There are lots of “things” that get connected to the Internet, but what makes a thing an IoT device?
The term “IoT device” is one of those terms that can be difficult to precisely define, but “you’ll know it when you see it.” However, there are some characteristics shared by most IoT devices.
IoT devices directly interact with the physical world via sensors or actuators. They might also interact with users. For example, a thermostat senses temperature and has an actuator to turn on HVAC equipment to adjust the temperature, plus it provides a display and buttons to interact with a user. Similarly, a smart speaker has a microphone to sense voice commands and a speaker (actuator) to produce audio output.
Some IoT devices are stand-alone devices that perform some specific function, such as a remotely-controlled light switch. Other IoT devices might be network-connected appliances or equipment, such as a refrigerator or computer printer.
IoT devices will provide network connections. Furthermore, without network access, IoT devices are only capable of simple manual operation, if that. However, the network does not necessarily have to be connected to the public Internet and might not even use traditional Internet protocols.
While many IoT devices are able to communicate via common wired and wireless network connections, some might instead connect to specialized networks that support their particular needs, such as low-power operation or the ability to communicate via wireless networks that better penetrate walls. The introduction of some IoT devices may consequently bring with them specialized networks with potentially new protocols. This does complicate the local ecosystem for IoT devices, potentially increasing life-cycle maintenance and security management costs.
The functionality provided by IoT devices depends on access to network services. These services are responsible for the functions performed by IoT devices, whether via user interfaces or automated actions. Often, services are required to set up an IoT device or provide user access to the functions performed by a device.
IoT devices usually do not provide a general-purpose user interface. They might have push-buttons, and maybe even a keypad, but not a keyboard. In most cases, they only have a limited display, and often just LED indicators. In the case of IoT appliances, the user interface usually provides the same knobs and displays as a traditional appliance, though perhaps more electronified. Due to user interface constraints, IoT devices often rely on apps running on smartphones to handle initial setup and configuration, and on services for operating the devices.
Useful lifetimes for IoT devices can last for decades. Users will often expect IoT devices to last as long as the legacy devices they replace. For example, if a simple light switch is replaced with a smart IoT switch in order to provide automatic operation, the expectation is that it should last as long as the switch it replaced. Similarly, appliance lifetimes are often two decades or more. However, the ability to continue using a device depends on the continued availability of any associated apps or services required to operate or maintain the device. Furthermore, if new security threats emerge affecting an IoT device, then continued use of the device may require that security fixes be provided and updates applied.
IoT Devices can add Value well beyond their Cost
The incremental cost to add IoT capabilities to appliances and equipment is modest in comparison to the overall price to acquire and deploy such systems. On the other hand, IoT capability can add significant value to appliances or equipment, and may contribute to reducing life-cycle costs. The following grid maps the functional capabilities of IoT devices against the price ranges for various types of devices or appliances found in homes or offices.

Bandwidth Requirements for IoT Devices
In general, IoT devices do not require a lot of bandwidth compared to workstations and smartphones. Video cameras, streaming TVs, and audio speakers might be exceptions, but still, the bandwidth usage tends to be less than what workstations or smartphones might utilize. As a rule of thumb, the fidelity of a user interface is a primary driver of network bandwidth. This grid examines how user interface capabilities for various types of devices correlate with bandwidth requirements.

IOT Hub Controllers
Another device type that features some IoT characteristics, but also more advanced computer capabilities, is a hub controller used to interact with and control IoT devices. There are simplistic hub controllers that might be dedicated to a particular set of IoT devices (e.g., lighting controllers or video cameras), and there are more general-purpose controllers capable of interacting with all types of IoT devices while also providing advanced, customizable user interfaces. Probably the best way to view hub controllers is that they operate in both the IoT realm and also the realm of general-purpose computers or servers.
A current market trend is that hub controllers are being integrated into other devices, such as smart speakers, tablets, smart TVs, or even network equipment. While this offers some advantages in terms of deployment costs and user accessibility, it can also result in multiple hub controllers operating at the same site. Consequently, new standards (e.g., Matter) have been defined to allow multiple hub controllers to interoperate and even share control of the same IoT devices.
IoT Device Security
With network connectivity and software-based functional capabilities, each IoT device represents some degree of security risk. Furthermore, these risks tend to grow over time as cyber threats continue to pile up. Consequently, security by design is an imperative for IoT product development. Not only will devices need to incorporate sound security practices, they must also support field-upgradeable software and firmware that can be automatically deployed as necessary. The market viability of products that incorporate IoT capabilities will come down to whether they adhere to sound security practices and support upgradability to resolve any security problems that might emerge.
Concerns for security are leading to new regulations and mandated capabilities in IoT devices. It is likely that certifications of IoT devices confirming they meet regulatory or industry-imposed requirements may become defining characteristics of IoT devices in the near future. In other words, the answer to “what’s an IoT device?” might well be determined by the certifications printed on the device packaging or stamped onto the actual device.