According to Counterpoint Research’s IoT (Internet of Things) service, Global IoT Cellular Connection grew 72 % in 2018, a considerable increase from the same period last year. As per Counterpoint Research, smart manufacturing, smart utilities and smart mobility applications such as automotive, asset tracking will be the key growth drivers over the next five to seven years. Many of these applications will demand low-power, low-bandwidth, low-cost and ubiquitous cellular connectivity which will be initially satisfied by the emerging Low Power Wide Area Network (LPWAN) cellular technologies like LTE-M, NB-IoT, and EC-GSM-IoT. Further, futuristic applications such as autonomous cars, drones, connected healthcare, and mission-critical IoT applications will be powered by the upcoming 5G technology revolution which promises massive capacities, throughputs, and lower latencies.
Exhibit 1: Global Cellular IoT Cellular Connection market share in 1H 2018 vs. 2025
Source: Counterpoint Research: 2010-2025 Global IoT Cellular Connection Tracker
Highlighting the latest trends in IoT connectivity strategies, Counterpoint Research’s Research Director, Neil Shah says, “Revenue generation from the IoT ecosystem is not siloed to any one specific segment of the value chain, rather it is distributed among all segments. On an average for a cellular IoT solution deployment, connectivity represents around 12%, whereas hardware components, modules and devices represent 22%. The rest of the bulk of the value in an IoT solution is captured by system integrators, middleware, software platforms and cloud analytics vendors. Hence, if operators are looking to capture maximum value, the strategies need to provide an end-to-end IoT solutions by bundling IoT devices, secure connectivity, platform and data management to capitalize on the overall opportunity.
Some bigger operators have already chosen specific IoT solutions and verticals to offer a comprehensive IoT solution, but it won’t be practical for operator to offer similar end-to-end solutions across every vertical and hence partnerships across the IoT value chain will be the key to capture value.”
Exhibit 2: Global IoT Cellular Connection by Technology Market Share in 1H 2018 vs 2025
Source: Counterpoint Research: 2010-2025 Global IoT Cellular Connection Tracker
IoT Connectivity by Technology Market Analysis – By-2025
- 2G IoT connections will occupy less than 1% of global IoT cellular connections by 2025; increasingly being replaced by NB-IoT.
- 3G IoT connections face the same fate as 2G. However, 3G will go extinct much faster than 2G.
- 4G LTE IoT connections (high bandwidth & low latency) will grow at a much faster rate till 2022 due to global adoption of LTE Advanced and Advanced Pro. However, post-2022 we expect a smooth transition from 4G LTE family to 5G. 4G LTE IoT connections will hold slightly more than a third of global IoT cellular connections in 2025.
- LTE-M Connection will have a presence until 2022. However, we expect its growth to be limited as both NB-IoT and unlicensed LPWA will take away its opportunity and share. LTE-M connections will be around 6% of global IoT cellular connections in 2025.
- NB-IoT will dominate the market with 45% of global IoT cellular connections, due to the wide variety of application opportunities and faster adoption rates in the overall ecosystem.
- 5G will be crucial for some sectors, for example automotive, especially for V2V and V2X. The adoption of 5G cellular will depend on the availability, cost of modems from companies like Qualcomm and Huawei as well as coverage area. We expect 5G to account for around 10% of global IoT cellular connections in 2025.
For more info, visit Counterpoint Technology Market Research.