Gartner’s $953B IoT forecast puts 81% of spending in endpoints and the fastest growth in software

The new Gartner IoT forecast puts four out of every five dollars in devices, and the fastest growth in the software that runs them.

Published September 25, the forecast sizes the worldwide IoT market opportunity at $736.6 billion in 2026, up 9.6%, and $953.3 billion by 2030. That is a 7.2% compound annual growth rate from 2025 through 2030, landing just under $1 trillion.

Endpoint electronics account for $769.2 billion of the 2030 total, or 80.7%. Application software grows at 20.4% a year and infrastructure software at 14.8%. Together, the two software segments compound at 16.3%, 2.3 times the market.

The trillion-dollar mark also moved. Gartner’s previous edition, published in June 2024, put the 2028 market at $990.5 billion. The new edition puts 2028 at $850.3 billion, a $140.2 billion reduction, and does not cross $1 trillion before 2030.

I built this analysis from Gartner’s forecast report (G00858825) and the full detailed dataset behind it: 73,493 rows covering 6 technology segments, 28 subsegments, 12 sectors, 47 use cases, 9 regions and 7 years.

Each bar in the hero chart stacks Gartner’s six technology segments in current U.S. dollars. Navy is endpoint electronics, mid-blue is communication services, sky blue is services, teal is infrastructure software, purple is application software and red is security. Italic figures above each bar give year-over-year growth.

Six tiles underneath carry the 2026 and 2030 totals, the $281.0 billion in new spending between 2025 and 2030, the application software growth rate, the 5G growth rate and the 2028 revision against the 2024 edition.

Gartner IoT forecast puts 2026 at $736.6B and 2030 at $953.3B

Gartner sizes the market across six technology segments. Here is how each one moves from 2025 to 2030.

Segment	2025	2026	2030	2025-2030 CAGR	2030 share
Endpoint electronics	$545.8B	$600.7B	$769.2B	7.1%	80.7%
Communication services	$56.7B	$58.8B	$66.3B	3.2%	7.0%
Services	$41.0B	$43.9B	$57.7B	7.1%	6.1%
Infrastructure software	$19.9B	$23.0B	$39.7B	14.8%	4.2%
Application software	$6.9B	$8.3B	$17.5B	20.4%	1.8%
Security	$1.9B	$2.1B	$2.9B	8.6%	0.3%
Total	$672.3B	$736.6B	$953.3B	7.2%	100%

Current U.S. dollars. CAGR and shares calculated by softwarestrategiesblog.com from Gartner’s dataset.

Growth peaks early. Gartner forecasts 9.6% in 2026 and 8.5% in 2027, then 6.4% in 2028, 6.1% in 2029 and 5.7% in 2030. Endpoint electronics drive the near-term numbers, growing 10.0% in 2026 and 8.7% in 2027 before slowing to 5.1% by 2030.

Software moves the other way. Application software growth rises from 20.2% in 2026 to 21.8% in 2030, and security growth climbs from 8.2% to 9.4%.

Endpoints add $223.4B, application software grows 2.8x faster

The market adds $281.0 billion between 2025 and 2030. Endpoint electronics capture $223.4 billion of it, or 79.5%.

The bubble chart below rebuilds Gartner’s own segment view from the dataset. The horizontal axis is growth rate, the vertical axis is dollars added, and bubble size is 2030 market opportunity.

Application software grows 2.8 times faster than the market but adds only $10.6 billion. Infrastructure software adds $19.8 billion at 14.8%. Software’s share of IoT spending rises from 4.0% in 2025 to 6.0% in 2030.

Gartner ties the software growth to connecting devices with enterprise systems, predictive maintenance, operational optimization and digital twin projects that run on IoT platforms. Software, services and security together climb from 10.4% of spending in 2025 to 12.4% in 2030.

That is the strategic split in this forecast. Hardware sets the size of the market. Software, services and security decide who captures recurring value once the devices are installed.

Gartner cut $140.2B from its 2028 forecast

Gartner’s Table 2 compares this edition with the June 2024 edition, which ran through 2028. The new forecast is $113.8 billion lower for 2025 and $140.2 billion lower for 2028.

Endpoint electronics took the largest dollar cut, $102.6 billion in 2028. Its growth rates went up anyway: 8.9% to 10.0% in 2026, 7.0% to 8.7% in 2027 and 4.8% to 6.1% in 2028. A lower starting base, growing faster.

