Critical IoT connections to reach 4.8 billion by 2033

The Internet of Things (IoT) is already part of the vocabulary used by the technology world. Laypeople may not use the term as often, but that doesn’t mean they don’t live with IoT devices on a daily basis, such as consumer electronics, smart watches, vehicles and medical devices, interconnected to each other and to the cloud. There is, however, a subset of the IoT that is considered critical and requires a highly reliable network and communications infrastructure. And the number of these Critical IoT connections is expected to reach 4.8 billion by 2033.

We can say that there are two broad classes of IoT. One is mass deployment, with applications that use hundreds, thousands or even millions of terminals, using small sensors, objects or machines. In general, IoT transmits small volumes of data to remote locations, consuming little energy but with good range.

On the other hand, unlike mass IoT, Critical IoT usually has applications that help save lives and protect facilities, for example, working with emergency services, patient monitoring and the security of countries, companies and workers, among others.

By its nature, Critical IoT requires reliable, low-latency, high-bandwidth connectivity in order to work in real time with precise positioning data. Connection failures or interruptions can have serious consequences. As Ericsson’s article explains, although mass IoT already existed over 4G networks, Critical IoT has gained momentum with the arrival of the most advanced 5G networks, which have the potential to meet its stringent connection requirements.

In a recent study, Transforma Insights made granular forecasts for the IoT connectivity market, covering hundreds of applications, including critical ones. For the purposes of this analysis, categories were created based on criticality rules.

The graph below shows the total number of cellular IoT connections globally divided into five categories. Of the total of 1.9 billion active connections at the end of 2023, 83 per cent were in some way “critical”. And, according to Transforma Insights’ forecast, by 2033 this figure should reach 4.8 billion, although it will decrease to 69 per cent in proportional terms due to the large volume of consumer electronic devices.

Also according to Transforma Insights, it is notable that truly “critical” IoT applications will only account for around a third of connections. Life-critical and business-critical will account for four per cent each. More dominant in terms of volume of connections will be applications that fall into the “Critical National Infrastructure” category, accounting for 27 per cent of the total. The dominant use cases will be smart metering and smart grids. Smart metering of electricity, gas and water will collectively account for two-thirds of the connections in the “Critical National Infrastructure” category in 2033.

What is not surprising is the fact that applications with an impact on health, which are not directly critical, will account for the second most significant volume of devices. This is the wellness category, which will account for 22 per cent of connections in 2033. A further 11 per cent of connections in 2033 will be responsible for applications in which maintaining connectivity is important, but perhaps not so critical or involving situations in which connectivity failures are easy to resolve.

According to Transforma Insights, the total value generated by connectivity for Critical IoT is $37 billion out of a total market of $63 billion, i.e. a 58 per cent share. The possible explanation for this percentage being lower than the proportion of connections comes from the fact that use cases for consumer electronics will generate much higher average revenues per connection than smart meters.

Low quality of IoT connections

Companies are settling for poor quality connectivity solutions for the Internet of Things (IoT), with only 1% achieving levels higher than 98% on average across all their device sets. And only 16 per cent achieve levels higher than 95 per cent, according to an Eseye report based on a survey by Opinion Matters.

The interviewees seemed satisfied with the services, despite connectivity levels significantly below those proposed by best practices. Companies probably lack the technical expertise to make the most of their IoT investments. Although investments and the number of devices are growing, a lack of emphasis on quality is holding the sector back, the study points out. Almost all of those interviewed (95 per cent) said that cost is an important aspect when choosing a connectivity service provider.