9 Trends in IoT Development for 2026 [Updated]

Two decades ago, the Internet of Things seemed to be a futuristic concept of smart gadgets that communicate with one another.  The world today has around 17 billion interconnected devices and a $714 billion IoT market size. 

The concept has become a reality. 

We at SumatoSoft embrace modern technologies by assisting businesses in their adoption through our services. IoT development services take a prominent place among other services. The KPMG global tech report states that IoT is the second most promising emerging technology for business investment. 

We continually monitor the IoT landscape and analyze market trends, updating this article annually. 2025 brought many significant changes that I want to explore in this article. 

Let’s start. 

IoT Drivers in 2026

Any technology doesn’t exist in a vacuum. Some drivers always define whether the technology advances within a nurturing environment or struggles to obtain the financing necessary for a significant leap in development. 

Fortunately, the Internet of Things has advanced since the beginning of this century, and there are several reasons for that: 

2010 – Present: Growing Demand for IoT in the Healthcare Domain

In the early 2010s, the concept of the Internet of Medical Things (IoMT) started gaining attention. The world saw the first fitness tracker, Fitbit, which was a first-of-its-kind personal healthcare device. 

Since then, the healthcare industry has required just more from IoT: advanced remote patient monitoring systems, smart pills, connected inhalers, real-time health data collection, telehealth services, and more. By 2021, the remote patient monitoring market alone grew to $39 billion. 

2010 – Present: Significant Investments in Smart Cities

The IoT market saw even more investments in the 2010s, when the concept of Smart Cities gained government and public attention: 

• The U.S. government supported smart city development through programs like the American Recovery and Reinvestment Act (ARRA) and new initiatives like the Smart City Challenge from the Department of Transportation. 
• Collaboration between the public and private companies began, when tech giants like IBM, Cisco, Microsoft, and others partnered with cities to deploy smart technologies. This attracted significant investments: Cisco investments in IoT reached $300 million in 2019, Intel – $100 million over five years, and Google bought Nest Labs for $3.2 billion. 
• The European Union launched the Horizon 2020 program with a $80 billion budget to fund numerous smart city projects, such as Barcelona, Amsterdam, and Copenhagen. 

2013 – Present: Convergence of AI and IoT (AIoT)

One of the most influential driving forces for IoT in 2024-2025 is the convergence of AI and IoT called AIoT.  According to a 2025 report by Mordor Intelligence, the “AI In IoT” market is estimated at USD 60.71 billion in 2025. Key implementation areas for AIoT are: edge AI, predictive maintenance, smart city applications, real-time production optimization, and asset tracking.

However, it’s necessary to admit that the convergence of AI and IoT started long before ChatGPT introduced its market disruption in 2022. Tesla has been developing its autopilot since 2013, Google introduced its self-driving car Waymo in 2018, Microsoft invested $5 billion in IoT and intelligent edge technologies over 5 years from 2018. Back in 2015, enterprise-level IoT systems like GE Predix or Siemens MindSphere that offered AI opportunities successfully entered the market.

Interest and investments in the AI and IoT duet just ramped up even more in 2022. This fruitful cooperation will be a lasting one. 

2015 – Present: Sustainability and Energy Efficiency Topics

September 24, 2015, New York City, US

The United Nations adopted the 2030 Agenda for Sustainable Development, including 17 Sustainable Development Goals (SDGs). 

December 12, 2015, Paris, France. 

196 countries adopted the Paris Agreement, committing to limit global warming below 2 degrees Celsius above pre-industrial levels. 

These two events shifted the focus of developed countries toward energy efficiency and renewable energy as key components of sustainability. 

As of 2022, worldwide investments in sustainability amounted to $30.3 trillion. The lion’s share of these investments was in IoT technologies like smart grids, smart irrigation systems, and precise farming technologies. 

It was all only strengthened in 2024-2025 with carbon-reduction and energy efficiency targets. In July 2025, the research about exploring the application of intelligent energy saving systems identified that IoT-enabled smart grids and buildings optimize electricity use in real time, cutting energy consumption by up to 35% while maintaining comfort.

2019 – Present: Advancements in 5G Technology

Low data transfer speed and high latency challenges limited the implementation of IoT. It changed in 2019 with the launch of the first commercial 5G services that overcame these challenges. 

