So we are a startup been doing most of the work on cloud and looking at moving processing on device itself, so owner of the devices don't loose functionality once we decide to move on.
But we had this question we are debating is
Do IOT devices provide real privacy of data?
I know "real" is very subjective, but if we decide otherwise. Please suggest
Any supportive studies either ways. Seems like a broad question .. but
This is way too broad. A large proportion of IoT devices are horribly insecure and also offer little in the way of privacy. So if you're talking about existing devices, then the answer to your question is no.
That doesn't mean that IoT is inherently insecure or privacy-invading, just that the vast majority of devices have chosen to make it so, undermining trust in all of it - look at all the stuff that Google and Amazon have been trying to get away with.
You can of course build your own, but when you say "once we decide to move on", it suggests that you want these devices to operate peer-to-peer without a cloud connection (i.e. when there's nobody paying for servers). This is entirely possible using things like tor and signal protocols, but it's not easy, and you're unlikely to find a comprehensive answer on Stack Overflow. You're going to need some good privacy- and security-aware developers to make that work, and they won't be cheap.