2025 in Review: From Calamity, to Promise and Peril

The year began in beaten down mode with industry analysts reporting on shrinking IoT businesses and ‘calamitous’ exits. In the first case, Germany’s Software AG was the culprit for divesting its Cumolocity industrial IoT interests. A few days later, U-blox announced that it could not find a buyer for its cellular IoT business and would therefore shut down the entity. Citing several other corporate exits, LightReading positioned this as the latest IoT calamity to hit the industry.  

Matters did improve over the course of the year, aided by Vodafone’s ambitions to ‘hyperscale’ IoT and examples of making IoT more accessible via generative AI tools. While there are upsides to these developments, they raise concerns about IoT vulnerabilities. As we will see though other industry developments over 2025, there is always a flip side to the success that comes from economy-wide adoption of IoT.

IoT solution providers lead the way

In 2007, I began monitoring corporate initiatives in the IoT industry. In those days, mobile network operators (MNOs) were the predominant actors as the industry sought new markets for growth. The roughly fifty initiatives occurring in 2025 highlight the importance of solution providers. This is a sign of the importance of delivering value by solving everyday business challenges. Solution providers encompass a wide range of organizations, including entities such as AWS IoT, Siemens and Microsoft, and PTC. 

‘Solutions’ map to the upper layers of the IoT stack. Below these are the industry layers that deal with ‘connectivity’ and ‘connected devices.’ Connectivity shows up in the form of MNO, MVNO (virtual), LPNO (low power), and satellite connectivity providers. A continuing development in 2025 is the rapprochement between cellular and satellite industries. This was best expressed by a policy executive who remarked that it was now not uncommon to come across satellite industry representatives in meetings at the GSMA’s offices. 

Underpinning solutions, the coverage aspect of connectivity continues to matter for the industry. A few examples are: Vodafone’s partnership with Mobily to expand the former’s Saudi Arabian footprint; SingTel addressing global IoT deployments by allying with FloLive; and, Verizon adding SingTel and Skylo partnerships for global IoT. 

Working Across the IoT Industry Chain 

Connectivity partnerships – one MNO partnering with another MNO from a different geographic region - are a form of in-segment or horizontal industry initiative. However, effective IoT spans the industry chain because several elements are essential for a complete solution. One way to visualize this is by studying cross-industry connections. For 2025, these amounted to over 60% of the initiatives. Solution Providers, for example, are a good example of cross-segment reach. In addition to standalone solution provider initiatives (4), organizations in this segment partnered with other solution providers (4), MNOs (5), vendors (4), and investors (4). 

Vendors Unlock New Industry Segments 

The third-ranking group in the industry map is vendors. Many of their initiatives focused on connected devices and capability enhancements. Examples include G+D launching a credit card sized IoT tracker for shipping applications and Sequans using the acquisition route to boost its RedCap activities. 

Across the industry, the topic of Edge IoT continues to capture attention. Qualcomm was most consistent in illustrating how this dynamic is playing out. Its corporate initiatives included the acquisition of Edge Impulse with an emphasis on AI and IoT capabilities. Qualcomm then established an AI and IoT engineering center in Abu Dhabi before acquiring Arduino to improve developers’ access to edge computing and AI. 

Governments’ Growing Role in IoT 

With IoT becoming more central to the economy, government will have an increasingly important influence on the market. Three developments illustrate trends for the future. Firstly, European regulators approved a unified framework for non-cellular satellite IoT, overcoming years of patchwork regulation. Middle East regulators are likely to follow. 

In India, there are plans to develop an IoT-ready UPI (universal payments infrastructure) system to automate payment transactions through smart devices and not just phones. This would enable UPI payments through smart devices like TVs, fridges, washing machines, cars, and smart watches, among others. 

Finally, the USA will require U.S. Cyber Trust Mark labeling on all federally procured connected devices after January 4, 2027. The requirement that connected devices meet baseline cybersecurity standards (secure software updates, data protection measures, and vulnerability reporting mechanisms) will have spillover effects into the wider IoT market. 

