The Internet of Things (IoT) stands at the precipice of a monumental transformation, profoundly reshaped by the relentless march of Artificial Intelligence. As we edge closer to 2026, the era of mere connected devices is giving way to an intelligent ecosystem where AI not only processes data but orchestrates complex interactions, makes autonomous decisions, and creates unprecedented value across industries. This convergence is not just a technological upgrade; it’s a paradigm shift that redefines operational efficiency, customer experience, and competitive landscapes.

Global Connected Devices Landscape: A Rapid Ascent

The numbers paint a clear picture of rapid expansion:

In 2024, the number of connected IoT devices reached 18.5 billion, marking a robust 12% growth over the previous year.
Looking ahead to the end of 2025, this figure is projected to surge by 14% year-over-year, reaching an impressive 21.1 billion devices globally. This forecast, though slightly adjusted due to ongoing capital expenditure deferrals and softer-than-expected demand in China, reflects sustained industry momentum.
The long-term outlook is even more startling: analysts predict the number of connected IoT devices to hit 39 billion by 2030, representing a Compound Annual Growth Rate (CAGR) of 13.2% from 2025. Projections extend beyond this, with expectations of exceeding 50 billion devices by 2035.

Beyond just connections, the market value is also skyrocketing. According to The Insight Partners, the IoT market size is forecast to reach a staggering US$ 3967.99 billion by 2030, up from US$ 611.0 billion in 2023, exhibiting a remarkable CAGR of 30.6% during the forecast period. Another report by GSMA Intelligence projects the global IoT market will attain 38.7 billion connections by 2030, growing at a CAGR of 8% between 2023 and 2030. Notably, enterprise connections are anticipated to double, comprising 63% of all IoT connections by 2030.

These figures emphasize that IoT is not a niche technology but a burgeoning mainstream force that is rapidly becoming indispensable across diverse sectors.

Defining “Connected IoT Devices”: What Counts?

It’s important to understand the scope of these figures. IoT Analytics, for instance, counts “connected IoT devices” as active nodes or gateways that concentrate end-sensors. This typically excludes traditional consumer electronics like computers, laptops, fixed phones, mobile phones, and tablets. It also omits simple one-directional communication technologies such as RFID or NFC. The focus is on active, two-way communication devices that contribute to data exchange within an intelligent network. Furthermore, connections via multiple communication standards are counted only once, and device replacements are factored into the “active connections” metric.

Key Growth Accelerators: The Forces Behind IoT’s Expansion

Several powerful forces are propelling the IoT market forward:

The Rise of Artificial Intelligence (AI): The demand for device data is increasing dramatically in line with advancements in AI. AI acts as a pivotal growth driver, enabling IoT systems to extract deeper insights, automate complex processes, and make predictive decisions. This “fusion of AI with IoT” is highlighted as a key trend expected to define the market’s trajectory.
Advancements in Connectivity Technologies: The continuous evolution and deployment of diverse connectivity options, from 5G to specialized Low-Power Wide-Area Networks (LPWANs), are crucial in enabling the vast array of IoT use cases.
The Development of Smart Cities: Global initiatives to build more efficient, sustainable, and responsive urban environments are heavily reliant on IoT infrastructure. Cities worldwide are investing significantly in smart technologies, creating massive demand for connected devices.
Increasing Resilience & Digitization in Smart Manufacturing: Industries are undergoing rapid digital transformation, with smart manufacturing leading the charge in adopting IoT to enhance operational efficiency, predictive maintenance, and supply chain resilience.

Navigating the Connectivity Landscape: Leading IoT Technologies in 2026

The backbone of the IoT ecosystem is its diverse array of connectivity technologies. In 2026, three primary wireless technologies—Wi-Fi, Bluetooth, and Cellular—will continue to dominate, collectively accounting for nearly 80% of all IoT connections. However, the nuances within each, alongside the significant growth of LPWANs, reveal critical trends and strategic choices for businesses.

The Powerhouses: Wi-Fi, Bluetooth, and Cellular

1. Wi-Fi IoT: The Unseen Giant (32% of all IoT connections)

Wi-Fi remains the single largest technology for IoT connectivity. Following a normalization in Wi-Fi IoT chipset shipments in 2024, a stronger foundation for 2025 and beyond has been established. Several trends highlight Wi-Fi’s expanding role:

