By the close of 2025, 21.1 billion IoT devices will be active worldwide, up from 18.5 billion in 2024, according to IoT Analytics' latest tracking. That 14 percent year-over-year increase adds roughly 2.6 billion connected objects in a single cycle. The growth is not evenly distributed: Wi-Fi holds 32 percent of all IoT connections, Bluetooth accounts for 28 percent, and cellular IoT makes up 15 percent, with the remainder spread across LPWAN, Zigbee and emerging protocols. Jan Hoetink, analyst at International Data Corp, noted in a September briefing that Chinese demand softness and capex deferrals are behind the forecast revision of nearly 300 million devices from earlier projections.
Matter, the interoperability standard backed by Apple, Google, Samsung and the Connectivity Standards Alliance, has moved past its early-incompatibilities phase. As of June 2026, more than 10,000 Matter-certified products have shipped, ranging from light switches at $8 apiece to industrial sensors costing several hundred dollars. The protocol's Thread networking layer has particularly benefited from version 1.4, which standardized credential sharing so new border routers can join existing meshes instead of forcing a separate network. Ann Olivo, head of marketing at the Thread Group, told The Verge that only Thread 1.4-certified border routers will be accepted after January 1, 2026, a deadline that has accelerated vendor upgrades across the ecosystem.
The combination of 21.1 billion connected devices and a maturing interoperability standard means that 2026 is the year a typical home or office can expect more than a dozen brands' devices to coexist on the same network without manual configuration. For consumers, that means a light bulb from one manufacturer can dim when a motion sensor from another triggers, without a custom hub or proprietary app. For businesses, it means inventory systems, climate controls and security cameras from different vendors can report to a single dashboard. The average smart home already hosts 15.3 connected objects, a number projected to reach 27 by 2029, and Matter's progress directly determines whether that growth adds friction or smooth operation.
Matter Protocol Push Toward Thread 1.4
Thread 1.4 arrived in fall 2024 and introduced a standardized way for border routers to join existing meshes. Before this version, each new router tended to create its own network, splitting the mesh and forcing devices to reconfigure. SmartThings was the first platform to implement the credential-sharing feature, followed by Ikea. Applications based on Thread 1.3 will no longer be accepted as of January 1, 2026, a deadline that has prompted vendors to certify their border routers at an accelerated pace. The goal is to make battery-powered sensors last as long as their Zigbee counterparts, which have benefited from two decades of optimization Thread has yet to match.
Ikea's Thread offensive, comprising more than 20 new products, is the clearest signal yet that mainstream retailers are betting on the protocol. Aqara, Bosch, Home Assistant, Level, Meross, Philips Hue and Yale have all brought new products to market, while Samsung has quietly equipped a growing number of devices with a Thread border router. Professional suppliers ABB, Maco and Warema have also joined, lending Thread credibility in building automation. Announcements are expected at CES in January 2026 and at the Light + Building trade fair in March 2026.
AI at the Edge Changes How Devices Think
Edge AI hardware has entered the low-power segment in the past two years. NXP's i.MX family now includes chips that run object-detection models at under 100 milliwatts, a level that a small solar cell or a coin-cell battery can sustain for months. Cameras running local inference can alert on a person at the gate without uploading full video to the cloud, cutting bandwidth use by up to 80 percent. The trade-off is less flexibility: if the model needs updating, a firmware patch is required rather than a cloud-scale retraining pipeline. Still, for use cases such as intrusion detection or occupancy counting, the local approach delivers faster responses and stronger privacy guarantees.
A recent field study by the University of Tokyo found that edge-AI-enabled sensors in Japanese factories reduced false-positive alarms by 37 percent compared to cloud-dependent systems. The same study showed that battery life for a temperature sensor dropped only 12 percent when running local inference versus 45 percent for a cloud-reliant version. These numbers matter because many industrial IoT deployments operate in remote locations where cloud connectivity is unreliable or absent. The shift toward on-device intelligence is no longer a niche experiment; it is becoming the baseline for cost-effective, resilient deployments.
Satellite Connectivity Expands IoT Reach
Skylo Technologies, a provider of direct-to-satellite connectivity for IoT devices, announced in May 2026 that its chipset is now integrated into 3 million wearables sold by a major Asian manufacturer. No cellular subscription is needed: the service uses L-band spectrum. By 2030, non-terrestrial extensions could add 1.2 billion IoT endpoints, mostly in regions where terrestrial infrastructure is too costly. Satellite-connected devices typically see battery life reduced to one-third of what they achieve on terrestrial networks.
LoRaWAN Alliance president Marta Iwanek told Reuters that non-terrestrial network extensions are expected to add 1.2 billion additional IoT endpoints by 2030, primarily in regions where terrestrial infrastructure has been too costly to deploy. The alliance has been working with regulators to approve low-power wide-area networks using unlicensed spectrum above 2 GHz, opening a new lane for rural and maritime sensors. Lacuna Space has already deployed LoRaWAN satellite gateways serving offshore wind farms and shipping lanes, with latency under two seconds for small packets.
Regulation Pushes IoT Security Front
The EU's Radio Equipment Directive now requires over-the-air security updates for all connected devices sold in member states after August 2026. Non-compliant products face fines of up to 4.5 percent of annual revenue. In the United States, the FCC has proposed similar labeling rules that would require manufacturers to display the expected duration of security updates on product packaging. These requirements come as the average IoT device in a corporate network is estimated to go unpatched for 14 months, a window that botnets have learned to exploit. Compliance software provider Senrio reported in Q2 2026 that 63 percent of tested industrial gateways failed the new EU security baseline.
The directive also mandates pre-market testing against harmonized standards, meaning manufacturers cannot retrofit compliance after a breach. Similar proposals are advancing in Japan, South Korea and Australia, all targeting the same gap: devices that ship with known flaws and never receive patches. Senrio's report found that 63 percent of tested industrial gateways failed the new EU security baseline, with the most common failings being weak default credentials and absent firmware-signing mechanisms.
Outlook: What 2026 Means for IoT
2026 is the year the ecosystem matures. The Matter standard has moved from a niche smart-home protocol to a de facto baseline for interoperable devices. Thread 1.4 has eliminated the mesh-splitting problem that plagued early adopters, and edge AI is moving from experimental to production-grade in industrial settings. Satellite connectivity is opening remote areas to IoT, and regulation is finally forcing manufacturers to deliver security that actually works.
For businesses, the implications are clear: integrating new devices into existing networks will require far less configuration than a year ago. For consumers, the promise is a home where a thermostat from one brand can learn the habits of a sensor from another without a custom hub. The average smart home will host 27 connected objects by 2029, and the Matter standard will be the thread that ties them all together. The next wave of growth will come from AI-driven automation and satellite-enabled remote sensing, but the foundation is already solid. desk coverage Reuters