Only 4.5 billion of the world's 22.3 billion IoT devices used cellular connectivity last year, according to Ericsson's latest Mobility Report — 3 billion fewer than the number of smartphones in circulation and far short of the "massive" adoption the industry promised when it marketed 5G.

The gap is the clearest measure yet of the mobile industry's IoT failure. Back in 2011, Cisco's Dave Evans forecast 50 billion IoT devices worldwide by 2020. The actual figure at that point fell 27.7 billion short of his prediction, based on Ericsson's data. What stung 5G backers even more was how few of the connected objects relied on mobile networks rather than Wi-Fi, Bluetooth or other short-range technologies.

Between 600 and 700 million of those cellular IoT connections still ran on 2G and 3G systems, according to a chart in the Ericsson report. The remainder split between what Ericsson calls "massive" IoT — NB-IoT and Cat-M, both born under 4G for low-power wide-area services — and a broadband/critical IoT category that includes RedCap alongside Cat-1 and Cat-1 bis, standards capable of 10Mbit/s downlink and 5Mbit/s uplink.

NB-IoT retreats to China

NB-IoT was a defensive move, rushed out after the non-cellular LPWA technologies Sigfox and LoRa threatened to go mainstream using unlicensed spectrum. NB-IoT and Cat-M together accounted for no more than 1.3 billion connections last year, and most of those sit in China, where the government appears to have mandated NB-IoT rollout to support Huawei, one of the technology's original backers. Omdia, a sister company to Light Reading, reckoned in mid-2024 that China hosted 90% of all NB-IoT connections worldwide.

Elsewhere, interest has faded. France's Orange never had much use for NB-IoT. Japan's NTT Docomo switched off its NB-IoT network in 2020. AT&T in the US decommissioned its own network last year, saying it preferred Cat-M — despite the two standards originally being aimed at different use cases.

RedCap waits for 5G SA

RedCap, short for "reduced capability," is the newest IoT standard in the showroom, suitable for devices as unsophisticated as a connected screwdriver, according to Ericsson, which demonstrated a 5G-equipped tool at its Stockholm headquarters earlier this month. But module pricing remains a barrier. Omdia, in a research note this week, complains that "adoption has been limited by high module prices," among other things, even for higher-end devices such as the Apple Watch. The analyst company expects the forthcoming eRedCap to fare better.

The deeper constraint is 5G standalone coverage. RedCap will not work without it, and in a LinkedIn post this week Ericsson CEO Börje Ekholm put 5G SA adoption at just 6% in Europe, compared with 50% in the US and 98% in China. Some operators may never make the transition at all. "It should be noted that some MNOs may struggle to identify clear value to migrate to 5G SA, after initially deploying 5G NSA," said a new 6G report from the NGMN Alliance, a club of prominent telcos.

The commercial incentive is weak because IoT barely moves the revenue needle. Financial reports from some major telcos have shown IoT contributing as little as 1% or 2% of total service revenues. Selling bespoke connectivity contrasts sharply with the mass-market smartphone business operators are built for. Sigfox, whose business model at least revolved around IoT, collapsed into bankruptcy in 2022 before Singapore's UnaBiz acquired its assets.

Forecasts diverge sharply too. Ericsson expects cellular IoT connections to grow to 7.8 billion by 2031. Omdia does not expect the figure to reach 5.9 billion until 2035 — by which time 6G networks will likely have been in commercial operation for five or six years.

6G pivots to robots and glasses

Despite this record, the 6G narrative is doubling down on devices rather than smart meters. Ericsson's Mobility Report talks of a "supercycle, an unusually strong multi-year upgrade wave" carrying smart glasses and other "connected physical AI device form factors," with chipset vendors "interested in being in the next generation from the start." Robots featured prominently at Ericsson's MWC Barcelona stand this year, and connected humanoids look far more lucrative to telcos hunting growth in a saturated smartphone market than LPWA services ever did.

Much of the IoT, in truth, never needed cellular at all. By 2031, Ericsson expects 47.1 billion total IoT connections, of which 38.8 billion will use short-range technologies such as Bluetooth, ZigBee and Wi-Fi. Unless module prices fall and 5G SA coverage spreads, the humbler end of the cellular IoT market risks remaining where 5G left it: promised a future, never quite delivered one.