Promise and Peril 

Towards the year end, Vodafone and 1NCE initiatives drew attention to much greater promise for the IoT came. In the case of Vodafone, its Americas Managing Director, Dennis Nikles, described plans to act on Vodafone’s hyperscaler ambition for IoT. This will involve a shift from scale to hyperscale (a topic I have covered in the past), partnering (in place of competing), and simplification (to cut complexity and costs) as a strategy. 

The second development, addressing the importance of moving beyond ‘connectivity’ as a value proposition came from 1NCE’s launch of its ‘Fixers’ line of business. This aims to expand beyond software and connectivity by leveraging implementation experience from over 27,000 customers. ‘Fixers’ will provide advisory services on building better IoT solutions, driving efficient usage of existing intelligent products, and debugging technical faults. 

With IoT devices and systems becoming more prevalent, value creation opportunities multiply as does the prospect for peril. Two stories illustrate grounds for concern. The first involves French authorities arresting two crew members of a passenger ferry. They are suspected of infecting the ship with malware with the possibility of remotely controlling the vessel. 

In the second story, Andrej Karpathy, a cofounder of OpenAI, experimented to see if Claude Code could get into his home automation system. His prompt led Claude Code to find his Lutron controllers on the local Wi-Fi network (check for open ports, connect, get metadata, and identify devices and their firmware). There followed an Internet search for the PDF for his system and then instructions on what button to press to pair and get necessary certificates. It then connected to the system and found all his home devices (lights, shades, HVAC temperature control, motion sensors etc.). The routine then ran checks by turning his kitchen lights on and off. 

Prospects for 2026 

Industry developments over the course of 2025 point to an evolution in industry mindset, with larger organizations addressing new market and business growth opportunities. These go beyond connections and connectivity as IoT meshes with complementary technologies such as AI, digital twins, data with meaning, and payments. As combinations of these technologies work their way into industry and public infrastructure, there remain questions about how the IoT industry will deal with adversity arising from malicious actors to accidental engineers over-relying on generative AI. There must be sources of opportunity for value added propositions targeting users and infrastructure via data protection, security, and trustworthiness propositions.

 

2024 in Review: Wider Factors are Enveloping the IoT Industry

An important lesson from 2024’s IoT corporate initiatives is about an industry that is evolving to a post-connectivity world. This is due to the dynamics of market-demand, one of which is to treat IoT connectivity as a component in a system-level application. An example would be the case of connectivity being a part of an electric vehicle, IoT system. The introduction of regulatory protections represents another market driver. Here, examples are evident in consumer education and consumer protection initiatives.

The impending arrival of 6G is another factor. In anticipation, the communications industry is adjusting to the commercial necessities for 5G through by focusing more on enterprise customers and business modernization requirements. Examples here relate to private networks for smart factories and digital transformation. 

As a standalone technology, IoT is no longer a magnet for hype. Topics such as AI (generative and traditional), digital twins, and enterprise or private networking are generating plenty of noise. 

2023 in Review: Connectivity Dominates but IoT-system Gaps Remain

Two investment themes bookended 2023. In January, the European Union backed a $100m venture capital fund, managed by Momenta Partners. In December, Softbank announced its EUR473m ($514m) investment for a 51% stake in Cubic Telecom. This development more than drew the eye as
exemplified by the analyst commentary around the high (16x) revenue to implied enterprise value multiple. 

In between, the level of corporate activity in the IoT sector continued at roughly the same pace in prior years, albeit down on the years of heightened activity going back five or so years ago. There were several developments among the vendor and network operator communities, but less so among the IoT platform providers. Governments became more active with an emphasis on security and protections for the consumer sector. 

Against the backdrop of 5G developments and 6G pathfinding, IoT is becoming a part of the fabric of enterprise operations and national infrastructure. Established players continue to emphasize connectivity, a relatively small portion of IoT value chains, while enterprises focus on quick-to-market solutions enabled by cloud providers and systems integrators. Both approaches risk leaving ‘system of systems’ issues for later consideration. 

Telco Challenges in Entering Adjacent Markets

I recently come across a couple of experienced industry analysts using some variation of the term “permission to play” when talking about where telco service providers should and should not focus their strategies. As a framework, there is some merit in being disciplined about an organizations core market(s). 