Rise of Low-Power Wi-Fi: The adoption of low-power Wi-Fi is accelerating, particularly through the utilization of Wi-Fi 6 features such as Target Wake Time and extended sleep modes. This innovation allows battery-powered sensors, smart locks, and appliances to integrate with Wi-Fi networks more efficiently, broadening its application scope.
Enterprise Tech Upgrades: Businesses are rapidly upgrading their networks with Wi-Fi 6E and Wi-Fi 7, enhancing throughput, reducing latency, and improving reliability. These upgrades, coupled with refreshes in broadband and Fixed Wireless Access (FWA) gateways, further solidify Wi-Fi’s dominance.
Long-Distance, Broad Application Connectivity: The emergence of Wi-Fi HaLow (802.11ah), operating below 1 GHz, is gaining significant traction. It provides long-range, low-power links suitable for industrial and outdoor IoT applications, including video sensors, Advanced Metering Infrastructure (AMI) 2.0, and precision agriculture. This expands Wi-Fi’s addressable market and is expected to drive new shipment growth from 2026 onwards.
The Wi-Fi IoT market is projected to continue its growth, indicating its foundational importance across various IoT sectors.

2. Bluetooth IoT: Pervasive Personal Connectivity (24% of all IoT connections)

Bluetooth stands as the second-largest IoT connectivity type, particularly prominent in personal and short-range applications. The normalization of Bluetooth IoT chipset shipments in 2024 has set a solid base for its continued growth in 2025.

Bluetooth Low Energy (BLE): BLE continues to lead battery-powered IoT connectivity solutions. New System-on-Chips (SoCs) like Nordic’s nRF54, Silicon Labs’ BG27, and TI’s CC23xx families integrate compute, radio, and security features while significantly lowering cost and power consumption, enabling smaller, more efficient devices.
Industrial Adoption: IO-Link Wireless is driving industrial adoption by enabling reliable wireless communication between sensors, actuators, and controllers using the Bluetooth IEEE 802.15.1 standard, showcasing its utility in demanding environments.
Bluetooth 5.4: This version is becoming the preferred platform for large-scale electronic shelf labels (ESL), with national retail deployments underway in North America and Europe, highlighting its role in commercial applications.
Channel Sounding: Supporting secure fine ranging for applications such as access control, Real-Time Location Systems (RTLS), and automotive digital keys, Channel Sounding is expanding infrastructure demand across sectors like hospitals, factories, and warehouses.

3. Cellular IoT: The Backbone for Wide-Area Deployment (22% of global IoT connections)

Cellular IoT, encompassing 2G, 3G, 4G, and the rapidly growing 5G, remains critical for applications requiring wide-area coverage and robust data transmission. In 2024, global cellular IoT connections grew by an impressive 16% year-over-year, outperforming overall IoT growth and demonstrating its continued market share gain over the past decade.

Key Technology Shifts Driving Growth: The cellular IoT market is undergoing significant evolution driven by three clear technology shifts:
- 5G: Emerging as the standard for high-reliability and low-latency use cases. This includes Fixed Wireless Access (FWA), video telematics, industrial gateways, and automotive applications. Scaled private 5G networks in China are particularly proving its performance (IoT Analytics). The cellular IoT chipset market for 5G is projected to be the main contributor to growth, reaching 9.31 billion by 2030 (34% CAGR).
- LTE Cat-1: Continues to see steady global adoption as a cost-effective and widely available option for mid-tier IoT devices, especially in logistics, metering, and smart city deployments.
- LTE Cat-1 bis: Rapidly emerging as the main high-volume option, effectively replacing legacy 2G and 3G networks. It supports applications like point-of-sale systems, asset tracking, and light telematics.
- 5G RedCap (Reduced Capability): Positioned as a crucial transitional technology, 5G RedCap is designed to replace LTE Cat-4. It offers similar throughput but with reduced complexity and power consumption compared to full 5G, making it ideal for devices like smart cameras, wearables, and video-based telemetry that don’t require extreme bandwidth.
Cellular IoT Chipset Market: The market for cellular IoT chipsets reached 4.07 billion in 2024 (a 19% YoY increase) and is forecast to surge to 14.08 billion by 2030 (23% CAGR).
NB-IoT Momentum Fading: While NB-IoT and LTE-M (licensed LPWAN standards) experienced strong growth historically, NB-IoT is now facing increased competition from Cat-1 bis, particularly in metering applications. The market is maturing, and its future growth is uncertain, evidenced by AT&T’s shutdown of its NB-IoT data plans in November 2024.
Mobile IoT Operator Landscape: In 2024, mobile operators generated 18.4 billion in revenue from 4.1 billion cellular IoT connections. China Mobile, China Telecom, and China Unicom collectively managed a significant 74% of global cellular IoT connections, with China Mobile leading with 44%. In terms of revenue, China Mobile, Verizon, AT&T, China Unicom, and Vodafone accounted for 59% of the market. Each operator drives growth through specific strategies, such as China Mobile’s one-stop solutions, China Telecom’s city programs, China Unicom’s industrial-internet platforms, Vodafone’s automotive focus, and AT&T’s asset tracking and medical peripheral deployments.

