The Internet of Things (IoT) is a network of physical devices embedded with sensors, microcontrollers, and wireless connectivity that collect, process, and exchange data without human intervention. An IoT system typically consists of four layers: the device layer (sensors + MCU), the connectivity layer (wireless protocol), the platform layer (cloud/edge processing), and the application layer (dashboards, alerts, automation).
As of 2025, there are an estimated 18.8 billion IoT connections globally (IoT Analytics), with the fastest growth in industrial IoT (IIoT), smart buildings, and connected health.
How Does an IoT Device Actually Work?
At the hardware level, a typical IoT sensor node consists of:
- Sensor(s) — Temperature (±0.1°C, e.g., TI TMP117), humidity, pressure, motion, light, or application-specific transducers
- Microcontroller — Low-power processor (e.g., STM32L4 at 80 MHz, 1.7 µA in stop mode) that reads sensor data, runs local logic, and manages power
- Wireless module — BLE, LoRaWAN, NB-IoT, Wi-Fi, or Thread radio for data transmission
- Power source — Battery (CR2032, 2×AAA, LiPo), energy harvesting (solar, thermal), or wired power
The MCU wakes periodically (e.g., every 15 minutes), reads sensor data, optionally runs local processing (thresholds, filtering, ML inference), transmits a compact data packet (typically 10–50 bytes), and returns to deep sleep to conserve power.
Choosing the Right Connectivity Protocol
The choice of wireless protocol is the most consequential architecture decision in IoT design:
| Protocol | Range | Data Rate | Power | Battery Life | Monthly Cost | Best For |
|---|---|---|---|---|---|---|
| BLE 5.3 | 100 m | 2 Mbps | Ultra-low | 2–5 years | €0 (no subscription) | Wearables, proximity, asset tags |
| LoRaWAN | 2–15 km | 0.3–50 kbps | Very low | 5–10 years | €0.5–2/device | Environmental monitoring, agriculture, metering |
| NB-IoT | Cellular | 250 kbps | Low | 3–5 years | €1–5/device | Wide-area tracking, remote assets |
| LTE-M | Cellular | 1 Mbps | Low–Medium | 2–4 years | €2–5/device | Mobile assets, voice, higher throughput |
| Wi-Fi 6 | 50 m | 1.2 Gbps | Medium–High | Wired/short | €0 | Cameras, gateways, high-bandwidth |
| Thread/Matter | 30 m mesh | 250 kbps | Low | 2–5 years | €0 | Smart home, building automation |
| 5G RedCap | Cellular | 150 Mbps | Medium | 1–3 years | €5–10/device | Industrial IoT, video, AR |
Rule of thumb: If you need multi-kilometer range with battery life >5 years, choose LoRaWAN. If you need cellular coverage without deploying infrastructure, choose NB-IoT. If you need high bandwidth and have power available, choose Wi-Fi.
IoT Application Protocols
Once data reaches a gateway or cloud endpoint, application-layer protocols handle message routing:
- MQTT (Message Queuing Telemetry Transport) — Publish/subscribe pattern, lightweight (2-byte header), ideal for constrained devices. Used by AWS IoT Core, Azure IoT Hub, and most IoT platforms
- CoAP (Constrained Application Protocol) — REST-like request/response over UDP, designed for extremely constrained devices and lossy networks
- LwM2M (Lightweight M2M) — OMA standard for device management, firmware OTA, and telemetry on resource-constrained devices
- HTTP/REST — Standard web APIs for unconstrained gateways and edge devices with sufficient resources
What Industries Benefit Most?
| Industry | IoT Application | Typical ROI |
|---|---|---|
| Smart Buildings | Occupancy sensing, HVAC optimization, energy monitoring | 15–30% energy cost reduction |
| Agriculture | Soil moisture, weather stations, irrigation automation | 20–40% water savings |
| Logistics | Asset tracking, cold chain monitoring, fleet telematics | 10–25% fuel savings, 99.5% shipment visibility |
| Manufacturing (IIoT) | Predictive maintenance, OEE monitoring, quality inspection | 15–30% reduction in unplanned downtime |
| Smart Cities | Waste bin fill level, parking occupancy, air quality | 30–50% collection cost reduction |
| Healthcare | Remote patient monitoring, asset tracking, environmental compliance | Reduced readmissions, regulatory compliance |
IoT Security: The Non-Negotiable Layer
IoT security is a regulatory requirement, not an option. The EU Cyber Resilience Act (EU 2024/2847) mandates that all connected products sold in the EU must implement:
- Secure boot — Cryptographic verification of firmware at every startup
- Authenticated OTA updates — Signed firmware packages with rollback protection
- Unique device identity — Per-device credentials, no shared secrets or default passwords
- Vulnerability management — Documented process for handling and disclosing security vulnerabilities throughout the product lifecycle
Hardware-rooted security (Secure Elements like NXP SE050, Infineon OPTIGA Trust M) provides tamper-resistant key storage that software-only solutions cannot match.
The Scale of IoT
The numbers are significant: IoT Analytics projects 29+ billion connected devices by 2027. But raw device count is less important than the data these devices generate. A single industrial sensor transmitting a 20-byte packet every 10 seconds generates 63 MB/year — multiply by thousands of sensors, and the data management challenge becomes clear.
This is why edge computing and Edge AI are becoming essential: processing data locally reduces bandwidth, latency, and cloud costs, while improving privacy and reliability.
At Inovasense, we’ve built IoT products from the silicon up — including our NB-IoT Postbox Sensor deployed across European postal networks. We handle everything from sensor selection and PCB design through firmware, cloud integration, and CE certification. Contact us to discuss your IoT project.