IoT has been a long time coming and the waiting game continues under 5G. Network operators, vendors, and device makers have been forcefully targeting the opportunity to connect anything anywhere for at least 15 years.

That search has gone through multiple rethinks and rebrands during that time. The simple and low-tech devices of yesteryear are still very much in play, but IoT, as it’s presented today, encompasses a wide spectrum of use cases that require features beyond baseline low-speed and low-bandwidth connectivity.

Connecting a basic appliance for remote control is relatively straightforward, but enabling fully autonomous driving or empowering physicians to conduct remote surgery is another matter entirely. Network operators and IoT software vendors haven’t done themselves any favors by putting such a wide array of connected devices under the shade of the IoT umbrella.

IoT might work from a marketing perspective, but it doesn’t allow for much delineation or meaningful considerations of the complexities at play. Nonetheless, with the arrival of 5G, operators are determined to bring IoT out of the shadows.

While the underlying architecture and features of 5G certainly expand the scope of IoT use cases, it doesn’t magically remove significant hurdles that remain. Cost, security, monitoring, and proprietary technologies pose ongoing challenges.

Industry observers agree that the outlook for IoT is up, but the trajectory of that growth and where it will be most impactful in the near term are largely up for debate. To understand why IoT hasn’t reached a level of ubiquity that seemed like a foregone conclusion a decade ago, it’s worth taking a step back to reflect on the issues that have obstructed its growth in a world of otherwise rapidly advancing adoption.

“One of the main culprits has been the overly ambitious near-term projections, reflecting to some degree the difficulty of envisioning how the technology will proliferate and generate value across a wide range of industries and use cases,” said Stefan Pongratz, VP at Dell’Oro Group. “We are trying to fit everything under one umbrella when the technology requirements, business case, and the adoption curve for connected sheep in Scandinavia and connected cars in the United States have little in common. It took some time for the industry to transition from this high level IoT view to providing the right technology framework for addressing the extreme variations in the end-user requirements.”

However, Pongratz argues that progress during the last three years on standards, capabilities, use cases, and the broader ecosystem for low-power cellular IoT technologies has developed at a much faster pace than many expected. Indeed, many operators have launched nationwide networks for narrowband IoT (NB-IoT) and LTE for machines (LTE-M) during that period.

IoT’s full advance has been stunted because “developers consistently underestimate the difficulty of designing, building, securing, and managing IoT solutions,” said Bill Curtis, resident analyst at Moor Insights & Strategy.

“IoT isn’t a boxed product that you can buy from a single vendor,” he explained. “It’s like a big toolbox — a loosely defined set of horizontal technologies that can be assembled into vertical applications. Today, the assembly process takes way too much expertise and coding. Therefore, very few IoT projects deliver on their promises.”

Costs are also a pervasive and unwavering problem. “The cost is high because most device-side code, particularly for low-power devices, is still developed using specialized embedded techniques that are quite different from mainstream enterprise development,” he said, adding that the market is desperate for mature and mainstream IoT operating systems to emerge.

“Ultimately, the extreme IoT device software diversity that we see today will consolidate down to a much smaller number of mainstream ecosystems that are readily programmable by enterprise developers and just work right out of the box,” Curtis added.

5G presents new opportunities for IoT, but it doesn’t singlehandedly overcome its foundational challenges. Network slicing, increases in spectral efficiency, and quality of service guarantees are positive developments made possible by 5G. But “IoT is a B2B application and users just want to get actionable data from their sensors and not worry about whether it’s old data or unreliable data,” said Anshel Sag, analyst at Moor Insights & Strategy.

“I think 5G changes this dynamic significantly over the long term by standardizing and simplifying the experience and interactions, and possibly engaging more of the industry to help solve IoT’s problems but also improve the total experience,” he said.

While 5G will accelerate the growth of IoT, especially in applications for transportation, smart cities, health care, and agriculture, it is no panacea, according to Curtis. “The growth trajectory of IoT will still be limited by the inherent complexity of solution development, particularly where embedded application code for devices is required,” he said.

Pongratz agrees that 5G will play an extremely important role in supporting IoT segments over the long term, but capabilities in place today already fulfill massive machine type communications (mMTC). “The 5G mMTC vision assumes the network will support up to a million devices per square kilometer, but the average cell for the hypothetical scenario with every macro cell upgraded to support critical IoT today does not even have 100 IoT connections today,” he said.

The levels of growth that IoT will experience in the next few years and the extent to which it will fuel new revenue streams for operators, vendors, and other players, is muted, according to analyst projections.

Dell’Oro Group forecasts that 5G new radio (NR) based IoT connections — including massive, broadband, and critical IoT — will account for a low single-digit share of the overall 2023 connections installed based. “At the same time, it is highly probably the value of the 5G connections will significantly outpace the average LTE-based connection, so from an operator perspective the potential revenue upside will likely be 3x to 4x per connection relative to the LTE baseline,” Pongratz said.

Overall, IoT is projected to account for around 3% of total mobile operator revenues by 2023, according to Dell’Oro Group. That reflects an 18% compound annual growth rate (CAGR) in cellular-based IoT revenues, reaching $32.6 billion in 2023.

“We do believe that IoT represents a tremendous opportunity over the long term for operators to expand their revenues both by reaching new customers and by moving up the value chain,” however, Pongratz adds, “the impact over the near term will be more muted.”

There is still a tangible upside with IoT during the next few years for suppliers and operators, he said. “While the revenue upside might not be as material as some envisioned 10 years ago, the business case … will remain rather favorable since operators will for the most part be able to utilize their existing LTE and NR networks.”

The firm also recently revised its projections slightly upward for IoT-related revenue for radio access network (RAN) and core vendors. Wide-area IoT applications, including cellular and non-cellular equipment, is expected to add $1.6 billion to the overall mobile infrastructure market, accounting for roughly 4% of the entire market, by 2023, according to Dell’Oro Group.

Meanwhile, the makers of modules that power IoT devices stand to benefit more accentuated growth, at least on a percentage basis, in the coming years, according to Strategy Analytics. 5G-capable IoT modules will dominate cellular IoT device sales by 2023, as global IoT module sales near 350 million by 2025, the firm predicts.

However, when 5G captures the majority of that market, IoT module sales are projected to be flat or dip slightly starting in 2023, according to Strategy Analytics. The firm also expects the automotive segment to be the largest consumer of cellular IoT models during the next five years.

5G has arrived and will continue to reach more places next year, but it’s not going to propel the IoT market by a considerable measure any time soon. Ample growth will come later and that shouldn’t be a surprise to anyone who’s followed this space for the last decade or longer.

“I don’t think 2020 will necessarily be a watershed moment for IoT, but I do believe that the decade that 2020 starts will see significant changes thanks to 5G, including IoT,” Sag said.

Key trends that preclude IoT from scaling at a faster pace are long term and gradual improvements being made on an annual basis, explains Curtis. There is no “silver bullet that will remove scaling barriers,” he said. “The key is to start building IoT devices with broadly adopted operating systems, built-in security all the way down to the silicon, verifiable and updatable firmware, and mainstream application development tooling.”