Internet of Things (IoT) Security Market Analysis & Forecast: 2025-2032

Internet of Things (IoT) Security Market Size and Forecast – 2025 – 2032

The Internet of Things (IoT) Security Market size is estimated to be valued at USD 29.85 billion in 2025 and is expected to reach USD 87.31 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 17.9% from 2025 to 2032.

Global Internet of Things (IoT) Security Market Overview

Internet of Things (IoT) is an ecosystem of connected physical objects that are accessible through the Internet. Internet of Things (IoT) involves creation of smart communication environment between smart homes, smart transportation, and smart healthcare systems with the help of several devices in a network that enables transmission of data within these devices such as WSN (Wireless Sensor Network), RFID (Radio Frequency Identification), cloud services, NFC (Near Field Communication), gateways, data storage & analytics, and visualization elements. Moreover, embedded software, hardware devices, IT services, and communication services are interconnected with IoT for monitoring, detecting, prevention of unauthorized access, and managing numerous interrelated devices, efficiently.

Advancement in technologies and increasing use of 2G, 3G, and 4G Long-Term Evolution (LTE) wireless networks have in turn also made these networks increasingly susceptibility to cyber-attacks. These cellular networks enable connectivity and communications to exchange real time information, data, and online transactions among others, which is prominent target for cyber-attacks. For the security and flexibility of these online communication IoT security solution plays a major role. According to Coherent Market Insights’ analysis, over 88% of the U.S. population had access to the Internet, which is around 280 million of the U.S. population. Smart home solutions aid in remotely accessing devices at home including security systems. Therefore, it is important to have IoT security solutions in order to enhance security.

Increasing smart city initiatives, globally, is also another factor expected to fuel market growth. For instance, Government of India launched "100 Smart Cities Mission". Some of the important elements in smart city initiatives involve digitalization and deploying Wi-Fi hotspots at various locations. Public Wi-Fi network do not provide security and use shared passwords. Hence, this facility is prone to cyber-attacks. Therefore, IoT security helps to enhance the security through a unique technology called ‘User Pre-Shared Key’ (UPSK) for every device within the network to ensure device security. Such features of IoT security are expected to fuel growth of the global IoT market. 

Key Takeaways

• The Network Security segment holds the largest share, accounting for approximately 38% of the market, driven by its critical role in securing interconnected devices and data transmission channels.

• The Automotive industry dominates the end-use segment with 28% market share, driven by the heightened need to protect connected vehicles and autonomous driving systems.

• Regionally, North America commands the largest market share of approximately 42%, fueled by strong governmental regulations and high adoption of IoT across verticals. Asia Pacific exhibits the fastest CAGR, propelled by rapid industrialization, government initiatives promoting IoT adoption, and growing cybersecurity investments, especially in China and India’s smart city projects.

Internet of Things (IoT) Security Market – Segmentation Analysis

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Internet of Things (IoT) Security Market Insights, By Component

In terms of Component, hardware security modules dominate the market share at 32%. This domination is primarily driven by the increasing need for physically tamper-resistant devices that secure cryptographic keys and sensitive operations, especially in sectors requiring high assurance such as finance and healthcare. Growth factors include the rising number of cyber threats, stringent data privacy regulations, and the expansion of cloud services integrated with IoT technologies.

Internet of Things (IoT) Security Market Insights, By Security Type

In the Security Type segment, network security as the dominating sub segment, representing 38% of the market share. Its critical role in preventing intrusion and securing communication channels places it at the forefront of IoT defense strategies. This segment involves solutions such as encryption, authentication protocols, firewall integration, and intrusion detection systems to monitor and filter network traffic, ensuring the integrity and privacy of data transmitted across interconnected devices.

Internet of Things (IoT) Security Market Insights, By End-Use Industry

By End-Use Industry, automotive dominating the market share at 28%. This leadership arises from the increased integration of connected vehicle systems, autonomous driving, and telematics requiring high-level cybersecurity. The growing number of electric and driverless cars, which mostly depend on secure software and communications, is also helping the automotive IoT security market.

Internet of Things (IoT) Security Market Trends

• The IoT Security market is witnessing a paradigm shift fueled by advancements in quantum-resistant cryptography and distributed ledger technologies, primarily adopted in sensitive sectors like healthcare and defense. Moreover, the convergence of IoT with 5G networks introduces new security challenges, prompting security augments such as network slicing security and edge firewall deployment.

