On a sweltering morning, you leave home. After closing the door, your phone alerts you that all indoor lights are off and the door is locked. Meanwhile, your car has automatically activated its cooling system, so by the time you reach the garage, you can step straight into a refreshingly cool cabin... Such scenarios are no longer mere fantasy. How far has the Internet of Things (IoT) advanced today? And where will it head in the next five years?
Today's smart homes allow remote control of appliances, lights, and curtains via smartphone, voice activation of device settings at close range, and real-time monitoring of home environments through installed cameras and sensors. Yet such home IoT systems remain limited in adoption. Beyond the high cost of building the entire ecosystem, concerns include trust issues, security uncertainties, and privacy breaches.
The current "density" of IoT integration remains insufficient. Yet technological advancements have made it unacceptable for savvy consumers to purchase consumer electronics or smart home devices lacking so-called IoT interactivity. It's hard to imagine new products without connectivity, or those incompatible with apps, mini-programs, or official accounts.
However, IoT is no longer a core selling point. Instead, it must complement capabilities like performance, AI, and screens to create a comprehensive experience that captures market share.
To better explore IoT industry trends, we surveyed global clients, receiving 2,095 completed questionnaires from IoT solution engineers across 60 countries. This data forms the basis of our Global IoT Trends Report. How will the global IoT landscape evolve over the next five years? Let's explore.
Where are the industry growth drivers?
The top three industries with the greatest IoT growth potential over the next five years are industrial automation and control, home automation, and artificial intelligence. Within industrial automation and home automation, machine-to-machine (M2M) communication and remote monitoring are projected to be the fastest-growing applications. These include remote device monitoring, optimization of industrial processes and facilities, and connectivity for consumer electronics and smart devices. Simultaneously, the pandemic has accelerated IoT adoption in healthcare, transforming patient diagnostics and monitoring while aiding vaccine tracking and inventory management. With surging demand for connected medical devices, 25% of participants identify healthcare as the next major industry to leverage IoT for human health. Other sectors showing high IoT growth potential include smart cities, energy management, automotive and transportation, and wearable devices.
However, Industry 4.0 remains in its developmental phase, with slow growth in Manufacturing 4.0 and the Industrial Internet of Things (IIoT) primarily attributed to reliance on legacy systems, complex integration processes, skill shortages, and a lack of business-driven approaches. The three primary reasons for Industry 4.0's slow growth-concerns over data security, lack of business strategy, and the difficulty and technical limitations of retrofitting within existing complex legacy systems-hinder the adoption and integration of smart manufacturing solutions.
Modern manufacturing processes are more interconnected than ever, with more machines, equipment, and employees supported by networked sensors transmitting data throughout the factory. Problems arise when companies cannot share information within their own networks or leverage this data to enhance business strategies. Edge computing represents the future direction-explore our article on Industrial IoT Edge Computing for details.
As systems grow increasingly complex, vulnerabilities multiply, making security the foremost challenge for IoT. Thirty-six percent of participants cited security as the primary obstacle in adopting IoT connectivity technologies. Additionally, ownership of data collected by edge devices remains a contentious issue. How data is collected, shared, and utilized concerns users, who cannot verify if their personal information is being misused. The risks associated with data collected by edge devices are significant-if stolen, the consequences could be unpredictable. This makes determining data ownership a critical factor for IoT success.
Seventy percent of participants believe data ownership should remain with users, especially when privacy cannot be guaranteed, as such data is easily exposed to third parties. Users hesitate to share data with companies due to concerns about identity theft and cybersecurity risks.
From smart cities and factories to smart homes, IoT enables objects to connect and exchange data. Resolving data security issues allows collected data to drive operational improvements or cost reductions, resulting in higher quality, greater efficiency, and extended product lifespans. Forty-eight percent of participants identified enhanced productivity and manufacturing capabilities as their primary objectives, highlighting IoT's greatest business impact in these areas.
30% of participants viewed themselves as IoT innovators seeking to explore business opportunities and gain competitive advantage through IoT solution development, while 27% aimed to capitalize on market opportunities. Despite the rapid growth of the IoT solutions market, developing such solutions remains a highly strategic decision. It involves data security concerns and requires significant time to yield results. As more enterprises join the ecosystem, the IoT development landscape continues to mature. Therefore, for companies, innovating IoT solutions is more critical than ever-it's not merely about following industry trends. The more effectively a company innovates, the greater its chances of success.
What are the key technological priorities?