Services took the deepest percentage cut. The 2028 services forecast fell 37.6%, from $80.5 billion to $50.2 billion, with growth rates lowered 11 to 16 points in every year from 2025 through 2028.

Application software, infrastructure software and services all lost growth in the revision. Gartner says enterprise spending on software, security and services “is expected to develop more cautiously as organizations become more selective in scaling and expanding IoT environments.”

Security is the exception on dollars. Its 2028 forecast rose $665 million, or 37.3%, and Gartner lifted its 2028 growth rate from 6.7% to 8.6%.

Total 2028 growth moved up slightly, from 6.2% to 6.4%. The level is lower; the slope is about the same.

Automotive and manufacturing hold 55% of 2030 spending

Automotive is the largest IoT sector at $322.1 billion in 2030. Manufacturing and natural resources follows at $198.9 billion. Together they account for 54.6% of the 2030 market.

Manufacturing is the growth story among the large sectors. It grows from $119.6 billion in 2025 to $198.9 billion in 2030, a 10.7% CAGR, adding $79.3 billion. Gartner expects it to grow 13.4% in 2026 and 15.0% in 2027.

Transportation reaches $109.8 billion at a 10.0% CAGR, with 16.0% growth in 2026 and 14.0% in 2027. Smart buildings, the fourth-largest sector at $107.2 billion, grows just 2.8% a year.

Inside manufacturing, software and services matter more than in the market overall. Application and infrastructure software reach $33.4 billion in the sector by 2030, 16.8% of its spending, compared with 6.0% for IoT overall. Services add another $32.3 billion.

Connected cars and factories add the most, EV charging grows fastest

Consumer connected cars remain the single largest use case, reaching $219.8 billion in 2030 and adding $58.3 billion. Manufacturing process automation adds $34.9 billion and air transport adds $28.8 billion.

Gartner names EV charging, manufacturing execution and management and connected products as the fastest-growing use cases from 2028 to 2030, at 18.6%, 12.0% and 11.3% CAGRs. The dataset also shows retail customer communication growing 12.9% over the same window, on a much larger $20.4 billion base.

Manufacturing execution and management is the standout among large use cases. It more than doubles, from $15.7 billion in 2025 to $32.8 billion in 2030, a 15.8% CAGR. Gartner attributes the growth to real-time control and optimization requirements on the factory floor.

Four use cases shrink. Connected lighting falls from $15.6 billion in 2025 to $7.5 billion in 2030. Automotive insurance declines from $6.4 billion to $4.3 billion, outdoor surveillance from $7.4 billion to $6.9 billion, and commercial automotive aftermarket from $2.1 billion to $1.5 billion.

5G grows 4.7x while 4G and below shrink

Communication services is the slowest-growing segment at 3.2% a year, but the mix inside it changes fast.

IoT 5G connectivity grows from $2.2 billion in 2025 to $10.1 billion in 2030, a 36.2% CAGR. Satellite grows from $7.8 billion to $13.2 billion at 11.0%. Cellular 4G and below, still the largest connectivity line, falls from $43.0 billion to $38.5 billion.

Gartner links connectivity to digital thread solutions that connect IT, OT and product life cycle data across the industrial value chain, the data foundation digital twins need.

Security is 0.3% of IoT spending

Gartner’s IoT security segment grows from $1.9 billion in 2025 to $2.9 billion in 2030. That is 0.3% of the 2030 market, against $769.2 billion in endpoints.

Security software, which Gartner counts inside infrastructure software, is the second-fastest-growing software subsegment at 21.2% a year, reaching $7.4 billion. Add it to the security segment and IoT security reaches $10.3 billion by 2030, still 1.1% of the market.

Analytic platforms lead software growth at 24.5%, reaching $9.6 billion. Database management systems grow 19.2% to $10.0 billion. IoT platforms, the middleware layer Gartner credits with connecting devices to enterprise systems, grow 12.5% to $14.0 billion.

For security leaders, the gap is the point. Every connected robot, vehicle, meter and controller extends the OT attack surface, and spending to secure those endpoints grows at about a penny per dollar of IoT spend, even counted broadly. For the broader security market context, see Gartner’s $247.5B security forecast makes post-quantum firewall refreshes the only upgrade through 2030.

North America, China and Europe hold 75% of 2030 spending

North America is the largest region at $260.5 billion in 2030, followed by China at $229.9 billion and Europe at $224.2 billion. Together they hold 74.9% of the market.