• The rapid adoption of Zero Trust frameworks reflects enterprises’ shift from traditional perimeter security towards continuous verification models. Increasing focus on privacy-preserving IoT security solutions also aligns with the growing concern around data protection and consumer trust. In 2024, enterprises deploying integrated IoT security and privacy platforms reported a 38% improvement in compliance adherence and reduced breach incidents.

Internet of Things (IoT) Security Market Insights, By Geography

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North America Internet of Things (IoT) Security Market Analysis and Trends

Strong government regulations pertaining to IoT cybersecurity, widespread industrial IoT use, and large investments by top U.S.-based firms are the main reasons for North America's market supremacy in IoT security. Due to federal cybersecurity regulations and the support of tech companies, this area accounts for about 42% of the worldwide market. Its dominant position is further accelerated by the existence of significant competitors providing cutting-edge AI-powered IoT security solutions.

Asia Pacific Internet of Things (IoT) Security Market Analysis and Trends

Asia Pacific, on the other hand, is growing at the quickest rate, with a CAGR of more than 20%. Rapid digital transformation in China and India, supported by national IoT plans and large-scale smart city projects, is driving this rapid expansion. The demand for IoT security solutions is being driven by the expanding ecosystem of IoT companies, as well as increased cybersecurity investments and awareness in industries like manufacturing and healthcare.

Internet of Things (IoT) Security Market Outlook for Key Countries

United States Internet of Things (IoT) Security Market Analysis and Trends

The USA market plays a pivotal role, accounting for a significant portion of North America’s dominance. In 2024, government agencies introduced enhanced IoT cybersecurity frameworks targeting critical infrastructure sectors, leading to a 22% increase in IoT security spending by federal and commercial entities. Companies like Cisco and Palo Alto Networks pioneered AI-driven threat detection frameworks in major smart city deployments across California and New York, reducing cyber incident response time by nearly 30%. The vibrant startup ecosystem focused on quantum-resistant security solutions augments overall industry innovation and business growth.

China Internet of Things (IoT) Security Market Analysis and Trends

China’s IoT Security market has gained remarkable momentum due to aggressive implementation of the National IoT Development Plan and heavy investments in smart manufacturing. Leading domestic companies and global entities have collaborated in launching secure IoT platforms tailored to industrial sectors, increasing industrial IoT security adoption by over 35% in 2025. Government incentives encouraging cybersecurity compliance and data sovereignty have resulted in faster uptake of secure device onboarding and blockchain-powered authentication protocols, enhancing China’s position as the fastest-growing IoT security market globally.

Analyst Opinion

• Expanding Deployment of Edge Computing Poses New Security Challenges: The proliferation of edge computing in IoT architectures demands advanced security measures close to data sources. Recent deployments in industries like manufacturing and healthcare witnessed a 40% increase in edge device installations in 2024 alone. This growth magnifies the attack surface, necessitating adaptive encryption protocols and real-time threat detection. For instance, a leading automotive manufacturer reported a 30% reduction in cyber incidents after integrating edge-level IoT security in 2024.

• Increased Integration of AI-Driven Security Solutions Enhances Threat Prediction: Artificial Intelligence (AI) and Machine Learning (ML)-based anomaly detection have become pivotal in combating evolving cyber threats. In 2025, enterprises incorporating AI-enabled IoT security platforms observed over 25% faster identification of potential threats compared to traditional systems. This trend is particularly visible within smart city projects which processed over 15 billion IoT security alerts automatically last year.

• Regulatory Framework Intensification Drives Market Growth: Governments and regulatory bodies across North America and Europe introduced stringent data protection policies in 2024, accelerating demand for compliance-focused IoT security products. For example, the introduction of enhanced cybersecurity mandates for critical infrastructure in the U.S. resulted in a 22% jump in IoT security investments in public sectors during 2025.

• Rising Adoption of Zero Trust Architecture in IoT Ecosystems: Industry adoption of Zero Trust security models within IoT networks has gained considerable momentum. Studies show that organizations implementing Zero Trust experience 50% fewer data breaches linked to IoT vulnerabilities. This security paradigm shift is notably prevalent in sectors like finance and healthcare where sensitive IoT device data integrity is crucial.

Market Scope

Internet of Things (IoT) Security Market Growth factors

The exponential increase in connected IoT devices fuels the demand for enhanced security solutions, with Gartner reporting that connected devices will exceed 50 billion globally by 2025. This growth necessitates scalable security architectures adaptable to varying device capabilities. Rising cyber threats, including ransomware and DDoS attacks targeting IoT infrastructure, have spurred significant investments in robust cybersecurity frameworks.

