Future of IoT offers mixed opportunities, shortages

IoT hardly counts as an emerging technology these days, as it is more than a decade old.

But the technology continues to evolve. Adjacent, arguably more emerging technologies are influencing the future of IoT. Prominent examples include 5G and the emerging metaverse. IoT will move into new use cases, applications and adoption scenarios as it converges with other streams of innovation.

The long-term trends are indeed promising. However, the technology’s near-term prospects are held back by shortages of electronic components, putting a damper on growth projections. Flexibility will be the watchword for IoT technology vendors, system integrators and customers dealing with a changing market.

Here are four trends to monitor in IoT.

1. IoT meets the metaverse

IoT promises to play a pivotal role in the metaverse, connecting the physical world to the virtual variety. Digital twins – that is, virtual representations of physical devices – rely on IoT data and can be particularly relevant. It looks like a variety of IoT-driven digital twins will populate the metaverse.

Paul Daugherty, group chief technology officer and CTO at Accenture, cited IoT, along with developments such as synthetic data and quantum computing, as technologies that will impact the metaverse—and reshape business in the process.

“The real world, itself, is becoming programmable,” Daugherty said at Accenture’s annual Technology Vision event. “It’s about IoT. It’s about operational technology. It’s about digital twins.”

In the bigger picture, IoT and other technologies are evolving into Web 3.0, according to Daugherty. The original World Wide Web was an Internet of data and search, he argued. In 2000, the web transitioned to social networks and the internet of people. The next shift — the mobile Internet and Web 2.0 — included 3G, 4G and IoT, he noted.

Now, Daugherty said, the industry is moving toward Web 3.0 and two fundamental capabilities: the Internet of Place and the Internet of Ownership. The former provides interoperable online venues for shared, collaborative experiences, while the latter uses blockchain and distributed ledgers to create secure digital identities, he added.

IoT is poised to serve as a building block within that ongoing development.

2. High growth for cellular IoT

Cellular IoT technology, which harnesses mobile networks for device connectivity, will follow a major growth path over the next few years. Market research firm Juniper Research has pegged the global market as nearly doubling in four years, expanding from $31 billion in 2022 to $61 billion in 2026.

As the number of IoT connections grows, we do expect the value of 5G to increase and adoption to rise.

Juniper Research has identified cellular low-power wide area (LPWA) offerings and 5G as the key technologies driving this growth. The LPWA category, including narrowband IoT and LTE for machines, will experience the fastest growth during the forecast period. The market researcher said he expects the low cost of connectivity and hardware to boost the technology’s adoption for remote monitoring in verticals such as agriculture, smart cities and manufacturing.

5G trails LPWA in terms of growth, but its day is coming.

“5G is still not as cost-effective as technologies like 4G, so 5G will be adopted on a case-by-case basis,” said Sam Barker, head of analysis and forecasting at Juniper Research. “As the number of IoT connections grows, we do expect the value of 5G to increase and adoption to rise. Next year [2023] will experience growth. However, we expect this growth rate to accelerate over the next few years.”

3. Chip shortages continue to complicate IoT

The technology’s outlook is not entirely rosy – notwithstanding the growing metaverse and cellular IoT applications.

Forrester Research predicted that the ongoing chip shortage will hamper IoT market growth by 10% to 15% in 2022. While high-end chipsets from Intel and Nvidia remain available, those powering IoT devices are not always available. The lack of supply affects IoT-enabled connected devices, from appliances to industrial products.

IoT-based smart devices often use lower-end chipset configurations — for example, 4-bit or 8-bit microcontrollers — that are cheaper and have lower processing requirements, noted Glenn O’Donnell, vice president and director of research at Forrester.

“Demand for these lower-end chipsets to power IoT-enabled smart devices will continue to outpace supply through 2022,” O’Donnell noted.

Market research company IoT Analytics pointed to IoT growth headwinds, including chip shortages, which the company says are expected to continue into 2024 and possibly beyond. That said, the company still predicted that the global enterprise IoT market will expand at a compound annual growth rate of 22% through 2027. IoT Analytics expects the market to reach $525 billion that year.

4. IoT botnet to hit infrastructure

Security continues to be a long-standing concern with IoT, given the ample attack surface offered by numerous connected sensors and devices.

Further threats are in the offing. Forrester predicted that in 2022, an IoT botnet will successfully take down some critical communications infrastructure through a DDoS attack. That attack would exceed 30 million requests per second, Forrester said, cutting off availability and causing economic pain.

“Even if we leave [out] the cyber components of the current Russia-Ukraine conflict – where DDoS is certainly ongoing – the likelihood of an IoT botnet hitting the private sector elsewhere in the world is still very high,” said Merritt Maxim, vice president and director of research at said Forrester.