IoT in Smart Cities Market Report 2026

The iot in smart cities market size has grown exponentially in recent years. It will grow from $269.36 billion in 2025 to $329.41 billion in 2026 at a compound annual growth rate (CAGR) of 22.3%. The growth in the historic period can be attributed to urban population growth, government smart city initiatives, early adoption of smart lighting systems, need for efficient public services, rising energy consumption in cities.

The iot in smart cities market size is expected to see exponential growth in the next few years. It will grow to $742.23 billion in 2030 at a compound annual growth rate (CAGR) of 22.5%. The growth in the forecast period can be attributed to expansion of smart city investments, integration of AI driven city analytics, growth of connected transportation systems, rising focus on sustainability goals, adoption of city wide data platforms. Major trends in the forecast period include smart infrastructure management, connected urban services, real time city monitoring, intelligent energy management, smart public safety systems.

The increasing adoption of 5G technology is anticipated to accelerate the growth of the IoT in the smart cities market in the coming years. 5G is the fifth generation of cellular technology that enables faster, more reliable, and more flexible wireless communication. It is expected to serve as a major catalyst for IoT deployment in smart cities by providing a robust platform to connect a vast number of sensors and actuators with high energy efficiency and seamless data transmission. As a result, the rising implementation of 5G technology is set to boost the growth of the IoT in the smart cities market. For instance, in March 2023, according to the Global Mobile Suppliers Association (GSA), a UK-based nonprofit organization representing the mobile communications industry, there were 1.15 billion 5G subscribers worldwide by the end of 2022, an increase of more than 530 million from 619 million a year earlier. This represents an 85.9% year-on-year growth. 5G subscriptions accounted for 10.7% of total global mobile subscriptions and were projected to reach 16% by the end of 2023 with 1.77 billion subscribers. Thus, the expanding adoption of 5G technology is expected to propel the advancement of the IoT in the smart cities market.

Leading companies operating in the IoT in the smart cities market are focused on developing new digital business platforms to achieve a competitive advantage. Digital transformation involves the use of digital technologies to fundamentally reshape and improve business operations, strategies, and customer experiences. For example, in July 2025, Vodafone España, a Spain-based telecommunications company, announced the launch of its proprietary IoT platform targeted at enterprises and public administrations. The platform is intended to support smart city and public service applications such as city management, logistics, water-cycle management, tele-assistance, and emergency services. Vodafone’s IoT platform is built on its extensive NB-IoT network, which already connects more than 9.3 million devices, delivering high scalability, low latency, and energy-efficient connectivity.

In October 2023, Kontron AG, an Austria-based provider of embedded computing platforms and IoT technology hardware and software solutions, acquired Bsquare Corporation for approximately US $38 million. Through this acquisition, Kontron aimed to strengthen its IoT software capabilities and expand its smart city and connected-device offerings, reinforcing its end-to-end hardware and software portfolio for urban infrastructure and smart systems markets. Bsquare is a U.S.-based company that supplies IoT device software, device management platforms, and connectivity services for industrial and smart city applications.

Major companies operating in the iot in smart cities market are Cisco Systems Inc.; Intel Corporation; The International Business Machines Corporation (IBM); Huawei Technologies Co. Ltd.; Tech Mahindra Limited; Microsoft Corporation; Honeywell International Inc.; Bosch Global Software Technologies Private Limited; Siemens Incorporation; PTC Inc.; ARM Inc.; Schneider Electric SE; Deutsche Telekom AG; Hitachi Ltd.; SAP SE; Dell Technologies Inc.; Samsung SDS Co. Ltd.; Hewlett Packard Enterprise Company LP; Toshiba Corporation; Panasonic Corporation; Sony Corporation; LG Electronics Inc.; Philips Lighting Holding B.V.; Osram Licht AG; Cree Inc.; Acuity Brands Inc.; General Electric Company; Verizon Communications Inc.; AT&T Inc.; Johnson Controls International plc.

Asia-Pacific was the largest region in the IoT in smart cities market in 2025. The regions covered in the iot in smart cities market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the iot in smart cities market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Tariffs have impacted the iot in smart cities market by increasing costs for imported sensors, communication modules, and smart infrastructure hardware. These effects are most visible in large scale deployments such as smart lighting and surveillance systems and in regions reliant on imported electronics including Asia Pacific and the Middle East. Elevated costs have slowed rollout timelines in developing cities. However, tariffs have also driven local sourcing strategies, software led city management solutions, and increased investment in domestic smart infrastructure ecosystems.

The iot in smart cities market research report is one of a series of new reports that provides iot in smart cities market statistics, including iot in smart cities industry global market size, regional shares, competitors with a iot in smart cities market share, detailed iot in smart cities market segments, market trends and opportunities, and any further data you may need to thrive in the iot in smart cities industry. This iot in smart cities market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The Internet of Things (IoT) in smart cities involves a network of physical devices, vehicles, buildings, and other objects embedded with sensors, software, and network connectivity. This network enables these entities to collect and exchange data within the geographical scope of a smart city, connecting various components of urban infrastructure to create a seamless, efficient, and smart sustainable environment.

The primary component types of IoT in smart cities are solutions and services. IoT solutions in smart cities involve the use of connected devices and sensors to gather and analyze data, aiming to enhance the efficiency, sustainability, and livability of urban environments. Various technologies, including Bluetooth, cellular networks, RFID, and others, are applied in areas such as smart building, smart healthcare, smart energy, smart transportation, public safety, smart infrastructure, and more.

The IoT in smart cities market consists of revenue earned by entities IoT services such as infrastructure management, transportation, energy management, and building automation. The market value includes the value of related goods sold by the service provider or included within the service offering. IoT in the smart cities market also includes the sale of sensors, lights, and meters to monitor and analyze data. The IoT in smart cities market also includes sales of processors, smart meters, streetlights and microcontrollers equipment which are used in providing IoT in smart cities services. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods. The IT market is segmented into IT services; computer hardware; telecom and software products.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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