Top 5 IoT Challenges to Watch in 2016 – Security, Standards, Strategy, Consumer Apps, Startups

2015 marked a turning point for the Internet of Things (IoT). Major corporations across the globe rolled out formal IoT strategies, signaling the technology’s transition from niche to mainstream. As 2016 approaches, the industry faces a new set of critical hurdles that will shape its trajectory.

1. Security

High‑profile breaches—such as Target’s 2014 incident, which traced back to a connected HVAC vendor—underscore the urgency of robust security. Rapid product development often eclipses data protection, leaving devices vulnerable to exploitation. Cybercriminals now target Wi‑Fi–connected devices to infiltrate corporate networks without physical access. In 2016, we anticipate at least one or two major security incidents, reinforcing security as the top IoT challenge.

See also: How to Mitigate IoT Security Challenges in Development

2. Standardization

As 2G networks phase out, developers must transition to newer platforms—a labor‑intensive and costly process. Cellular operators are debating the next M2M standard, with LTE‑M and LTE‑NB emerging as contenders, though commercial adoption is unlikely until 2018. Low‑power wide‑area networks (LPWAN) also fragment the market, with Sigfox, Ingenu, LoRa Alliance, Weightless, and Link Labs (Symphony Link) each proposing distinct protocols. 2016 will likely see some of these technologies consolidate while others falter.

3. IoT Strategy

Large enterprises still lack clear IoT roadmaps. Giants like Cisco, IBM, Microsoft, Google, Apple, AT&T, Verizon, and Orange are investing heavily to carve out niche roles. Success hinges on aligning product offerings with genuine customer needs; misaligned strategies risk obsolescence.

4. Disruptive Consumer Applications

While industrial and enterprise IoT have delivered operational gains, consumer‑facing devices have yet to produce a true market‑shaker—beyond the hype surrounding Apple Watch. In 2016, we expect several companies to focus on core consumer pain points, aiming to launch disruptive IoT products that resonate with everyday users.

5. Startup Challenges

The IoT startup ecosystem faces the “valley of death” as hype cools and funding tightens. Many firms that once raised capital with ease will now need to demonstrate clear value. We foresee a wave of acquisitions by larger players seeking IoT expertise and a number of startups shutting down due to failure to scale.

Conclusion

2016 will be a year of reckoning. While the IoT market remains vast—with potential billions of connected devices—only those who navigate security, standardization, strategic clarity, consumer relevance, and sustainable growth will thrive.