Global IoT connections will reach 40 billion in 2033, according to industry analyst firm Transforma Insights.

At the end of 2023, there were 16.1 billion active IoT devices, a figure that will increase to 39.9 billion in 2033, at a CAGR of 10%. Annual device sales will grow from 4.1 billion in 2023 to 8.7 billion, at a CAGR of 8%.

Short range technologies will dominate connections, accounting for 73% in 2033, a slight reduction on the 79% they account for today.

Cellular connections will grow from 1.9 billion at the end of 2023 to 7.5 billion at the end of 2033. By 2033, total 5G including mMTC will be 5.5 billion, but just 1.1 billion will be full 5G New Radio (NR). The remainder will be mMTC technologies such as NB-IoT and LTE-M. The biggest 5G non-mMTC use case is vehicle head units, accounting for 41% of connected units in 2033.

Other low-power wide area technologies such as LoRaWan will collectively grow from 360 million in 2023 to just over two billion in 2033.

In revenue terms, the total IoT market – defined as including connectivity modules, value added connectivity and core associated applications – in 2023 was worth $335bn, a figure that will rise to $934bn in 2033. Value added connectivity will account for a tenth of spend in 2033, with the connectivity modules accounting for a further 4%.

In 2033 the consumer sector will account for 61% of all connections. Of the enterprise segment in 2033, 35% of devices will be accounted for by cross-vertical use cases such as generic track-and-trace, office equipment and fleet vehicles, 24% by utilities, most prominently smart meters, 22% by retail and wholesale, predominantly payment processing devices and electronic shelf labels, 7% by government, 4% by transport and logistics, and 3% for agriculture.

Geographically, China, North America and Europe dominate, accounting for 32%, 21% and 19%, respectively, of the total value of the IoT market in 2033.

“The growth in adopting IoT continues at a steady pace, reflecting the diversity of use cases encapsulated within the concept,” said principal analyst Matt Arnott. “It’s not a hockey stick and never has been, but a series of micro-markets that each have their own dynamics, with some growing faster and others slower. There are micro-level factors that can massively accelerate growth such as the requirement in Spain to adopt breakdown beacons, and there are notable macro-level trends which will also have knock on effects on growth, such as populations aging even faster than expected. To forecast the IoT market you need to understand both, and much more besides.”

The report provides a summary of the data within Transforma Insights’ granular IoT Forecast Database and associated Forecast Insight reports, which together provide application-by-application analysis of the market.

“Transforma Insights analysts have been forecasting the internet of things market opportunity for over a decade,” said Matt Hatton, founding partner at Transforma Insights. “Back in 2011 our analysts’ expectation of 12 billion IoT devices by 2020 was close to the bottom of the league table of predictions but proved to be easily the most accurate. Today as Transforma Insights our team continues to provide the most extensive and deeply researched forecasts of the IoT, making ours the benchmark against which all predictions of IoT market growth should be compared.”

Details of the report can be found at transformainsights.com/research/reports/global-iot-forecast-report-2023-2033.