The Growing Niche: LPWAN (Low-Power Wide-Area Networks)

While Wi-Fi, Bluetooth, and cellular dominate connection counts, LPWAN technologies like LoRa and LoRaWAN carve out a critical niche for ultra-low power, long-range, and low-data-rate applications.

The global LoRa and LoRaWAN IoT market size is projected to reach US$ 32.7 billion by 2029, demonstrating a robust CAGR of 32.4% during the forecast period.
These networks are vital for applications such as asset tracking, industrial IoT, smart cities (e.g., smart metering), smart healthcare, smart agriculture & livestock management, and disaster management initiatives, offering cost-effective and energy-efficient connectivity where traditional cellular might be overkill or Wi-Fi unavailable.

The diverse and evolving connectivity landscape of 2026 underscores the necessity for businesses to carefully select the right technology for each specific IoT use case, balancing factors like range, power consumption, data rates, security, and cost.

Where to Focus: High-Growth Vertical Markets & Applications in 2026

As the IoT market matures, certain vertical industries and applications are demonstrating accelerated growth and offer significant strategic focal points for businesses in 2026. These sectors are not only early adopters but are also deeply integrating AI to unlock new levels of value.

1. Smart Manufacturing: Industry’s Intelligent Transformation

Smart manufacturing, a cornerstone of Industry 4.0, is a leading application area for IoT. It held the largest market share in 2022 by application and is expected to continue its robust expansion. This growth aligns with the increased demand for industrial gateways that leverage cellular IoT and other connectivity solutions.

Operational Efficiency: IoT sensors monitor entire production lines, machinery health, and environmental conditions, feeding data into AI systems for real-time optimization.
Predictive Maintenance: AI-driven analysis of sensor data from equipment predicts potential failures, enabling proactive maintenance and minimizing costly downtime.
Quality Control: Automated inspection systems, powered by AI and connected via IoT, ensure consistent product quality.
Supply Chain Integration: Real-time visibility into the manufacturing process integrates seamlessly with connected logistics.

2. Smart Cities & Urban Infrastructure: Building Future-Ready Communities

The global movement towards smart cities is a massive catalyst for IoT adoption, with significant investments fueling its growth.

Smart cities have gained substantial traction, with urban populations continuing to rise globally.
Massive investments are being funneled into smart city initiatives; for instance, US city governments plan to invest approximately US$ 41 trillion over the next 20 years to upgrade infrastructure, leveraging connected devices. A Chinese consortium also announced a US$ 1.85 trillion investment in a new smart city in Brazil in December 2023.
IoT devices are increasingly central to these developments, enabling improved public services like smart metering, public safety, and video analytics, as demonstrated by platforms like China Telecom’s IoT Cognition Cloud.
Applications include smart lighting, intelligent traffic management, waste management, environmental monitoring, and connected public transport.

3. Connected Logistics & Supply Chain IoT: Optimizing the Movement of Goods

The global supply chain IoT market is undergoing rapid growth, significantly driven by the booming e-commerce industry and the critical need for efficient management.

Cellular IoT, particularly LTE Cat-1 and Cat-1 bis, plays a vital role in fleet management, asset tracking, and monitoring cargo conditions.
IoT solutions provide real-time visibility into inventory, transit conditions, and delivery statuses, optimizing routes, reducing spoilage, and enhancing overall supply chain resilience. This market is specifically tracked in reports, highlighting its strategic importance.

4. Automotive: Driving Connectivity and Autonomy

The automotive sector remains a key growth engine for cellular IoT.

5G Integration: 5G is becoming standard for high-reliability, low-latency applications within automotive, including advanced telematics and in-car connectivity.
Video Telematics: The demand for video-based monitoring and analysis in vehicles is growing, fueled by IoT connectivity.
Connected Vehicles: Major OEMs are integrating IoT for features like remote diagnostics, infotainment, over-the-air updates, and eventually, autonomous driving capabilities.

5. Healthcare IoT (H-IoT): Revolutionizing Patient Care and Operations

Healthcare IoT is presenting immense growth opportunities, driven by the increasing adoption of cloud-based and mobile healthcare technologies, the rise of medical tourism, and the expansion of healthcare infrastructure in emerging economies.

Remote Patient Monitoring: Wearable devices and home sensors track vital signs, glucose levels, and activity, enabling proactive health management and reducing hospital readmissions.
Telemedicine: IoT facilitates remote consultations by enabling the secure transmission of patient data.
Asset Management: Tracking medical equipment and supplies within hospitals improves efficiency and inventory management.
Clinical Trials & Research: IoT devices collect vast amounts of real-world data for more efficient and comprehensive clinical studies.

6. Agriculture IoT: Smart Farming for a Sustainable Future

The agriculture IoT market is projected for substantial growth, expanding from US$ 8.86 billion in 2025 to US$ 12.61 billion by 2030, with a CAGR of 7.3%.

