Cities continue to integrate smart infrastructure, and manufacturers seek reliable wireless solutions for new technology demands. Omdia’s recent analysis points to surging connections in the cellular IoT market, largely tied to the rising relevance of 5G RedCap technology and automotive sector needs. Consumers and industry players alike face new options as connectivity standards evolve, with significant implications for how devices interact on a global scale. More widespread connectivity is expected to shift application possibilities in urban, automotive, and enterprise settings.
Past assessments of cellular IoT growth focused predominantly on 4G LTE expansion and highlighted barriers in hardware availability or network readiness for next-phase technologies. Earlier predictions showed conservatism regarding adoption rates for 5G, especially for mid-tier device segments. Now, researcher insights reflect broader market confidence in 5G RedCap, as well as nuanced analysis of automotive demand by region. Recent device launches and early modules indicate acceleration compared to some earlier projections, showcasing momentum that was less visible two or three years ago.
What Technology Is Driving Upcoming Growth?
Omdia’s report points to 5G RedCap, 5G Massive IoT, and 4G LTE Cat-1bis modules as key contributors to expected substantial market growth. RedCap, in particular, is positioned for use in devices that do not need the advanced features of Ultra-Reliable Low Latency Communications or Enhanced Mobile Broadband. Many industry players recognize it as a bridge for continuing device connectivity as older networks are phased out by the next decade. The rising implementation of such modules demonstrates a preference for flexibility, especially in mid-tier applications.
Is 5G RedCap Gaining Market Traction?
Although RedCap’s initial market entrance progressed slower than anticipated, developments in 2025 have introduced new momentum. Analysts note the latest Apple Watch series as one of the first well-known devices integrating RedCap, signifying confidence from major brands. Expectations are that 2026 will witness broader eRedCap module availability, bolstering further device rollouts and market adoption. As RedCap offers compatibility and futureproof features, industry feedback suggests growing utility across both consumer and B2B sectors.
“The implementation of 5G RedCap in the latest range of Apple Watches has signalled the starting gun for RedCap adoption. Going forward, enterprises will have a wider and wider selection of connectivity technologies to benefit any application. The expected launch of 5G eRedCap modules in 2026 will provide further cellular IoT connection growth over the next decade.”
Will Automotive IoT Dominate Growth in the Next Decade?
The automotive industry is forecast to experience a sharp increase in cellular IoT integrations, moving from about 500 million to approximately 1.2 billion connections by 2035. Much of this expansion is anticipated in Asia and Oceania, where smart vehicle adoption is accelerating. Consumers now expect connected services, regulatory bodies require advanced features, and manufacturers aim for real-time vehicle data. As a result, automotive will rise from a 13% to a 21% market share of all cellular IoT connections.
“The rapid rise of software-defined vehicles, the fundamental need for over-the-air updates, regulatory mandates and vehicle-to-everything, are all made possible by cellular connected vehicles, which is why we expect to see vehicles represent 1 in 5 cellular connections by 2025.”
IoT adoption continues to differ by region and segment, with earlier dominance by logistics and utility meters now shifting toward connected mobility solutions and industrial applications. Adoption rates also vary depending on infrastructure investment, regulatory landscape, and device ecosystem maturity. Industry stakeholders monitor these shifts closely, considering that standardization and availability of mid-tier modules like RedCap can serve as a catalyst for broader IoT growth. Large-scale deployments are expected to bring challenges, including data management and network security, but also present new market opportunities for device makers and service providers.
The global expansion of cellular IoT will likely shape technology investment decisions, from urban planning to consumer wearables and transport innovation. Those interested in deploying IoT networks should evaluate module choices, longevity of connectivity standards, and regional adoption patterns. With the automotive sector poised to lead and significant growth projected for mid-tier devices through RedCap implementations, attention to evolving ecosystems may provide a competitive edge. Observing how companies like Apple anchor RedCap in their product strategies can offer valuable clues for forecasting future connectivity needs across different use cases.
