Gartner predicts IoT market to grow to $991 billion by 2028 (2024)

Gartner predicts the IoT market will nearly double, soaring from $546 billion in 2022 to $991 billion by 2028.

Citing the growing demand across 14 key industries for IoT and IIoT endpoints strengthened by improved security, connectivity, and widespread adoption in industrial automation and smart cities, Gartner predicts IoT spending will grow at a 10.3% compound annual growth rate (CAGR) through 2028.

The IoT market's defining phase of growth will be between 2025 and 2028 when Gartner predicts pervasive adoption of 5G technology, growing investment in IoT infrastructure, and AI-native IoT applications will propel the market to $991 billion by 2028.

IoT's five highest-growth sectors

The top five fastest-growing sectors of the IoT market include insurance, transportation, manufacturing and natural resources, oil and gas, and commercial automotive. Insurance is a small but fast-growing segment, as insurers use better sensor data to quantify risk and minimize losses.

Fastest-growing technology segments

Software and IT services are the two fastest-growing technology segments. Gartner tracks the growth of enterprise software sales in the IoT market, with analytics platforms, CRM, supply chain management, and ERP predicted to be the fastest-growing segments. Endpoint electronics are predicted to continue to account for approximately 80% or more of the IoT market value through 2028.

AI apps predicted to be an IoT growth catalyst

Native AI applications, code generation tools, and platforms will further accelerate IoT market spending through 2024. Gartner predicts that edge AI and generative AI (genAI) will prove to be among the most valuable contributors to IoT market growth.

Combining edge AI and generative AI (GenAI) allows IoT devices and systems to analyze data locally and in real time. This boosts processing speed, cuts down on delays, and makes new features possible for the next generation of products.

"The combination of enhanced edge device capabilities and the enabling AI/ML software allows IoT product leaders to deliver targeted and required business outcomes based on local contextualized data," writes Gartner in their recent report, Emerging Tech: Empower Outcome-Centric IoT with AI.

Market projections Gartner provides in their report that predict AI's impact on IoT include the following:

• By 2025, more than 95% of new industrial IoT deployments will include analytics and AI-edge inference capabilities, a substantial increase from less than 30% in 2022.
• By 2025, 80% of the product development life cycle will utilize GenAI code generation, with engineers serving as architects, validators, and orchestrators, up from less than 20% today.
• By 2026, more than 80% of independent software vendors (ISVs) will have embedded GenAI capabilities in their enterprise applications, a significant rise from less than 5% today.