A persistent challenge in IoT's evolution is ensuring interoperability between devices from different manufacturers and facilitating easy development of new user applications. Currently, no global standard exists for communication between diverse devices, with each group adhering to distinct protocols. Participants identified factors that could accelerate IoT adoption, including interoperability, ease of development, demand for open standards, and connectivity standards. The pace of IoT innovation is rapid. Seizing this massive market opportunity requires achieving interoperability across all industries to connect customers, businesses, and products. However, standards should be open, allowing anyone to easily design and build technology under these frameworks.
Current IoT devices do not extensively utilize artificial intelligence (AI) and machine learning. Nevertheless, the survey revealed that 39% of participants have already incorporated AI into their IoT designs and applications. Among the remaining participants, 47% plan to use AI in their next IoT design or application to build smarter devices. From autonomous vehicles to facial recognition software, AI is transforming how we interact with the world as hardware costs decrease and processing speeds increase.
IoT edge devices communicate via standard wired and wireless channels, including receiving sensor measurements and enabling remote control by operators. Interactions between edge devices, gateways, and cloud platforms within IoT solutions require diverse approaches to meet varying needs. Results show 77% of participants selected wireless communication, while 23% chose wired communication.
Among wireless options, WiFi is most popular due to its remote connectivity, security, and higher throughput, enabled by the latest low-power MCUs with WiFi capabilities. Cellular and Bluetooth Low Energy (BLE) follow closely, with BLE's market share surging 12% over the past three years, driven by low-power modes and rapid adoption of Bluetooth 5.0. Cellular market share has grown by 9% over the past three years. The recent rise of 5G enhances connectivity by significantly increasing cellular bandwidth, making it easier for IoT to connect large numbers of devices.
Among wired communication, 83% of engineers prefer Ethernet. Ethernet connections offer high reliability and security, providing the optimal solution for high-speed streaming devices like IP cameras or VoIP phones.
IoT systems require diverse software development languages to implement functionality. 65% of participants still choose C/C++ for its advanced capabilities in I/O, code management, data structures, and file storage, followed by Python (45%) and JavaScript (22%).
Hardware development presents numerous challenges, making proper design critical. When deciding between in-house design or off-the-shelf solutions for cost-effective implementation and faster time-to-market, hardware selection is vital. 48% of respondents use single-board computers (SBCs) to accelerate and simplify design. SBCs are compact, feature onboard connectivity (Ethernet, WiFi, BLE), USB, and additional interfaces (I2C, SPI, UART), and are ready to use out-of-the-box (running Linux). Different SBCs address specific hardware requirements, where memory and storage are critical for embedded systems. Compact embedded Linux distributions further minimize memory and storage footprints.
However, 32% of participants opt to start from a blank slate, allowing the system to dictate final specifications that deliver outstanding performance and robust reliability at the lowest possible cost. For enterprises, "build versus buy" remains a complex dilemma. Developing in-house solutions demands investment and time, yet ownership and full control take precedence. The processing power and functionality of IoT hardware are determined by microprocessors (MPUs) or microcontrollers (MCUs). The next challenge for engineers is selecting the appropriate MPU/MCU for their design, with 39% of respondents favoring STMicroelectronics development platforms.
The cloud platform is the core component of enterprise IoT implementation. It plays a critical role in building secure, large-scale IoT infrastructure, enabling businesses to collect, analyze, and process IoT data from sensors, devices, and applications to drive sustainable operations. Thirty-four percent of participants explicitly expressed a preference for private clouds. Private clouds are more difficult for hackers to breach, incur no costs, and allow local data access.
Sensors, used to collect data, form the core of every connected device. From positioning and identification to monitoring and protecting critical infrastructure, sensors serve as the eyes and ears of IoT solutions, converting captured physical information into electronically measurable signals. Effective sensor management and deployment are vital components of IoT processes, with sensor selection dependent on factors such as usage, accuracy, and battery life. The most common sensors are environmental sensors, measuring temperature, humidity, pressure, and gases, among others. The second most prevalent category is motion sensors.
From this trend report, we can conclude that innovative solutions targeting smart homes, industry, markets, and government are paving the way for the future of IoT. IoT is firmly on the agenda of customers and partners and is highly sought after, yet no single entity can claim to be leading the charge. The IoT holds immense potential, and some leading companies have already taken action-Google, Apple, and Amazon have recently entered the home automation market. What does this mean for other businesses?
Less than 25% of engineers believe their company will play a dominant role in the IoT, but it's still too early to tell. Who will lead the pack in the future? Only time will tell.