According to Counterpoint’s Global Cellular IoT Connections Tracker report, global cellular IoT connections witnessed a robust growth of 29% YoY, reaching 2.7 billion in 2022. These connections are expected to maintain a steady compound annual growth rate (CAGR) of 10.8% and exceed 6 billion by the year 2030. China emerged as the leader in total cellular IoT connections, followed by Europe and North America.
In the face of challenges such as inflation, macroeconomic headwinds, and supply chain constraints, the cellular IoT market has experienced impressive expansion, largely driven by the digital transformation initiatives implemented in various sectors, including smart meters, automobiles, and asset tracking. Cellular IoT connectivity has proven instrumental in enhancing productivity, streamlining operations, minimizing downtime, automating processes, and generating cost savings across industries. Interestingly, the COVID-19 pandemic unexpectedly accelerated the digital transformation efforts of enterprise IoT players.
Commenting on the dynamics of cellular IoT connectivity technology, Senior Research Analyst Soumen Mandal stated that by the end of 2022, 4G and NB-IoT together accounted for nearly 90% of the installed base of cellular IoT connections. Following its surpassing of 2G and 3G-based IoT connections in 2016, 4G has become the preferred technology for cellular IoT connections. In China, NB-IoT has gained significant popularity, while LTE-M is preferred in Japan, Australia, and North America. Europe has adopted a combination of NB-IoT and LTE-M technologies, supported by roaming services offered by most operators.
Recently, the superior performance of 4G Cat 1 bis technology has led to its increased popularity over NB-IoT. Applications such as point-of-sale (POS), telematics, and smart meters are increasingly adopting this technology on a larger scale. Consequently, the growing shipments of devices based on 4G Cat 1 and 4G Cat 1 bis technologies have resulted in stagnant market growth for NB-IoT.
Although still in its early stages, 5G is expected to gain traction as module average selling prices (ASPs) decrease to below $100 and more 5G RedCap-based solutions become available in the market. The introduction of 5G RedCap and 5G eRedCap will play a crucial role in driving the mass adoption of 5G, particularly in developing and underdeveloped countries.
Market Outlook:
Research Vice President Neil Shah predicts that the global cellular IoT connections installed base will surpass 6 billion by 2030, fueled by a CAGR of 10.8%. This growth will primarily be driven by the widespread adoption of cellular connectivity across various sectors, including utilities, automotive, industrial, retail, and healthcare. Unlike the previous decade, where consumer devices like smartphones and PCs played a significant role in driving cellular connections, this decade will witness a shift toward cellular connections propelled by the digital transformation initiatives of enterprise IoT players. The increasing adoption of cellular connectivity will also lead to a further reduction in prices for cellular-connected devices, making them more competitive against alternative non-cellular connectivity technologies such as LoRa, Sigfox, and Wi-SUN.
The past year has witnessed several consolidations within the cellular IoT industry, including Telit’s acquisition of Thales’ cellular IoT business, Semtech’s acquisition of Sierra Wireless, and Aeris Communications’ acquisition of Ericsson’s IoT accelerator and connected vehicle cloud business. As the cellular module market continues to mature, further consolidations can be expected, aimed at providing improved solutions and maintaining competitiveness against other non-cellular connectivity technologies.