North America grows slowest of the three, at 5.8% a year. Emerging Asia Pacific grows fastest, at 14.7%, reaching $53.0 billion. Sub-Saharan Africa grows 12.9% and Latin America 11.9%, both from small bases.

Gartner’s report also flags the war in the Middle East. It expects disruptions to the Strait of Hormuz to continue into 2027, with energy prices more than 50% above pre-war levels. Gartner expects the main near-term impact on IT spending to be a rebalancing of sourcing, vendor relationships and regional exposure rather than a material spending reduction.

A reading note on Gartner’s Table 2

The growth-rate columns in Gartner’s Table 2 are labeled 2025 GR, 2027 GR, 2028 GR and 2029 & 2030 GR. The values line up with 2025, 2026, 2027 and 2028.

The endpoint electronics changes of 1.1, 1.7 and 1.3 points match the revisions Gartner describes in its text for 2026, 2027 and 2028. I read the table that way throughout this analysis.

Gartner’s text also says the highest growth by 2030 comes from communications, media and services and transportation. In the dataset, communications, media and services is a $1.8 billion sector growing 11.0% a year, and transportation’s 10.0% CAGR trails manufacturing’s 10.7%.

What technology leaders should do with this forecast

• Plan for AI-ready endpoints. Gartner credits endpoint growth to connected products, connected vehicles and AI-ready, edge-intelligent devices, including robots and industrial equipment. Device refresh plans should assume edge inference.
• Budget for the software layer, not just devices. Software grows 16.3% a year against 7.1% for endpoints. Integration, analytics and IoT platforms are where projects stall or pay off.
• Close the security gap early. IoT security, even counted broadly, is 1.1% of 2030 spending. Asset discovery, identity, segmentation and secure updates belong in the IoT business case.
• Retire 4G-dependent fleets on a schedule. 4G and below shrinks every year from 2026 while 5G grows 36.2% a year.
• Treat manufacturing execution as the growth zone. At 15.8% a year, it is the fastest-growing large use case in the forecast.

Frequently asked questions

How big is the IoT market according to Gartner? Gartner forecasts worldwide IoT market opportunity of $736.6 billion in 2026 and $953.3 billion in 2030, a 7.2% CAGR from 2025.

Which IoT segment is largest? Endpoint electronics, at $769.2 billion in 2030, or 80.7% of the market.

Which IoT segment grows fastest? Application software, at a 20.4% CAGR from 2025 to 2030, reaching $17.5 billion.

Did Gartner lower its IoT forecast? Yes. The 2028 forecast fell from $990.5 billion in the June 2024 edition to $850.3 billion, a $140.2 billion reduction, while 2028 growth edged up from 6.2% to 6.4%.

How fast is IoT 5G growing? IoT 5G connectivity grows at a 36.2% CAGR, from $2.2 billion in 2025 to $10.1 billion in 2030.

How I built this analysis

All market sizes are Gartner IoT market opportunity in current U.S. dollars from the detailed dataset behind G00858825, which reconciles to Gartner’s Table 1 totals. Growth rates for years and segments match Gartner’s published figures.

CAGRs for sectors, regions, subsegments and use cases, dollar additions, shares and the combined IoT security figure are my calculations. June 2024 edition values are derived by subtracting Gartner’s Table 2 dollar changes from the new forecast.

Earlier analysis in this series:

• Gartner’s $812.6B app software forecast sends 38% of new spending to CRM as agentic AI targets $116B of legacy apps
• Gartner says frontier AI makes patch speed a vanity metric. Tolerable exposure time replaces it.
• Gartner’s $247.5B security forecast makes post-quantum firewall refreshes the only upgrade through 2030
• Gartner’s $239B AI forecast: Agentic workflows take half of GenAI model revenue
• Gartner’s AI security forecast exposes 162x services growth that still trails software 2 to 1 in new spending
• Gartner’s $5.95 trillion AI forecast puts the chatbot era on a 2027 deadline

This post is my personal analysis of Gartner’s IoT research and does not represent my employer.

Sources

• Gartner, Forecast: IoT Market Opportunity by Technology Segments and Vertical Industries, Worldwide, 2024-2030, Srujan Akurathi, 25 September 2026, G00858825, including the accompanying IoT Market Opportunity Forecast dataset.
• Gartner, Forecast: IoT Market Opportunity by Technology Segment, 2022-2028, 11 June 2024 (prior edition referenced in G00858825 Table 2).