However, if the framework is applied rigidly, the mantra artificially limits the scope for innovation and industry analysis. That is a growing risk for a sector that operates against a backdrop of transformative innovation. It is also a risk because the boundaries between telco, adjacent industries and emerging sectors are blurring.

IoT is Dead; Long Live IoT!

Copenhagen Business School recently hosted an expert panel [1] to explore how algorithms and data shape competition in the context of platforms. These might be e-commerce or social media platforms that exploit consumer data for advertising and behavioral-nudging purposes. The dynamics of this market are changing, partly due to privacy regulations. Competitive strategies, such as Apple’s App Tracking Transparency (ATT) offering, are another factor [2]. 

Among the economic, competitive strategy and technology topics under discussion, the discussion around data seemed particularly relevant to how the Internet of Things (IoT) market is developing. 

2020 in Review: Corporates Adapt Their IoT Business Models

This review of 2020 corporate initiatives in the IoT market builds on a history of tracking strategic industry developments for over a decade. Two sets of corporate events that bookended the start and end of 2020 provide instructive examples of the roadmap and dead ends that characterize today’s IoT market. In the intervening months, organizations in different parts of the industry ecosystem bolstered their IoT strategies. Some developed complementary capabilities through M&A while others addressed go-to-market issues through business reorganization and product-innovation initiatives. For many organizations, however, there remain challenges in balancing short term imperatives with strategic positioning goals. There is a degree of comfort in embracing the familiar. The risk is that this leads to an under-investment in properly integrating new business approaches and complementary technologies.

2018 in Review: IoT puzzle-pieces falling into place

Compared to previous years, the pace of corporate activity in the IoT arena has settled down. This is to be expected in a maturing market cycle. This impression may be at variance with wider industry sentiment where the use of AI/Blockchain/IoT/Machine Learning labelling continues to sensationalize.

As a sign of IoT market reality, the opening event of 2018 dealt with the commercial reality. It took the form of Telefonica O2 withdrawing from the smart home market through the closure of O2 Smart Home. The year ended with a couple of more promising events for the mobile and IoT industries. I’ll touch on these later.

Most activity was concentrated among three groups: technology vendors; network operators (mobile, low-power and virtual); and, platform providers.

What do we know about IoT developers?

A couple reports published in recent weeks have touched on the topic of the IoT developer community. The first one, from Vision Mobile [1], is entitled IoT Megatrends 2015. Based on research involving over 4,000 IoT developers, Vision Mobile identifies four seismic changes that will shake up the IoT market; one of these changes is that 'everyone can become a developer'.

According to Vision Mobile, this development is quite likely to occur in the consumer portion of the IoT market. This is because IoT platforms, such as Pebble, Razer, Android Wear and Apple WatchKit in the smart-watch segment for example, will evolve in ways that allow developers to orchestrate data streams into valuable scenarios for users. Soon, the ability to manipulate data streams will become so easy that everyone can become a ‘developer’. Or, to use a term that I introduced in an earlier post [2], we should expect a data 'taker' class of user to emerge, paralleling the ‘makers’ of the hardware world.

The second IoT developer survey comes from the Eclipse Foundation [3] and this draws on a small (about a tenth of the Vision Mobile sample) sample of real IoT developers (Eclipse eliminated respondents who did not meet its criteria for IoT developers).

The study author admits to a skewed sample base because of factors such as the channels used to recruit participants. Nevertheless, amongst details about the most popular programming languages, protocols and use of open-source technology there was a surprising revelation about the highly visible industry alliances that are evangelizing interoperability and the IoT market.

IoT Roaming

The mobile industry and users of its services are very familiar with the concept of roaming. Roaming allows users to access mobile services outside their home-operator’s footprint. Most users are familiar with roaming in the context of foreign travel. Roaming also occurs when users cannot access their service provider network at home and need to ‘roam’ onto other, local service-provider networks.

M2M service providers and IoT technology developers are now beginning to think about new service scenarios where ‘foreign’ devices enter a local operating environment; I have been using the term ‘IoT roaming’ to describe this situation. There are several reasons why IoT roaming is important, and different compared to traditional ‘roaming’. This is because IoT applications need the ability to recognize and inter-operate with roaming devices. There are knock-on implications for service provider business models and the platform capabilities needed to support IoT applications.