Since then, 5G technology has rapidly conquered the IoT landscape when healthcare, autonomous vehicles, manufacturing, and entertainment companies started to adopt it. By 2023, 5G networks had been deployed in over 60 countries, with significant investments from both private and public sectors to expand coverage and develop 5G-enabled devices and applications. In 2024, the automotive and transportation sector was a major adopter – an estimated 26% of all 5G IoT connections worldwide were in transportation, logistics, and related uses (e.g. vehicle telematics, fleet tracking, and real-time navigation)sam-solutions.com. Overall, cellular IoT connections are seeing a huge boost from 5G: Ericsson projects estimates near 7 billion cellular IoT connections in 2025, riding on the back of 5G growth. By 2024–2025, this ultra-fast, low-latency connectivity is reaching critical mass with extremely high adoption rates.

2020 – 2023: COVID-19 Pandemic

The COVID-19 pandemic posed an acute challenge to the world: the need to operate remotely. 

Healthcare providers were required to reduce hospital visits – so they referred to telemedicine. Industries were expected to maintain production despite travel restrictions and social distancing – so they referred to remote machinery monitoring and predictive maintenance. The retail sector must minimize human contact, so they invested in contactless delivery systems and contactless payments. 

2010 – Present: Continued Industry Digitization and Smart Infrastructure

 IoT has become an infrastructural force reshaping industries and cities.

The digitalization surge keeps IoT momentum high: factories, municipalities, and entire sectors now regard connected systems as a structural instrument for efficiency and modernization. Industry 4.0 and broader Smart-X initiatives have shifted from pilot mode to steady operation. Networked machinery curtails idle time by roughly 30% and lifts throughput by about 25%. P&G reports 20–30% cost compression and a 25% rise in equipment availability; Schneider Electric trimmed energy use by 10%.

At the same time, cities are developing sensor networks for transportation, security, and the environment, and governments are supporting digital infrastructure through large funds. The number of private IoT networks, from 5G to LPWAN, is growing, providing companies with stability and control. Ultimately, IoT is becoming the core technology for digital transformation, and the market is expected to grow in 2024-2025 due to pent-up, sustainable demand.

9 Ongoing and Emerging Trends In the IoT Market

Trend 1: Companies Around the World Build Intelligent IoT Systems 

With ChatGPT released, its convergence with the Internet of Things is a hot topic across all industries. The research in October 2025 revealed that 84% of enterprises identify AI as a fundamental enabler for their IoT projects.
According to Statista, IoT generated 80 zettabytes of data in 2025, equivalent to 3.1 billion years of continuous HD video playback. AI, in turn, is expected to process and use this data.

Nowadays, businesses are discovering new ways to combine IoT and AI capabilities. I can’t say that serious progress has been achieved because old-school predictive maintenance is responsible for about two-thirds of all IoT use cases. 

Still, new combinations of AI and IoT are coming. 

Examples:

• The IEEE 10th World Forum on IoT in Canada focused on the theme “Unleashing the power of IoT with AI.” It showcased existing integrations and explored new combinations of technologies.

• Qualcomm’s RB3 Gen 2 development kit – the first widely available edge-AI/IoT dev-kit. In 2025, it continued to push edge AI adoption: real-time object detection, edge inference for robotics, autonomous devices, smart vision, industrial automation etc.

• ABB (2025) – its industrial IoT offering, ABB Genix Industrial IoT and AI Suite, was named a Leader in the 2025 Gartner Magic Quadrant for Global Industrial IoT Platforms.

Trend 2: Research of Digital Twin Opportunities Continues

Digital twins are the next promising step in predictive maintenance for any high-cost physical item. While still limited mainly by virtual models of spaceships, aircraft, and smart cities, the concept of digital twins looks appealing to businesses and huge corporations with more implementations in smart manufacturing coming in. 

The next prominent adapter here is the supply chain management industry. It was expected that digital twins would become widespread in 2025 supply chain management. Even though this expectation hasn’t become a reality, the supply chain is actively adopting this technology.

