IoT in Manufacturing Market to Experience Exponential Growth, Driven by Smart Factory Adoption and AI Integration

The IoT in Manufacturing has emerged as one of the most transformative forces in industrial operations today. From predictive maintenance to real-time data analytics, IoT technologies have become integral to the future of manufacturing. With global markets embracing smart factory initiatives and industrial automation, the IoT in Manufacturing market is poised for impressive growth in the coming decade. Estimated to be valued at USD 348.9 billion in 2025, it is projected to reach USD 1375.1 billion by 2035, with a compound annual growth rate (CAGR) of 14.7%. This significant market expansion underscores the role IoT technologies will play in reshaping the manufacturing sector.

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Key Growth Drivers: IoT and the Industry 4.0 Revolution

The market’s growth trajectory is driven by several key factors that are redefining modern manufacturing. First and foremost, the rise of smart factory initiatives is enabling manufacturers to leverage IoT solutions for real-time monitoring, predictive maintenance, and performance optimization. The integration of artificial intelligence (AI), cloud computing, and edge analytics is empowering manufacturers to streamline production processes, improve asset utilization, and minimize downtime.

Additionally, the growing demand for predictive maintenance is fueling the IoT adoption in manufacturing. With predictive capabilities, machines can identify potential issues before they cause costly downtime, thus enhancing operational efficiency and reducing maintenance costs. The global push for energy efficiency and sustainability is further bolstering IoT deployments, with governments and regulatory bodies offering support for green manufacturing initiatives.

Segmental Growth: Solutions Lead the Way

Within the IoT in Manufacturing market, solutions are expected to dominate, accounting for 54.2% of total revenue by 2025. These solutions are designed to integrate analytics, automation, and machine learning to optimize manufacturing processes in real-time. They enable manufacturers to track production performance, enhance operational efficiency, and ensure the smooth functioning of industrial operations.

Within services, network management services are projected to contribute 27.9% of the revenue by 2025. With the increasing complexity of connected systems in factories, robust network management is critical to ensuring seamless communication and reducing latency. As factories continue to deploy a growing number of IoT devices, effective network management is becoming indispensable to ensuring operational continuity.

Another service segment expected to see significant growth is managed services, which will account for 31.6% of market revenue in 2025. These services help manufacturers manage the complexity of IoT systems, outsourcing infrastructure management to service providers while allowing businesses to focus on their core operations. Managed services offer scalability, cost-effectiveness, and security—key attributes for companies looking to adopt IoT solutions without overwhelming their internal resources.

Market Outlook

The IoT in Manufacturing market is expected to witness steady growth from 2025 to 2029, driven by high demand for smart systems, improved supply chain management, and the continuous evolution of Industry 4.0 technologies. The market is anticipated to reach USD 603.9 billion by 2029, before experiencing a significant surge through to 2035, driven by further IoT-automation integrations, AI, and the expanding need for sustainability and cost-cutting measures in manufacturing.

As manufacturing processes become increasingly automated, AI-driven, and data-centric, IoT will remain central to realizing manufacturing efficiency and agility. However, the next decade also presents challenges, including the need for enhanced infrastructure, cybersecurity, and education on IoT's long-term benefits and capabilities.

Regional Insights

Geographically, North America is expected to maintain a dominant position, holding 38.5% of the global market share in 2025. The United States alone is set to account for 20.5% of the market, driven by its established industrial automation base, robust infrastructure, and strong research and development investments.

Germany and Europe, in general, will also play a crucial role in market expansion, with Germany holding 12.1% of the market share in 2025. The country's strength in automotive manufacturing, coupled with the integration of IoT and AI into industrial robotics, positions it as a leader in the European market.

Meanwhile, Asia-Pacific, driven by China and India, is emerging as a major player in the IoT in Manufacturing market. These regions are investing heavily in smart manufacturing solutions, with countries like China rapidly adopting automation technologies and IoT frameworks.

Segment Insights: Discrete Manufacturing and Automation

In terms of verticals, discrete manufacturing will continue to lead the market, accounting for 57.6% of total market share in 2025. This segment benefits from the increasing shift toward software-defined infrastructure and data-driven innovations, which enable more precise and agile production systems.

In terms of applications, automation control and management will be the top application segment, holding 19.3% of the market share by 2025. This application is integral to streamlining industrial processes, eliminating inefficiencies, and ensuring error-free production management.

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Competitive Landscape

The IoT in Manufacturing market is highly competitive, with industry giants such as Cisco, IBM, PTC, Microsoft, Siemens AG, GE, and Schneider Electric leading the charge. These companies are focusing on enhancing their IoT solutions with AI, cloud computing, and edge technologies to offer more advanced, customizable solutions.

In recent developments, IBM has partnered with ClearBlade to enhance its industrial IoT platform, offering edge solutions for real-time asset management. Similarly, Modular Capital invested in DesignX, a company focused on transforming industrial IoT solutions with edge computing capabilities.

The market players are employing a mix of organic and inorganic growth strategies, including product releases, strategic partnerships, and R&D investments, to stay ahead in this rapidly evolving market.

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