Precision Agriculture: IoT sensors monitor soil conditions, crop health, and weather patterns, enabling optimized irrigation, fertilization, and pest control.
Livestock Management: Connected devices track animal health, location, and feeding patterns, improving welfare and productivity.
Automated Farming: Drones, autonomous tractors, and robotic systems, all IoT-enabled, automate various farming tasks.

7. Natural Disaster Detection IoT: Enhancing Resilience and Safety

An emerging but rapidly growing area, the natural disaster detection IoT market is projected to reach US$ 1.7 billion by 2027, with an impressive CAGR of 36.0%.

Sensors and connected systems detect early warning signs of floods, droughts, wildfires, and seismic activity, enabling timely alerts and improving response efforts.
This sector highlights IoT’s critical role in public safety and environmental protection.

These high-growth verticals and applications are where the fusion of IoT and AI is translating into tangible business outcomes, creating a fertile ground for innovation, investment, and strategic focus in 2026.

The AI-IoT Convergence: Strategic Imperatives for an Intelligent Future

The discussion around IoT in 2026 is incomplete without emphasizing the profound and increasingly inseparable bond between IoT and Artificial Intelligence. The “fusion of Artificial Intelligence (AI) with IoT” is not merely a trend; it’s the fundamental driver of market growth and innovation, recognized as a key element transforming the entire landscape.

From “Things” to “Intelligence”: The Core Transformation

Traditionally, IoT focused on data collection: connecting devices to gather information about the physical world. AI elevates this by transforming raw, often overwhelming, volumes of IoT data into actionable intelligence. AI algorithms analyze patterns, predict outcomes, and automate responses, enabling IoT systems to move beyond simple monitoring to become genuinely intelligent and proactive.

This convergence is what gives rise to truly smart environments:

Smart Factories where AI-driven analytics of IoT sensor data optimizes production lines, predicts machinery failures, and automates quality control.
Smart Cities that use AI to analyze real-time traffic flow, energy consumption, and public safety data from distributed IoT sensors to dynamically manage resources and services.
Connected Health solutions that use AI to interpret biometric data from wearables, predicting health risks and personalizing interventions.

Strategic Imperatives for Businesses in an AI-IoT World

To thrive in the era of AI-IoT convergence, businesses must adopt a strategic mindset that integrates both technologies from the ground up:

Develop a Holistic Data Strategy for AI:
- Data Quality & Governance: AI models are only as good as the data they train on. Businesses must prioritize the quality, cleanliness, and governance of IoT data to ensure accurate AI insights.
- Data Harmonization: With diverse IoT devices and platforms, harmonizing data formats and standards is crucial for feeding comprehensive datasets to AI.
- Ethical Data Use: Establish clear guidelines for data privacy, consent, and usage, especially with sensitive IoT data, to build trust and ensure compliance.
Embrace Edge AI for Real-time Intelligence:
- Reduce Latency: Process critical IoT data closer to the source (at the “edge” of the network) using AI-enabled edge devices. This enables real-time decision-making, essential for autonomous systems, industrial control, and safety-critical applications.
- Minimize Bandwidth: By processing and filtering data at the edge, less raw data needs to be sent to the cloud, saving bandwidth and cloud computing costs.
- Enhanced Security & Resilience: Edge AI can operate even with intermittent connectivity, and decentralized processing can reduce single points of failure.
Prioritize Cybersecurity in an AI-IoT Ecosystem:
- New Attack Vectors: The proliferation of IoT devices creates an expanded attack surface. AI can introduce new vulnerabilities if not properly secured.
- AI-Enhanced Threat Detection: AI algorithms can analyze vast amounts of network traffic and device behavior to identify anomalies and predict cyber threats far more effectively than traditional methods.
- Device-Level Security: Implement robust security measures (encryption, secure boot, regular updates) directly on IoT devices, leveraging AI for anomaly detection at the endpoint.
Foster Interoperability and Ecosystem Development:
- Open Standards: Work towards and adopt open standards to ensure seamless communication between diverse IoT devices, platforms, and AI models from different vendors.
- Platform-as-a-Service (PaaS): Embrace cloud-based IoT/AI platforms that offer comprehensive toolsets for device management, data ingestion, AI model deployment, and application development, simplifying integration.
- Strategic Partnerships: Collaborate with AI technology providers, connectivity specialists, and other IoT ecosystem players to create integrated solutions that offer end-to-end value.

The AI-IoT convergence is not a distant future; it is the present reality shaping 2026. Businesses that proactively embrace these strategic imperatives will be well-positioned to innovate, differentiate, and lead in this intelligent new era.

The Expanding IoT Ecosystem: Growth Trajectory Towards Billions