Examples:

• McKinsey research shows that 70% of C-suite technology executives at large enterprises are already exploring and investing in digital twins. Still, it’s more likely about exploring rather than investing, but the interest in this concept keeps growing, especially thanks to the success of the preventive maintenance opportunities. 
• AWS and Bosch Digital Twin Industries are two companies that continue to explore further advancement and implementations for the digital twins. 

Trend 3: Growing Demand for Data Processing Units 

This trend concerns graphical processing units (GPUs). The global market for GPUs was valued at approximately $65.3 billion in 2024 and is expected to grow to $274.2 billion by 2029​.

From our perspective, these estimations are quite moderate. The demand for GPUs had already demonstrated significant growth before 2022, determined by two factors: implementations of edge computing in manufacturing, smart cities, automotive, and other industries, and the prosperity of the gaming and streaming industry. 

2022 brings a new drive for GPU demand: a generative AI. 

Deloitte discovered that generative AI and edge analytics have pushed chip sales to record highs in 2025.

To visualize the difference, we can imagine the computing capacities used in gaming, streaming, and edge computing as garden hoses and required computing for these tasks as a swimming pool. The more hoses we take, the faster we can fill up an entire swimming pool. 

Well, training complex AI models for generative AI is like trying to fill up a giant lake with the help of garden hoses. It requires specialized, high-performance processing units to do so.

Examples: 

• NVIDIA reported a record $27 billion in revenue in 2022 with another record in 2023 as well. Before ChatGPT’s introduction in 2022, the revenue number was much lower, at $16 billion in 2021. Such astonishing growth for an established company is driven by one simple reason: NVIDIA’s H100 GPUs are crucial in AI model training. In 2025, the revenue grew to $130.5 billion.
• Intel entered the market in 2024 with its Arc series of GPUs and an aggressive price strategy. The cost of their action is quite depressing for the company, with the stock price dropping 43% in August 2024 due to ongoing concerns about its ability to compete in the AI GPU market. Nevertheless, the GPU market has 3 major players now: NVIDIA, AMD, and Intel. 

Trend 4: The Deep Integration of Edge Computing With AI Is Coming 

Cloud computing, when all data are sent to the cloud, has always been a standard method of storing and processing extensive data from IoT devices.

It has changed to meet the needs of the newest IoT implementations, such as autonomous vehicles, smart factories, energy management, smart cities, etc. These areas require high response speed, opportunity to operate offline, and real-time decision-making from the systems. AI-powered edge computing allows to meet these requirements.

Major companies are actively investing in edge AI technology: AI chipsets are becoming smaller in size while growing in power, edge gateways come with embedded AI chipsets in them, new AI-ready IoT platforms are appearing. 

We expect both the hardware market with edge servers, advanced processors, connectivity modules and the software market with edge AI capabilities to keep growing due to the increasing adoption of edge computing. 

Examples: 

• In 2025, Qualcomm acquired the edge-AI platform provider Edge Impulse, aiming to “unify edge-AI model development, optimization and deployment within its IoT and embedded ecosystem.”
• Aetina Corporation launched a new edge-AI hardware in 2025. They introduced an industrial MXM module that targets robotics, manufacturing, medical AI, and other edge-AI use cases. 
• Academics, together with industrial researchers, examine the feasibility and effectiveness of edge-AI. One example is a 2025 experiment that ran object-detection models (YOLO variants) on edge hardware to achieve real-time inference (e.g. 52–65 frames per second). It was successful.

Trend 5: Predictive Maintenance Is On the Rise

The fact that this is “on the rise” is visible in the money. A study from a major market player, Mordor Intelligence, values the global predictive-maintenance market at USD 14.09 billion in 2025, forecasting it to reach USD 63.64 billion by 2030 at about a 35% CAGR.

On the operations side, a 2025 industry analysis notes that industrial manufacturing already accounts for ~23% of predictive-maintenance revenue, while energy and utilities are the fastest-growing vertical (≈35% CAGR). Plants report maintenance-cost reductions of 10–40% and unplanned downtime cuts of 70–90% after PdM roll-outs.

A cross-industry review using Azure case studies highlights that over 75% of manufacturers now prioritize predictive maintenance because unplanned downtime in large plants averages USD 129 million per year.

