Cellular IoT is evolving rapidly, driven by three distinct trends: the growing demand for actionable data, advancements in edge processing, and the long-anticipated shift from 4G to 5G NR. These trends are not just reshaping the technology landscape, but redefining how businesses, networks, and devices interact. By 2025, they are expected to gain significant traction. Will they compete, or will they converge?
One thing is certain: they will, together, set the stage for the future of IoT.
Rising demand for actionable data
Businesses today require more than just raw data; they demand actionable insights. This trend is particularly visible in industries like utilities, where there is a growing appetite for information that extends beyond traditional metrics like energy or water consumption. For example, utilities increasingly rely on IoT devices to monitor network performance, detect faults, and predict failures.
This shift demands not only more sensors but also more frequent data transmission. What’s at stake is better network management, improved operational efficiency, and enhanced predictive capabilities. This hunger for data is not isolated. Projections from IDC in 2023 anticipated a compound annual growth rate (CAGR) of 28.7 percent for IoT-generated data between 2018 and 2025. Yes, by 2025!
This year, the volume of data is expected to reach 80 zettabytes. Advances in artificial intelligence (AI) and new-generation semiconductors are making it possible to process this massive amount of data, transforming it into actionable insights at scale.
The growth of edge processing
Edge processing and the rise of AI is the second trend reshaping IoT. By enabling devices to process data locally, edge processing reduces the reliance on cloud computing, enhances efficiency, and supports real-time decision-making. That’s the promise of the ‘artificial intelligence of things’ (AIoT).
This capability has wide-ranging implications. For instance, industrial IoT devices equipped with edge processing can detect anomalies and make immediate adjustments without relying on a centralized system. Similarly, wearable health devices can analyze user data on the spot, providing instant feedback.
This trend is accelerated by new ML/AI capabilities at the edge and in the cloud. These solutions, whether integrated with cellular connectivity or standalone, cover specific or broad-spectrum applications. By 2025, edge processing and AIoT are expected to see significant adoption. With the unstoppable growth of data, and the distributed computing requirements between the edge and the cloud, what you need is a strong and reliable connectivity to make this work.
And what is at stake is whether 5G NR finally addresses the IoT market and supports this transition? And whether this can all come together in 2025…
The transition to 5G NR
The long-awaited migration from 4G to 5G NR is finally impacting the IoT sector. This transition should unlock higher speeds, greater capacity, and more power- and spectrum-efficient networks. This transition embodies the robust backbone that distributed computing is waiting for. And beyond that necessary transition, four technical drivers are facilitating this shift starting in 2025:
1 | Standalone 5G
The deployment of standalone 5G (5G SA) networks is now taking place. T-Mobile, for instance, announced in October 2024 the commercial availability of RedCap in the US. Such announcements, and new ones to come, promise a large availability of RedCap by 2027 and eRedCap by 2028. This will mostly start in some regions like North America, and others, like Europe, would come towards the end of the decade.
These technologies provide data rates up to 10 times higher than Cat 1bis and LTE-M. That alone can largely support the growing demand for high-bandwidth IoT applications, as described above.
2 | Cost optimization
While initial 5G NR modules may be costlier, prices will decline as the technology matures. Early adopters in 2025 will enable the technology and bring it to maturity, but mass-market adoption of RedCap and eRedCap for IoT is expected closer to 2027 and 2028 when cost and maturity meet the expectation.
3 | Spectrum efficiency
With increased spectrum availability in the FR1 range (sub-6GHz) coupled with the need of migration for the operators to a more spectrum-efficient technology, 5G networks offer more capacity than current LTE technologies, enabling a larger number of IoT devices.
4 | Energy efficiency
5G NR RedCap and eRedCap bring advanced power-saving capabilities that build upon the energy-efficient features of LTE-M. This native focus will drive quicker adoption across industries.
While 2025 marks the beginning of this transition, it will also – very clearly – not be the year that 5G NR dominates IoT. Instead, it will serve as a foundation for broader adoption in the coming years. And that is exactly what matters and what needs to be monitored in the coming quarters. This also drives the necessity for device manufacturers to start addressing this transition with ecosystem partners that cover the full 4G and 5G scope and which can accompany a smooth migration when the time comes.
Looking ahead
In 2025, these three trends will be in full motion, though their ultimate impact will likely come closer to 2027 or 2028 in some regions and even later at a global scale. The transition to 5G NR will begin, bringing faster speeds, efficient spectrum usage, greater capacity, robustness, and native energy efficiency. Simultaneously, AIoT and distributed processing will grow in adoption, demanding a reliable backbone.
The combination of both will support the growing hunger for data.
The industry’s ability to integrate and balance these forces will determine the shape of the IoT landscape in the years ahead. 2025 will not be the year of a complete transformation, but it will be a critical starting point – IoT’s teenage years, if you like, ahead of a new 5G-rooted adulthood.
