IoT Fall or Market Maturity? Insights on IoT Market Consolidation
The Internet of Things (IoT) industry has become oversaturated with the industry players in recent years. As a result, there's a very natural process of gradual market consolidation. As competition increases, some companies are consolidating their offerings to remain viable, while others are exiting the market due to lack of success and an insufficient customer base. Let's explore the actual stories of IoT players, how the changes influence the IoT market in general, and what to expect in future years.
Cumulocity’s Fresh Start
The recent announcement of Cumulocity independence from Software AG is emblematic. In 2025, Software AG reorganized its operations, forming Software GmbH, including A&N and Aris, after it was acquired by Silver Lake. This strategic change involved divesting non-core business segments, including other platforms such as StreamSets, webMethods, and TrendMiner, and now separating Cumulocity. This decission reflects a broader trend in the IoT market: companies are narrowing their focus to ensure they remain competitive in a rapidly growing but still oversaturated environment.
At the same time, Cumulocity is now an independent which centers on industrial IoT solutions, specifically the IoT management platform which is used globally across various industries.
Cumulocity’s management team, now free from the constraints of being part of a larger enterprise, is better positioned to respond to the growing demand for flexible and scalable IoT platforms. The spin-off indicates that even within the IoT sector, consolidation is occurring not only at the level of acquisitions and mergers but also through the reorientation of companies toward more concentrated areas of expertise.
u-blox Quits Cellular IoT
u-blox have struggled several years to achieve stable profit from Cellular IoT business. However, they have recently announced the decision to pivot and prioritize their Locate business over Cellular IoT modules and chipsets, which includes GNSS semiconductor solutions. These solutions are aimed at markets such as autonomous vehicles, industrial IoT, and tracking applications.
u-blox’s decision implies over $33 million elimination in annual EBIT losses. The company has chosen to concentrate its resources on the approach that could potentially strengthen the company's position in the growing location services sector, leaving behind underperforming, lower-margin cellular IoT modules. It is consolidating its product portfolio into high-demand areas, rather than putting effort into markets where competition is intense, and profitability is hard to achieve.
AT&T’s Move Away from NB-IoT
Another relevant case is AT&T's decision in 2024 to withdraw from the NB-IoT market in the United States. NB-IoT, initially referred to as a low-cost and low-power solution for massive IoT deployments, failed to gain the traction many companies expected. In the US, it is basically related to the limited coverage and inability to support global connection compared to alternative technologies like LTE-M, which in turn led AT&T to scale back its ambitions in this space.
This is another proof of a broader trend in the IoT industry - telecom providers are also consolidating their offerings around more established and effective technologies, such as LTE-M and 5G, which are seen as more adaptable and reliable for large-scale, global IoT deployments.
IoT Market Consolidation: A Sign of Maturity
The above announcements and tendencies do not show that specific IoT technologies or the industry in general are getting weak. Vice versa, it reflects the industry's growing maturity. Over the past years, IoT has changed from a rapidly growing and fragmented to a more refined and structured industry sector, where companies are reevaluating the IoT market, their own potential, competition, and profitability. The mass adoption of IoT across multiple verticals like smart cities, automotive, healthcare, and manufacturing—has led to a greater need for specialized and narrower technological solutions. As a result, many companies are adjusting their strategies to ensure they can remain relevant in the competition.
Consolidation can take many forms, from strategic divestitures and spin-offs like those seen with Cumulocity and u-blox, to shifts in business models as companies change their offerings. It is a natural consequence of market maturation, as companies evolve from broad-spectrum approaches to more specialized, niche solutions that allow them to capture higher-value markets.
“The era of undifferentiated participation in IoT is over. Companies must now hone in on specific areas of expertise, ensuring they can stand out in a more competitive and mature market landscape,” - says Fabian Kochem, Head of Global Product Strategy at 1NCE.
The departure of u-blox from cellular IoT and AT&T’s pullback from NB-IoT shows a fundamental shift in IoT: the era of broad, undifferentiated participation is waning. Companies should focus on specific areas where they can differentiate themselves and provide value. This consolidation is a necessary step to avoid fragmentation and inefficiency within the market.
What This Means for 1NCE
For companies like 1NCE, this consolidation wave presents both opportunities and challenges. On one side, the exit of large players from certain IoT sectors could create gaps that 1NCE could potentially fill, particularly in providing global IoT software and connectivity solutions. Moreover, the increasing consolidation in the market only underlines the importance of specialized, reliable, and cost-effective solutions—areas where 1NCE has positioned itself from the very beginning. 1NCE is working globally and is adaptable to almost all IoT module/modem manufacturers used by over 23,000 customers.
On the other hand, the increasing specialization of competitors means we need to stay adaptable, change, and evolve, responding to global and regional market dynamics, shifting policies, and the changing needs of our customers.1NCE success directly depends on the success of their customers. Consequently, any actions they undertake, such as modifying their products to exclude cellular connectivity, may significantly impact our own performance.
“Market consolidation eliminates confusion, enabling customers to focus on proven, specialized solutions that deliver clear value. For 1NCE, this trend reinforces our commitment to staying agile, and responsive—and we are ready to grow stronger as the market evolves,” - adds Fabian Kochem.
To Sum up
Rather than signaling the end of IoT, these recent events reflect the growing pains and requirements of an industry that is maturing. Companies are reconsidering their strategies and refocusing their business, eliminating underperforming segments, and concentrating their efforts on promising areas. The resulting consolidation of technologies, projects, and companies will likely result in a solid and efficient market of the strong players within the ecosystem.