and Central Region, Western Region, Eastern Region, and Southern Region.

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Saudi Arabia Smart Cities Market News:

• April 2025: The King Abdullah Financial District Development and Management Company (KAFD DMC), alongside Huawei revealed the introduction of Saudi Arabia's inaugural smart WiFi-7 service. It aimed to improve digital infrastructure for dwellers and visitors in the area. As a vital part of KAFD’s Smart City Platform, leveraging AI and data analytics, the adoption of WiFi-7 would refine digital services.
• April 2025: AlUla became part of the IMD World Smart Cities Index 2025, published by the International Institute for Management Development, together with five other cities in Saudi Arabia: Makkah, Madinah, Riyadh, Jeddah, and Al-Khobar. This achievement highlighted the Kingdom's dedication to its Vision 2030 agenda, focused on converting urban areas into smart cities via innovative projects spearheaded by the Saudi Data and AI Authority in partnership with multiple government agencies. The aim was to develop intelligent cities that could enhance the quality of life to the greatest standards.
• February 2025: Advanced Telecommunications Solutions and Services (ATSS) and Iridium Communications Inc. teamed up to enhance smart city connectivity within the Kingdom of Saudi Arabia. They would work together to implement cutting-edge solutions that could improve urban infrastructure, connectivity, and automation. This would enhance intelligent traffic control, environmental observation, public safety, facility management, and industrial automation by utilizing satellite connectivity and AI-based technologies.
• February 2025: Orange Business was set to provide subscription-based ‘Smart City’ solutions in Saudi Arabia. The service would create ‘Smart City’ applications for cloud deployment, taking advantage of the sector’s swift expansion. The updated model might lower expenses by 40 to 60% and shorten adoption time by as much as 80%. Al-Jeraisy, the managing director for Saudi Arabia and Africa, also emphasized the adaptability of the subscription-based model, enabling customers to select particular smart city services as required.
• November 2024: Tilal Real Estates, the prominent Saudi firm, initiated a new endeavor to construct a smart city on the eastern side of the Gulf Kingdom, with an estimated cost of approximately 6 Billion Saudi Riyals (USD 1.6 Billion). The three-phase initiative was anticipated to be finalized in four years and would enhance Khboar’s reputation as an appealing place for living and investment.
• August 2024: Naver launched an innovative five-year project in collaboration with the Saudi Arabian government to create digital twin platforms for smart cities in Saudi Arabia. This bold initiative, a key element of Saudi Arabia's smart city plan, sought to revolutionize urban design, infrastructure oversight, and emergency readiness. Utilizing its cutting-edge cloud technology and AI-based solutions, Naver would generate extremely precise 3D models of Riyadh, Medina, Jeddah, Dammam, and Mecca, achieving accuracy within 10cm. These digital twins would act as virtual representations of the cities, allowing real-time data evaluation and advanced simulations to improve urban management.

Saudi Arabia Smart Cities Market Report Coverage:

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia smart cities market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia smart cities market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia smart cities industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.