Examples:

• Husky Technologies (global plastics equipment supplier) built an Azure-based predictive monitoring system, Advantage+Elite, which collects real-time machine data via Azure IoT Hub and analytics services. Each predictive “we call you” intervention saves customers about USD 4,000–6,000 across six global centers.

• Komatsu Australia streams data from 30,000+ machines into Azure and uses IoT + ML for predictive maintenance recommendations. Moving to this PdM-centric, data-driven model: Cut IT/analytics costs by ≈49% and improved performance by 25–30%.

Trend 6: The Race For the Pocket AI Has Begun 

This is a composite trend derived from several factors: advancements in semiconductor technology, miniaturization of high-performance processors, and improvements in energy efficiency. 

The result is small, pocket-sized smart gadgets with integrated AI opportunities. These devices are designed to offer real-time AI processing power in daily life. Consumer demand for portable AI solutions is still in its infancy, but the growing interest in such devices will create a vast consumer market in the coming years. 

Companies like Apple, Google, Samsung, and smaller innovators are vying to lead in the space by introducing AI capabilities in existing devices and developing new ones.

Still, there is a lot to be done. The ongoing issues include high battery drain, slow response times, poor performance, missing features, proneness to overheating, inaccuracy and hallucination. Although the coming usable pocket AI devices will likely be smartphones, within this trend, we are speaking about distinct AI devices that specialize in AI capabilities rather than having it as an additional nice option. 

Examples: 

• The market has expanded significantly since the introduction of the Rabbit R1 at CES 2024. It’s a new AI-powered device that operates with a custom OS, enabling it to execute complex tasks such as booking travel, ordering food, routing, and more. It was first of its class, but now the market is much broader.  

• In December 2025, Meta acquired the Limitless Pendant, a small clip-on/necklace device that constantly records what you hear. Meta plans to integrate its tech into future consumer hardware. 

• Pocket is a credit-card-sized AI voice recorder that magnetically sticks to the back of a phone or slips into a pocket. It captures meetings and conversations, then uses on-device/companion-app AI for real-time transcription and other staff. 

• Friend is a small, AirTag-sized pendant that you wear around your neck. It’s an always-listening AI chatbot powered by Claude 3.5; it comments on what’s happening around you, sends you messages, reacts to your conversations, and is explicitly framed as an emotional companion rather than a productivity tool.

• Announced at Meta Connect 2025, Meta Ray-Ban Display is Meta’s first pair of AI glasses with an integrated full-color display in the right lens, plus the “Meta Neural Band” wristband that uses EMG signals from your wrist to control the UI through tiny hand gestures.

Trend 7: Rising Privacy Concerns Regarding the Duet of AI and IoT

AI and IoT together are capable of creating smarter, more autonomous systems that can greatly enhance and simplify our daily lives. The question here is how to prevent the misuse of personal information that IoT devices need to operate. 

In the 2010s, several new fundamental documents were introduced to protect individual’s personal data and privacy: GDPR in the European Economic Area, CCPA and the New York SHIELD Act in the U.S. In the 2020s, privacy regulations are evolving with the wide adoption of AI among different IoT networks. From the Biden-Harris administration’s Executive Order 14110 to the political agreement reached on the EU’s AI Act, governments around the world are taking steps to regulate AI technologies.

For us as software developers, this means that we must keep abreast of evolving privacy and security measures to develop AI-powered IoT systems that comply with local laws and regulations. 

We also observe an increasing consumer awareness and concern about privacy. Organizations like IAPP, KPMG, the University of Queensland, Pew Research Center have already conducted several studies with quite similar findings: depending on the study, 56% to 81% of respondents globally agree that AI poses a significant threat to their privacy. Consumers think the information collected by AI companies will be used in ways people are uncomfortable with as well as in ways that were not originally intended. 

I see the company’s ability to cope with this privacy concern as a significant competitive advantage. 