Advanced government regulations aimed at protecting critical infrastructure have encouraged enterprises to prioritize compliance-driven IoT security spending, evident in 21% year-over-year growth in regulated sectors last year. Furthermore, the integration of AI and blockchain with IoT security is accelerating solution effectiveness, improving threat identification and network resilience. For instance, blockchain applications are increasingly employed to ensure device authenticity and data integrity in real-time.

Internet of Things (IoT) Security Market Development

• In September 2025, the U.S. government launched a bold initiative to develop a cybersecurity seal of approval for Internet-of-things devices, but the same organization that developed it is posing a significant threat to the endeavor. The U.S. Cyber Trust Mark program was introduced by the Federal Communications Commission during the Biden administration with great fanfare.

• In February 2025, the world's first fully integrated security solution for cellular IoT, Aeris IoT Watchtower, was introduced by Aeris, a company that contributes to secure cellular IoT platforms and solutions. In order to avoid IoT security breaches, lessen the impact of any IoT security event, increase operational efficiency, and guarantee regulatory compliance, Aeris IoT Watchtower provides enterprise IoT visibility and control.

• In January 2025, the US has introduced a Cyber Trust Mark. Manufacturers of consumer smart devices that meet the requirements for the Cyber Trust Mark will soon be able to use a unique, trademarked shield logo on their goods.

Key Players

• Cisco Systems Inc.

• Palo Alto Networks

• IBM Corporation

• Fortinet Inc.

• Check Point Software Technologies

• Trend Micro Incorporated

• McAfee LLC

• Sophos Ltd

• Aruba Networks

• Darktrace

Competitive strategies revolve largely around innovation in AI-powered threat detection and comprehensive IoT security integration across client networks. For example, Cisco Systems partnered with leading automotive manufacturers in 2024 to deploy tailored IoT security solutions, which helped increase secure device onboarding by 35%. Similarly, IBM has focused on developing blockchain-based IoT security protocols, which resulted in a 28% improvement in secure data exchange reliability across industrial IoT applications.

Internet of Things (IoT) Security Market Future Outlook

The future perspective for the Internet of Things (IoT) Security Market will envision an increasingly complex threat landscape with sophisticated cyberattacks that will leverage AI and machine learning. IoT security will prioritize AI-powered threat detection, zero trust architectures, and advanced encryption methods to protect expanding device networks. Regulatory frameworks like the EU Cyber Resilience Act and UK Product Security Regulations will shape mandatory security practices.

Industries such as healthcare, manufacturing, and energy will require tailored IoT security solutions due to their unique vulnerabilities. Emerging technologies like blockchain will enhance data integrity and secure device-to-device communication. Additionally, the integration of 5G and edge computing will support scalable, low-latency IoT deployments while increasing security challenges. Overall, securing IoT ecosystems will be essential for operational continuity, data protection, and compliance as IoT adoption will expand across sectors. This evolving landscape will necessitate proactive, adaptable security strategies to counter rising risks effectively.

Historical Development

• For instance, in 2015, Government of India launched "100 Smart Cities Mission". Some of the important elements in smart city initiatives involved digitalization and deployed Wi-Fi hotspots at various locations. Public Wi-Fi networks did not provide security and used shared passwords. Hence, this facility was prone to cyber-attacks. Therefore, IoT security helped to enhance the security through a unique technology called ‘User Pre-Shared Key’ (UPSK) for every device within the network to ensure device security. Such features of IoT security were expected to fuel the global IoT market growth.

Sources

• Primary Research interviews:

• Cloud service providers (AWS, Azure, Google Cloud)

• Cybersecurity solution architects

• Telecom operators (5G/IoT connectivity)

• Databases:

• Statista

• ProQuest Technology Collection

• ScienceDirect

• Magazines:

• CSO Online

• Infosecurity Magazine

• Dark Reading

• Journals:

• Computers & Security

• ACM Transactions on Privacy and Security

• International Journal of Information Security

• Newspapers:

• Financial Times (Technology section)

• The Guardian (Technology)

• The Economic Times (Tech)

• Associations:

• Information Systems Audit and Control Association (ISACA)

• Institute of Electrical and Electronics Engineers (IEEE)

• National Institute of Standards and Technology (NIST)