Shanghai plans to establish an Internet of Things industry zone in Pudong New Area and develop it along with strong local industries including telecommunications, software and integrated circuits, industry officials told a forum yesterday in Shanghai.

The technology, which integrates people and devices through various networks, chips and sensors, sits on the list of developments regulators pledged to support in the government's next five-year plan.

The forum, called the Internet of Things Conference of China 2010, was the first industry summit held in the city after the country announced it would develop the sector, which is expected to revolutionize business and daily life.

From 2010 to 2012, Shanghai Zhangjiang industry zone plans to establish an Internet of Things industry zone with an annual revenue of 100 billion yuan (US$14.7 billion), according to Cui Hong, an official at Zhangjiang.

"We have strong related industries in the zone such as software, sensor and semiconductor companies, as well as leading firms like IBM," Cui told Shanghai Daily during a sideline interview at the forum. "The Internet of Things develops with many existing technologies and we have an advantage."

Zhangjiang High-Tech Industrial Park, often regarded as the city's Silicon Valley, is the national industry base for software and semiconductors.

By 2020, the world is expected to have 50 billion Internet of Things units and it's a new "trillion-dollar" market, experts told the forum.

"The combination of developing the Internet of Things and telecommunications industries is a natural choice (because the big handset makers have already developed wireless applications)," said Zhang Feng, a senior official at the Ministry of Industry and Information Technology.

By the end of April, China's mobile phone user base had reached 786.5 million, adding 39 million in the first four months, according to the ministry.

China Mobile, China Unicom and China Telecom all displayed Internet of Things applications during the forum.

China Mobile displayed mobile wallet applications, which allow people to take Metro lines and buy products with their cell phone.