Examples:

• At the 2024 Worldwide Developers Conference, Apple announced plans to integrate its own proprietary AI, “Apple Intelligence,” into its devices. In late 2025, Apple paused the rollout of Apple Intelligence in the EU, partly due to regulatory concerns under the Digital Markets Act around how tightly the AI assistant is integrated with the device and its data.
• In November 2025, Google announced “Private AI Compute”, a cloud platform meant to run advanced AI features for future Pixel 10 devices in a way that keeps user data “inaccessible even to Google”.
• Earlier in 2025, WhatsApp announced that its upcoming generative-AI tools (summaries, writing help, etc.) would be powered by Meta’s Llama models but run through a system called “Private Processing”.
• An investigation by ABC News (Australia) in October 2024 found that Ecovacs Deebot robot vacuums collect photos and audio from inside homes and send them back to the company, where they are used to train AI models.
• As of 12 September 2025, the EU Data Act is fully applicable. The European Commission explicitly frames it as giving users control over data generated by their connected devices (smartwatches, smart home appliances, connected vehicles, industrial machines, etc.).

Trend 8: Ongoing Security Issue 

This is a never-ending issue that I have been discussing since 2012 when we at SumatoSoft started to provide IoT development services. The latest worth-reading research on this topic is the whitepaper “The high cost of doing nothing” from the Asimily company that specializes in securing IoT devices. 

Issues that existed 10 years ago are still relevant today: unreliable default passwords are still the main reason for IoT security breaches, devices feature outdated software and hardware, and companies ignore practices like regular security patching, network segmentation, and real-time monitoring. All that leads to billions of dollars in loss, disrupted operations, and lost reputations. 

The absence of standardization in IoT device security complicates things further. We have definitely seen an improvement in this area with the introduction of standards and frameworks like the NIST cybersecurity framework, ETSI EN 303 645, OWASP IoT TopTen, Cybersecurity law, etc. Still, this is an ongoing issue that will continue to be present in IoT trends in the coming years. 

Examples:

• Asimily’s 2025 breach roundup describes BadBox 2.0, a botnet uncovered in July 2025 that infected over 10 million IoT devices – smart TVs, projectors, in-car infotainment systems, even digital picture frames.
• Raptor Train botnet (Sept 2024), AVTECH IP camera campaign (Aug 2024), “admin123” opens tens of thousands of CCTV feeds in India (2025), 120,000 hacked home cameras sold as porn in South Korea (2025) – these are just the most famous DDoS attacks.
• The coding capabilities of generative AI pose an additional challenge to securing IoT devices since tools like GitHub Copilot may inadvertently suggest code that contains security vulnerabilities.

Trend 9: Interoperability Standards & Open IoT

For years, IoT was a mess of incompatible protocols and vendor silos: every smart bulb, gateway or PLC spoke its own language. That fragmentation made multi-vendor systems expensive to integrate and almost impossible to maintain at scale. 

The current trend is the opposite: open, shared standards that let devices and platforms talk to each other in a consistent way, regardless of brand or underlying radio. Organizations like the Connectivity Standards Alliance (CSA), OPC Foundation, and oneM2M / ETSI are explicitly focused on universal, secure interoperability so products can “connect and interact” more easily and safely.

Examples:

• In the smart home, this is embodied by Matter: an open, IP-based standard, developed under CSA and backed by Apple, Google, Amazon, Samsung and others. In January 2025, Apple, Google, and Samsung announced they will accept Matter certification from CSA directly for their “Works with Apple Home,” “Works with Google Home,” and “Works with SmartThings” badges.

• In the industrial and telecom world, standards like OPC UA and oneM2M play a similar role. OPC UA is described in 2024 industry guidance as an open, platform-independent IEC standard (IEC 62541) for data exchange in automation – the “latest generation” of OPC designed specifically for interoperability in Industrie 4.0 and IIoT.

SumatoSoft’s Role in IoT Trends 

SumatoSoft has been delivering IoT software development services since 2012, delivering custom enterprise software and developing MVPs for startups to gain a competitive advantage and improve their efficiency, effectiveness, and profit through business digitalization.

SumatoSoft offers industry-focused IoT solutions in multiple domains. They include: 

• the Internet of Things in logistics;
• IoT solutions for smart cities;
• the Internet of Things in climate change;
• IoT development for fleet management; 
• healthcare IoT development;
• banking IoT development; 
• retail; 
• manufacturing; 
• automotive.  

The SumatoSoft team has built 250 custom software solutions for 27 countries for 11 industries. After more than 13 years on the market, the company became a reliable technical partner to its Clients, demonstrating a 98% Client satisfaction rate with the quality of services we provide. Contact us to get a free quote for your project.