Internet of Things forecast

Growth of the Internet of Things and in the number of connected devices is driven by emerging applications and business models, and supported by standardization and falling device costs

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Key highlights

  • 70% of wide-area IoT devices will use cellular technology in 2022
  • In 2018, mobile phones are expected to be surpassed in numbers by IoT devices
  • There will be around 400 million IoT devices with cellular connections at the end of 2016

Around 29 billion connected devices1 are forecast by 2022, of which around 18 billion will be related to IoT.

In 2018, mobile phones are expected to be surpassed in numbers by IoT devices, which include connected cars, machines, meters, wearables and other consumer electronics. Between 2016 and 2022, IoT devices are expected to increase at a CAGR of 21 percent, driven by new use cases.

IoT device connections

In the figure below illustrating all connected devices, IoT is divided into short-range and wide-area segments.

The short-range segment consists of devices connected by unlicensed radio with a typical range of up to around 100 meters, such as Wi-Fi, Bluetooth and ZigBee. This category also includes devices connected over fixed line local area connections.

The wide-area category consists of devices using cellular connections (3GPP-based with some CDMA), as well as unlicensed low-power technologies, such as Sigfox, LoRa and Ingenu.

Connected devices

1.5 billion IoT devices with cellular connections by 2022

There will be around 400 million IoT devices with cellular connections at the end of 2016 and that number is projected to reach 1.5 billion in 2022, or around 70 percent of the wide-area category. This growth is due to increased industry focus and 3GPP standardization of cellular IoT technologies. Cellular IoT connections benefit from enhancements in provisioning, device management, service enablement and security.

Within the wide-area IoT segment, two distinct sub-segments with different requirements have emerged: massive and critical applications.

Massive IoT connections are characterized by high connection volumes and small data traffic volumes, low cost devices and low energy consumption. Many things will be connected through capillary networks.2

At the other end of the scale, critical IoT connections place very different demands on the network: ultra-reliability, availability, low latency and high data throughput.

There are, however, many use cases between these two extremes, which today rely on 2G, 3G or 4G connectivity.

Today, LTE’s share of cellular IoT devices is around 5 percent. Declining modem costs, evolving LTE functionality and 5G capabilities are all expected to extend the range of applications for critical IoT deployments. 

1 In our forecast a connected device is a physical object that has an IP stack, enabling two-way communication over a network interface. Traditional landline phones are included for legacy reasons

2 Connected devices connecting to a wide-area network through a common gateway

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