Internet of Things (IoT) Market Size, Share & Growth Forecast (2026-2031)

The Internet of Things Market is forecast to grow at a CAGR of 3.5%, reaching USD 1,364.0 billion in 2031 from USD 1,150.0 billion in 2026.

As organizations continue to grow device fleets and add sensors, gateways and connected devices, and as platforms and analytics software grow as a category, by component, devices/hardware lead the pack in terms of spending.

Cloud-native architectures are the norm for IoT workloads because they scale elastically, cost only for use, and integrate easily with data-lake and machine-learning applications, while on-premises and hybrid deployments continue to play a major role for applications where data-sovereignty, latency or regulatory requirements call for local processing. AI is now being integrated into connected devices and platforms straight into the edge, allowing for automated decision making, and reducing bandwidth and latency usage requirements of cloud-only architectures.

Regulatory reform and public investment are pushing the addressable use case base for the various verticals, with manufacturing and industrial applications having a significant share of deployed IoT infrastructure, including predictive maintenance and monitoring of connected equipment and digital-traceability programs.

Market Dynamics

Market Drivers

• New investments in 5G networks, increased deployment of low-power wide-area networks (LPWAN) and continued falling prices for sensors and connectivity modules are creating a larger market for connected assets in industrial, consumer and public sector applications.

• As enterprises increasingly turn to real-time analytics, predictive maintenance and autonomous decision-making, they are driving the growing adoption of IoT in factories, farms, logistics centers and smart city infrastructure as they aim to transform unplanned downtime into pre-scheduled maintenance and cut operational costs.

• Industrial digitalization programs helped by governments, smart-city programs, and regulatory change (such as new reimbursement for remote patient monitoring and vehicle-to-everything connectivity requirements) are driving long-term policy supported demand for connected-device deployment.

Market Restraints & Opportunities

• Interoperability challenges between the large number of competing IoT platforms, protocols and device ecosystems, combined with the cost and complexity of implementing and maintaining IoT infrastructure at scale, and growing cybersecurity risk associated with the expanding attack surface of connected devices, are significant constraints on faster adoption.

• The standardization of device-to-cloud interfaces, greater edge-AI capabilities and increasing managed IoT integration services to address a lack of skills on the enterprise side and reduce deployment times are creating significant opportunities for vendors who can simplify multi-vendor, multi-protocol IoT environments for enterprise customers.

Key Developments

• September 2026: Iridium Communications Inc., a leading provider of global voice, data, aircraft surveillance, and positioning, navigation, and timing (PNT) satellite services, and Furuno Electric Co., Ltd. announced Furuno will offer its new SOLION-100 terminal for Iridium GMDSS. This new Furuno maritime safety terminal is built on Iridium® Certus 100 technology and integrates GMDSS, Ship Security Alert System (SSAS) and Long-Range Identification and Tracking (LRIT) capabilities in a single platform.

• August 2026: Digi International® Inc., a leading global provider of business and mission-critical Internet of Things products, services and solutions, announced it has expanded and refinanced its senior secured revolving credit facility, increasing total borrowing capacity to $350 million.

Market Segmentation

The market is segmented by component, deployment mode, end-user vertical, and geography.

By Component: Devices & Hardware

The most dominant category is devices and hardware, which continue to be the basis for all IoT deployments, with enterprises increasingly expanding fleets of sensors, gateways and connected devices as the foundation of their IoT projects.

Cisco Systems, Inc. offers enterprise and industrial IoT connectivity infrastructure, industrial networking equipment and platform software.

Samsung Electronics Co., Ltd. provides consumer, industrial, automotive IoT connected devices and semiconductor components.

By Deployment: Cloud/SaaS

The adoption of a cloud-native architecture is the standard deployment model for IoT workloads, with its elastic scalability, pay-for-use pricing, and ability to integrate with data-lake and machine-learning services, which on-premises deployments are not easily able to replicate.

Azure IoT is a cloud platform that lets you use for managing devices, ingesting data, and enabling applications in enterprise IoT deployments.

AWS is committed to AWS IoT Core and other AWS cloud services that enable device connectivity and data processing and analytics at scale.

By End-User Vertical: Manufacturing

Manufacturing remains the leading end-user vertical for IoT deployment, reflecting sustained investment in predictive maintenance, connected-equipment monitoring, and digital-traceability initiatives across global production facilities.

Siemens AG integrates IoT connectivity, edge computing and digital-twin capabilities across its industrial automation and digital-factory portfolio.

Regional Analysis

North America Market Analysis

North America holds the leading regional position in the IoT market, supported by a dense concentration of platform vendors, cloud hyperscalers, and early enterprise adopters across manufacturing, healthcare and smart-city applications.

Europe Market Analysis

Europe's market is shaped by strong regulatory frameworks -- including the Cyber Resilience Act and Data Act -- alongside sustained industrial digitalization investment across Germany's manufacturing base and broader EU smart-infrastructure programs.

Asia-Pacific Market Analysis

Asia-Pacific is forecast to register the fastest regional growth, driven by large-scale manufacturing digitization in China, expanding 5G and private-network coverage in Japan and South Korea, and growing smart-city investment across the region.

Middle East and Africa Market Analysis

The Middle East and Africa are seeing accelerating IoT investment tied to national digitalization strategies and smart-city programs, particularly across the Gulf states.

South America Market Analysis

South America represents a growing market for IoT deployment, with agriculture, logistics and utilities operators in Brazil and other regional markets increasingly adopting connected-sensor networks for asset monitoring.

List of Companies

• Microsoft Corporation

• Amazon Web Services, Inc.

• Cisco Systems, Inc.

• IBM Corporation

• Siemens AG

• SAP SE

• Google LLC (Alphabet Inc.)

• Samsung Electronics Co., Ltd.

• PTC Inc.

• Qualcomm Incorporated

Competitive Landscape

Microsoft Corporation

Microsoft offers Azure IoT and related cloud services spanning device management, data ingestion and AI-enabled analytics, positioning the company as a leading platform vendor for enterprise IoT deployments.

Cisco Systems, Inc.

Cisco supplies IoT connectivity infrastructure, industrial networking equipment and cybersecurity solutions supporting manufacturing, utilities, transportation and enterprise IoT deployments globally.

Siemens AG

Siemens integrates IoT connectivity, edge computing and digital-twin capabilities across its industrial automation and digital-factory portfolio, serving manufacturing and industrial customers worldwide.

Analyst View

The Internet of Things market is transitioning from isolated connected-device pilots toward enterprise-wide digital transformation programs, as falling sensor costs, expanding 5G and LPWAN coverage, and maturing edge-AI capability widen the addressable base of use cases across manufacturing, healthcare, smart cities and connected transportation. Platform and analytics software is emerging as the market's most strategically significant growth vector, as enterprises increasingly prioritize unifying device management and extracting operational value from growing volumes of connected-device data over simply expanding device counts. North America currently leads in platform maturity and enterprise adoption, while Asia-Pacific's manufacturing digitization and expanding 5G infrastructure are positioning the region as a significant future growth engine. Vendors that combine interoperable, standards-aligned connectivity with strong cybersecurity credentials and edge-AI capability are best positioned to capture the next phase of market growth as regulatory frameworks such as the EU Cyber Resilience Act raise the bar for compliant, secure-by-design IoT deployment.

Internet of Things (IoT) Market Scope: