Coverage: Cellular Tracker &amp; Forecasts

5 Billion IoT Cellular Module Will Ship Globally During 2019-2025. 4G, LTE Cat-M & NB-IoT in Hyper-Growth

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

Jan 8^th, 2019

Top three players, Chinese vendor SIMCom (Sunsea AIoT), Quectel Wireless and Canadian vendor Sierra Wireless will take centre stage by competing neck to neck in volumes. However, Sierra Wireless still leads in revenue. Moving forward, 4G, LTE-M, and NB-IoT will be key volume drivers.

According to the latest research from Counterpoint’s IoT (Internet of Things) Service, global cellular IoT module shipments will grow by 79% YoY in 2018 driven by Low Power Wireless Access (LPWA) IoT applications. These applications include connected bikes, smart meters, smoke detectors, livestock etc.

Commenting on the competitive landscape in the cellular IoT module segment, Counterpoint Research Analyst, Satyajit Sinha, noted, “Unlike smartphones, the things or devices are being connected to the internet by integrating wireless IoT modules. These IoT modules which embed cellular capability have changed the entire IoT landscape by adding long-range, secure and scalable wireless connectivity. The IoT module industry has evolved a lot in the last year. The market which was once dominated by integrating low-cost 2G connectivity started transitioning to Cellular LPWA (dominated by NB-IoT) on one end and from 3G to 4G LTE/5G for higher bandwidth applications such as connected car, smart surveillance camera, etc.

The IoT cellular module market had been dominated by two suppliers, China-based SIMCom and Canada base Sierra Wireless. However, over the last 20 months, another low-cost Chinese module supplier, Quectel has grown swiftly capturing the second spot by IoT module shipments in 2018 surpassing Sierra Wireless. However, from an IoT module shipment revenue perspective, Sierra Wireless remains the market leader. However, the rise of LPWA technology such NB-IoT with growing scale in the market such as China, 2018 saw the rise of long-tail IoT module suppliers in China such as Neoway, Fibocom, Gosuncn, Lierda, Rinlink, and Yuge.”

Exhibit 1: Global Cellular IoT Module Shipments market share by Volume in 2018E

Source: Global IoT Cellular Module Tracker by Tech, by App: 2009-2025

Mr. Sinha, further added, “IoT System-on-chip (Soc)/System- in- package (SiP), where MCU is integrated with modem/baseband will be the next wave of IoT evolution and it will change the dynamics of the IoT module market. This is mainly driven by semiconductor players like Huawei, GCT, Qualcomm, MediaTek, Sequans, Nordic, Altair, etc. The player like Huawei is looking to drive NB-IoT SoCs to sub-dollar price points for example with Boudica series.”

Adding his perspective, Senior Analyst, Hanish Bhatia noted, “According to our research, global IoT cellular connections are slated to cross 5 billion bark by 2025 and NB-IoT is to contribute to nearly half. In 2018, we saw some of the cellular LPWA applications deployment adopting either LTE-M or NB-IoT depending on geography and respective operators’ LPWA network strategy. Ideally, for cost perspective, many of these applications would have been deployed cheaper NB-IoT solutions. This is being realized by some of the western operators which deployed LTE-M initially and now looking at the NB-IoT revolution in China and are adding NB-IoT to their IoT network strategy roadmap.”

Mr. Bhatia, further added, “Additionally, some operators have deployed hybrid wireless IoT networks with both licensed and unlicensed LPWA technologies such as NB-IoT/LTE-M and LoRa/Sigfox respectively. Cost and the ease of deployment using an unlicensed band are the key benefits for adopting LoRa/Sigfox technologies.”

Commenting on the latest trends of IoT module vendors, Senior Analyst, Ethan Qi, added, “Selling IoT module hardware alone is not enough anymore for the suppliers to survive. Companies like Sierra Wireless, Gemalto have benefited from bundling the modules with IoT solution integration /support services, middleware, software platform, application development toolkits, cloud platform, analytics, and end-to-end security. Even the low-cost Chinese suppliers such as SUNSEA AIoT (SIMCom+Longsun) entered into a strategic partnership with Ayla Networks to provide a cloud base IoT module. We believe this is the path to go to remain the market leader in IoT and capture maximum value across the IoT value chain.”

Exhibit 2: Global Cellular IoT Module Shipments market share by Revenue in 2018E

Source: Global IoT Cellular Module Tracker by Tech, by App: 2009-2025

Looking at future deployments, Mr Qi, added, “Industry is moving towards intelligent /smart modules always securely connected to the cloud, leveraging cloud computing. However, we will also see the increasing adoption of intelligence at the edge which is at the module level, leveraging AI driven edge computing capabilities. This edge computing is driven by top cloud computing players such as Google, Microsoft, Amazon, FogHorn, and others closely working with the number of semiconductor and module vendors such as ST-Micro, NXP, Qualcomm, silicon-labs, USI, etc.”

The comprehensive and in-depth report on “ Global IoT Cellular Module Tracker and Forecast By Technology By Application: 2009-2025” is a part of our Counterpoint’s IoT (Internet of Things) Service. This report is available for download here

Background:

Analyst Contacts:

Satyajit Sinha

Hanish Bhatia
+91 9871849857
hanish@counterpointresearch.com

@Hanish2501

Ethan Qi

ethan@counterpointresearch.com

Counterpoint Research

@CounterPointTR

USA IoT Cellular Connections to Cross Half a Billion Mark by 2025, Cellular LPWAN to Contribute Nearly Half

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

10^th Oct 2018

AT&T will continue to lead by contributing to almost 50% of the USA total IoT cellular connection. T-Mobile’s and Sprint’s potential merger will lead them to be in 2^nd spot in USA by pushing Verizon to 3^rd by 2025.

According to the latest research from Counterpoint’s IoT (Internet of Things) service, USA IoT Cellular Connections grew 21 % YoY in 1H18 and we estimate it to grow by 25% YoY by end of 2018 driven by the roll out of IoT Low Power Wireless Access Networks (LPWAN).

Commenting on the network operators’ IoT deployment strategy, Counterpoint Research Analyst, Satyajit Sinha, noted, “Initially, the big US operators such as Verizon and AT&T, opted for LTE-M as the primary cellular LPWA network as opposed to China, where NB-IoT was opted. However, in the beginning of 2018, US operator T-Mobile went live with its NB-IoT network prompting the competition to rethink their LPWA strategy and tilt towards NB-IoT adoption network alongside the complementary LTE-M network. This is great news for NB-IoT ecosystem to scale further and faster with world’s top operators and markets adopting this promising LPWA technology.”

Mr. Sinha, further added, “From a technical perspective there are major differences between LTE-M and NB-IoT, such as channel bandwidth, peak data rate and device power consumption. Moreover, LTE-M is more suitable for IoT applications which required relatively higher throughput and support voice as compare to NB-IoT. As a result, key use cases for LTE-M will include healthcare monitoring, asset tracking, pets and kids tracking applications. Whereas NB-IoT will be suitable for application requiring low power and low bandwidth such as smart meters, smart smoke detectors, smart parking, smart city and plethora of other applications.”

Adding his perspective, Research Director, Jeff Fieldhack, noted, “Although NB-IoT has arrived late in USA as compared to China, in the case of 5G, US operators are leading with respect to the testing and deployment schedule. As 5G will be crucial for some high bandwidth as well low latency applications such as autonomous cars, drones, HD intelligent surveillance cameras, Industrial IoT and so forth. 5G IoT cellular connections will contribute to 16% of USA IoT cellular connection by 2025”

Exhibit 1: USA Cellular IoT Cellular Connection market share in 2018E vs 2025E

Source: Counterpoint Research: 2010-2025 USA IoT Cellular Connection Tracker and Forecast

Highlighting the major challenges, Counterpoint Research Analyst, Maurice Klaehne added, “Among the major challenges, security is one of the major roadblocks for the US, as traditionally cybersecurity was mostly about software applications and the US was dependent on it. However, with IoT, there is a need to secure hardware at one end and data at the other. Henceforth, there is a rising need for hardware to network to cloud for end-to-end security. Hence, the federal authorities and the industry stakeholders in the USA need to look at the proliferation of these IoT solutions as a whole to meet the highest grade privacy and security standards.”

Exhibit 2: USA IoT Cellular Connection by Technology Market Share in 2018E vs. 2025E

Source: Counterpoint Research: 2010-2025 USA IoT Cellular Connection Tracker and Forecast

USA IoT Cellular Connection Analysis of 1H 2018 at Operator level:

AT&T grew by 29% YoY and leads the market with 51% share of IoT cellular connections. Moreover, AT&T’s 50% share of IoT cellular connections was aided by its automotive connections.
Verizon grew by 11% YoY with 23% share of IoT cellular connections. Verizon’s connections are dominated by transport and logistics and enterprise segments.
Sprint grew by 2% YoY with 15% share of IoT cellular connections. A majority of Sprint’s connections are dominated by energy, industrial, automotive and enterprise.
T-Mobile grew by 39% with 11% share of IoT cellular connection. Currently, energy, industrial and enterprise applications are dominating its cellular connections. However, going forward we are expecting to see a significant increase in cellular connections from smart city applications.

The comprehensive and in-depth report on “USA IoT Cellular Connection Tracker CY 2010-2025” is a part of our IoT (Internet of Things) service. This report is available for download here

Background:

Analyst Contacts:

Satyajit Sinha

neil@counterpointresearch.com

Jeff Fieldhack
+1 858 603 2703
jeff@counterpointresearch.com

Maurice Klaehne
+1 617 336 8383
maurice@counterpointresearch.com

Neil Shah
+91 9930218469

@neiltwitz

Counterpoint Research

@CounterPointTR

Global IoT Cellular Connections to Cross 5 Billion Mark by 2025, NB-IoT to contribute nearly half

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

Sep 26^th, 2018

China will continue to lead by contributing almost two-thirds of the global IoT Cellular Connections. Whereas, Vodafone will continue to be the largest operator elsewhere globally if we exclude China and Chinese operators.

According to the latest research from Counterpoint’s IoT (Internet of Things) service, Global IoT Cellular Connection grew 72 % in 1H18, a considerable increase from the same period last year.

Commenting on the future growth of connected IoT devices, Counterpoint Research Analyst, Satyajit Sinha, noted, “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.”

Mr. Sinha, further added, “Emerging markets like India, Brazil and in Africa while can offer tremendous scale but will likely be late followers compared to China in this path to connected everything. However, the massive growth opportunity remains in terms of cellular-IoT connections in emerging markets which will be possibly catalysed by operators such as Jio in India but more specifically from multi-market players such as Telefonica or MTN or Vodafone with plans to deploy LPWAN networks such as NB-IoT leveraging scale across their coverage markets.”

Adding his perspective, Research Director, Peter Richardson, noted, “Most of the IoT connections are still on 2G/2.5G networks. However, the shift to 4G LTE and cellular-LPWAN is already in motion and we expect an ongoing shift to these newer technologies in 2H 2018 and 2019.”

Mr Richardson, also added, “While cellular-LPWAN brings a number of advantages over unlicensed LPWA solutions – there are a number of use cases where unlicensed technologies offer a superior mix of cost and functionality. Over the short to medium term, we expect co-existence and even the combined use of both licensed and unlicensed LPWA technologies.”

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, Research Director, Neil Shah added, “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 the 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.”

Mr Sinha, though highlighted, “Consumer IoT is still largely an untapped opportunity for cellular operators and probably the toughest one. This is partly due to device and connectivity costs and, to some degree, due to data privacy & security concerns. The continuous growth in security and data privacy policies, such as GDPR, will help and grow consumer confidence. We expect cellular consumer IoT will form an important revenue stream for operators starting with smart home and wearables to be top IoT applications by 2025.”

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.

Background:

Analyst Contacts:

Satyajit Sinha

peter@counterpointresearch.com

Peter Richardson
+44 20 3239 6411

@MobilePeter

Neil Shah
+91 9930218469

neil@counterpointresearch.com

@neiltwitz

Counterpoint Research

@CounterPointTR

Next half billion IoT cellular connections by 2020; Chinese Operators to dominate

Global IoT cellular connections grew 41% annually to the end of 3Q 2017, having already crossed the half billion mark earlier in 2017. At the end of 3Q 2017, Chinese operators dominated the market holding more than 46% of IoT cellular connections. China Mobile was the world’s leading operator in terms of IoT connections. However, outside China, Vodafone leads in IoT cellular connectivity globally.

Cellular IoT acts as the backbone in driving secure connectivity for different devices to the internet and across different verticals. The type of access used will depend on the nature of the application. 3GPP WAN technologies like GSM (2G), WCDMA (3G), 4G LTE and upcoming 5G technologies, operate in licensed spectrum and have primarily targeted high-quality mobile voice and data services. However, they are being complemented with new functionality and the new radio access standards like EC-GSM, LTE-M and narrowband IoT (NB-IoT), specifically tailored to be an attractive solution for emerging low power wide area (LPWA) applications that will be the key IoT connectivity drivers alongside 5G in coming years.

At the end of 3Q 2017, 4G LTE connections were leading, accounting for more than half the cellular IoT connections and registering 84% YoY growth. Today, 4G LTE supports IoT with legacy 4G and LTE-Cat1 connections. The main application areas are for Energy Utilities and Remote Asset Monitoring. However, going forward most of these applications will be supported by cellular LPWA technologies like EC-GSM, LTE-M and NB-IoT, especially for low-power, low-data, battery-powered use-cases. These cellular LPWA connections are in the early deployment or trial phase and amount to less than 1% of the total cellular IoT connections.

Exhibit 1: Global IoT Connections Share by Cellular Access Technology

IoT cellular connectivity has been modest so far, but we expect the next half billion IoT cellular connections to be added by 2020. The upcoming dual-mode modules supporting both LTE-M and NB-IoT will further drive LPWA connections, and we will see a decline in legacy connections, as most of the earlier M2M type applications will migrate to LPWA networks. Players such as Vodafone will be able to accelerate the NB-IoT roll-outs across multiple countries, leveraging global scale to accelerate the cellular LPWA adoption internationally. China serves as a model, where Chinese operators such as China Mobile and China Telecom are ramping up the roll-out and deployments at a rapid pace. This is also having a knock-on impact of lowering the overall module (see here), device and service costs

Cellular IoT operators are well-positioned to become a single and preferred source for IoT solutions by bundling IoT devices, secure connectivity, platform and data management. While some operators might lead in offering end-to-end IoT solutions for specific verticals e.g. connected cars or asset tracking, for some verticals operators will still depend on system integrators and other solution providers to help customers deploy the complete solution. Having said that, operators are better positioned to capture maximum value in IoT, unlike in the smartphone space where much of the business opportunity was captured by OTT players. We should see a more integrated play by leading operators in the IoT space in mid- to long-term, at least is some application areas.

Exhibit 2: Global Cellular IoT Connections Share by Operator in 3Q 2017

IoT Connectivity Market Analysis – Q3 2017

China Mobile grew 21% QoQ and leads the market with 32% share of connections. China Mobile has leapfrogged global operators, exercising enormous domestic scale, quickly transitioning to 4G LTE IoT connections and now aggressively rolling out NB-IoT connections to further exploit the IoT opportunities. China Mobile was a bit late starting its NB-IoT service but is now aggressively pursuing the service rollout. In August 2017, China Mobile issued RFPs (Requests for Proposals) for two projects, worth a combined total of CYN 39.6 billion (US$ 6 billion) to achieve nation-wide NB-IoT commercialization by early 2018:
- Wireless and core network equipment for cellular IoT 2017-2018
- Procurement of NB-IoT antennas 2017-2018
Vodafone grew 37% YoY and holds the second position with 10.9% market share. As of 3Q2017, Vodafone had launched NB-IoT in four countries including, The Netherlands, Ireland, Czech Republic and Spain. Vodafone added commercial NB-IoT networks in Turkey and Australia in early 4Q 2017.
China Unicom grew 39% YoY and holds third position with 9.4 % market share. China Unicom announced pre-commercialization of NB-IoT in May. Shanghai became the first trial city for its pre-commercial network. China Unicom is still in the pre-commercial stage with no officially announced tariff plan. It will have pre-commercialization in 10 domestic cities by the end of 2018.
AT&T grew 23% YoY and holds fourth spot with 6.4 % market share. AT&T’s LPWA IoT strategy currently is focusing on LTE-M, which the operator began rolling out in 2Q 2017 with initial applications being asset tracking (pallet tracking) and smart meters.
China Telecom grew 17% YoY and holds fifth place with 5% market share. In terms of NB-IoT, it was the fastest developing company for NB-IoT connection among Chinese operators. It completed network coverage of 800 million people under NB-IoT by the end of June 2017, and announced commercialization of NB-IoT in July. In so doing it became the first operator in China to officially kick-off the commercialization of an NB-IoT service.
Asia grew 64.2% YoY and dominates cellular IoT connections with a 57.2% share. China is the major contributor with 81% of Asian connections and grew 75% YoY:
- Japan And South Korea grew 15 % and 25 % YoY respectively. Japan holds 5% share and South Korea holds 2% share within Asia.
- In terms of LPWA development, South Korea is ahead of Japan. S.K.Telecom, LG U+ and KT Corp commercialised their NB-IoT services in 3Q 2017. KT Corp also commercialised LTE-M in 2Q2017. South Korean Operators are looking forward to driving their LPWA connections in 2018 with specific focus areas being agriculture and energy utilities.
Americas grew 20% YoY and holds second position with a 19.6% share. The USA’s four operators account for 68% of the connections in the Americas region. The US grew 17% YoY:
- AT&T and Verizon are the only US operators that have so far commercialised LTE-M networks – both in 2Q2017. Within the US, these two operators hold 72.5% of IoT cellular connections.

For our detailed analysis on Global Cellular IoT Connections Tracker, you can access the full report on our Insights Portal

Sierra Wireless and SIMCOM Lead the IoT Cellular Modules Market in Revenues & Volumes

Cellular connectivity is the backbone to drive secure connection of different devices to the internet across different verticals. The role of cellular modules to securely and reliably connect the devices with the management platforms, the cloud is critical to enable flow of data and information both ways. From monitoring health to smart utility meters, integrated logistics, manufacturing systems, drones and more, the cellular modules will play a crucial role in transformation from M2M to IoT to IIoE (Intelligent Internet of Thing)

The ability of IoT cellular modules to deliver multiple benefits that can lower the costs, and extend the range of solutions have made IoT cellular modules a successful growth story in recent years. Technology evolution in cellular from 2G to 3G and 4G has delivered enormous spectral efficiency gains and much-improved resource utilization with the availability of greater peak data rates and lower latency. New Low Power Wide Area networks (LPWANs) such as Narrowband IoT (NB-IoT) modules are poised to make inroads into the IoT market. This promises long-range cellular connectivity at a substantially lower cost, lower power than the traditionally 2G/3G/4G cellular modules special designed for IoT applications. However, 90 % of the cellular modules shipped in 1H 2017 were still the traditional 2G/3G/4G cellular modules, but this is bound to change rapidly in near- to mid-term as the LTE Cat-M and NB-IoT network rolls out.

According to our research, cellular IoT connections crossed half a billion subscriptions in 1H 2017. It took a decade for our industry to reach half a billion IoT connections, however, the next half a billion milestone will reach in less than a fourth of the time it took earlier. This will drive the demand for cellular IoT modules, especially LPWA modules for low power applications and 4G /5G capable modules for data driven applications such as connected cars.

While the global operators will mainly drive cellular deployments, competitive forces from proprietary non-cellular LPWA networks such as SigFox, LoRaWAN, and others will find traction in ultra-low power, low-cost and low-scale deployments. We could see the hybrid strategy of cellular+non-cellular IoT deployments from operators segmented based on types and scale of IoT applications to bear fruit in next couple of years.

Exhibit 1: Global Cellular IoT Module Shipments market share by Volume in 1H 2017

Source: Q2 2017 IoT Tracker

Despite failed acquisition by u-blox, the Shanghai-based SIMCom Wireless continues to lead the cellular module market in terms of volume with 23% market share growing 122% YoY. Whereas, Canada based Sierra Wireless remained the leader in terms of revenue, capturing a third of the total cellular IoT module market.”

While Chinese brands like SIMCom Wireless and Quectel are winning with affordable 2G and 3G module shipment volumes, the competitive landscape might look different in a year’s time as the industry transitions from 2G/3G to 4G/LPWA networks. We expect to see more hybrid cellular module solutions integrating multiple flavors of cellular access technologies. Integrated players such as Sierra, Telit and Gemalto are well positioned to cash on this trend. Likewise, the cellular chipset vendors such as Qualcomm, Altair and Sequans will see more of their solutions integrated into these modules and witness a considerable uptick in coming quarters.

Exhibit 2: Global Cellular IoT Module Shipments market share by Revenue in 1H 2017

Source: Q2 2017 IoT Tracker

The cellular IoT module market is dominated by top five brands contributing two-thirds of the cellular module volume shipments and 85% of the revenues.

SIMCom Wireless grew 122 % YoY, with 23% market share in cellular module volume and upheld the leading position in cellular IoT module shipment. During the first half of 2017, SIMCom obtained certification from Verizon Wireless for its new low-power LTE Cat M1 solution. This is a great step for SIMCom to expand into the important North American market and LTE segment
Sierra Wireless grew 23 YoY % in shipments volume and led the market in terms of revenue with 32% market share. Sierra Wireless’s AirPrime AR Series embedded modules and Legato platform is going to power Car-Net connectivity for Volkswagen automobiles beginning in 2018, a great win during the first half. The vendor also announced industry’s first LTE-Advanced Pro embedded modules alongside its next-generation Narrowband IoT (NB-IoT) modules, which are expected to be certified and available for T-Mobile’s Narrowband IoT network in early 2018
Gemalto grew 3 % YoY by shipments volume and cemented the second spot in terms of cellular IoT module revenues with 20 % share. Gemalto‘s new Cinterion LTE Cat. M1 looks to deliver low-power and data rate LTE connectivity for Machine-Type-Communication (MTC) to drive power savings targeting10+ years battery life
Telit Communications grew 7 % YoY in cellular module volume shipments and grabbed third position by volumes as well as revenue, hinting to a well-balanced price and product mix. Telit announced during the first half that its Cat-NB1 modules are under testing on T-Mobile’s Narrowband IoT network, which is expected to launch nationwide by mid-2018. This should help Telit gain significant traction as T-Mobile has been one of the disruptive and high-growth force in USA operator landscape
u-blox grew 2 % YoY in volume. However, U-Blox lost cellular module volume’s market share from 6.1 % in 1H2016 to 4.6 % in 1H2017. The failed acquisition of SIMCom Wireless also didn’t help its cause to jump directly to number one module supplier. However, u-blox has been expanding its portfolio with different LPWA solutions, announcing a configurable LTE Cat M1/NB1 multi‑mode module with worldwide coverage. The module SARA‑R410M is expected to be certified and available in early 2018 for T‑Mobile’s NB‑IoT network, which is expected to launch nationwide in mid‑ This is important as T-Mobile is the early mover driving NB-IoT in the USA ahead of rivals AT&T and Verizon which are still banking on LTE Cat-M network for IoT strategy.

Global IoT Cellular Module Shipment Demand in Growth Mode as 4G, LTE Cat-M & NB-IoT Deployments Ramp

Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

September 20^th, 2017

Chinese vendor SIMCom led in volumes while Canadian vendor Sierra Wireless led by value as the global cellular module shipments were up 35% YoY. Moving forward, 4G, LTE-M and NB-IoT will be key volume drivers.

According to the latest research from Counterpoint’s IoT (Internet of Things) service, global cellular IoT module shipments grew 35 % annually.

Commenting on the latest research on the growth of connected devices, Counterpoint’s Research Analyst, Satyajit Sinha, noted, “Cellular connectivity is the backbone to drive secure connection of different devices to the internet across different verticals. The role of cellular modules to securely and reliably connect the devices with the management platforms, the cloud is critical to enable flow of data and information both ways. From monitoring health to smart utility meters, integrated logistics, manufacturing systems, drones and more, the cellular modules will play a crucial role in the transformation from M2M to IoT to IIoE (Intelligent Internet of Things).”

Mr Sinha, further added, “The ability of IoT cellular modules to deliver multiple benefits that can lower the costs, and extend the range of solutions have made IoT cellular modules a successful growth story in recent years. Technology evolution in cellular from 2G to 3G and 4G has delivered enormous spectral efficiency gains and much improved resource utilization with the availability of greater peak data rates and lower latency. New Low Power Wide Area networks (LPWANs) such as Narrowband IoT (NB-IoT) modules are poised to make inroads into the IoT market. This promises long-range cellular connectivity at a substantially lower cost, lower power than the traditionally 2G/3G/4G cellular modules special designed for IoT applications. However, 90 % of the cellular modules shipped in 1H 2017 were still the traditional 2G/3G/4G cellular modules, but this is bound to change rapidly in near- to mid-term as the LTE Cat-M and NB-IoT network rolls out. “

Adding his perspective, Research Director, Peter Richardson, noted, “According to our research, cellular IoT connections crossed half a billion subscriptions in 1H 2017. It took a decade for our industry to reach half a billion IoT connections, however, the next half a billion milestone will reach in less than a fourth of the time it took earlier. This will drive the demand for cellular IoT modules, especially LPWA modules for low power applications and 4G /5G capable modules for data driven applications such as connected cars.

Mr Richardson, further adds, “While, the global operators will mainly drive cellular deployments, competitive forces from proprietary non-cellular LPWA networks such as SigFox, LoRaWAN and others will find traction in ultra-low power, low-cost and low-scale deployments. We could see hybrid strategy of cellular+non-cellular IoT deployments from operators segmented based on types and scale of IoT applications to bear fruit in next couple of years”.

Exhibit 1: Global Cellular IoT Module Shipments market share by Volume in 1H 2017

Source: Q2 2017 IoT Tracker

Highlighting the competitive landscape in the cellular IoT module segment, Research Director, Neil Shah added, “Despite failed acquisition by u-blox, the Shanghai based SIMCom Wireless continues to lead the cellular module market in terms of volume with 23% market share growing 122% YoY. Whereas, Canada based Sierra Wireless remained the leader in terms of revenue, capturing a third of the total cellular IoT module market.”

Looking at the future deployments, Mr Shah, added,” While Chinese brands like SIMCom Wireless or Quectel are winning with affordable 2G and 3G module shipment volumes, the competitive landscape might look different in a year’s time as the industry transitions from 2G/3G to 4G/LPWA networks. We expect to see more hybrid cellular module solutions integrating multiple flavors of cellular access technologies. Integrated players such as Sierra, Telit and Gemalto are well positioned to cash on this trend. Likewise, the cellular chipset vendors such as Qualcomm, Altair and Sequans will see more of their solutions integrated into these modules and witness a considerable uptick in coming quarters.”

In recent months, major operators and players across IoT value chain are highlighting the upcoming wave of 4G and LPWA deployments, for example:

At Mobile World Congress Americas earlier this month, CTO for China Telecom, Qi Bi, noted, “We ran out of devices; people are lined up, I think NB-IoT will take off big time in China”

Discussing this key competitive development, CTO in North America for Nokia, Michael Murphy, added, “Carriers would like to wipe out their LPWA competitors, and I believe they will”

Chief Executive of Link Labs, Bob Proctor added, “Cellular IoT is also getting traction in asset tracking, often coupled with Bluetooth in delivery vehicles or factory-floor systems. Generally speaking, you have to be able to work with many technologies”.

Exhibit 2: Global Cellular IoT Module Shipments market share by Revenue in 1H 2017

Source: Q2 2017 IoT Tracker

The cellular IoT module market is dominated by top five brands contributing two-thirds of the cellular module volume shipments and 85% of the revenues.

SIMCom Wireless grew 122 % YoY, with 23% market share in cellular module volume and upheld the leading position in cellular IoT module shipment. During the first half of 2017, SIMCom obtained certification from Verizon Wireless for its new low-power LTE Cat M1 solution. This is a great step for SIMCom to expand into the important North American market and LTE segment
Sierra Wireless grew 23 YoY % in shipments volume and led the market in terms of revenue with 32% market share. Sierra Wireless’s AirPrime AR Series embedded modules and Legato platform is going to power Car-Net connectivity for Volkswagen automobiles beginning in 2018, a great win during the first half. The vendor also announced industry’s first LTE-Advanced Pro embedded modules alongside its next-generation Narrowband IoT (NB-IoT) modules, which are expected to be certified and available for T-Mobile’s Narrowband IoT network in early 2018
Gemalto grew 3 % YoY by shipments volume and cemented the second spot in terms of cellular IoT module revenues with 20 % share. Gemalto‘s new Cinterion LTE Cat. M1 looks to deliver low-power and data rate LTE connectivity for Machine-Type-Communication (MTC) to drive power savings targeting10+ years battery life
Telit Communications grew 7 % YoY in cellular module volume shipments and grabbed the third position by volumes as well as revenue, hinting to a well-balanced price and product mix. Telit announced during the first half that its Cat-NB1 modules are under testing on T-Mobile’s Narrowband IoT network, which is expected to launch nationwide by mid-2018. This should help Telit gain significant traction as T-Mobile has been one of the disruptive and high-growth force in USA operator landscape
u-blox grew 2 % YoY in volume. However, U-Blox lost cellular module volume’s market share from 6.1 % in 1H2016 to 4.6 % in 1H2017. The failed acquisition of SIMCom Wireless also didn’t help its cause to jump directly to number one module supplier. However, u-blox has been expanding its portfolio with different LPWA solutions, announcing a configurable LTE Cat M1/NB1 multi‑mode module with worldwide coverage. The module SARA‑R410M is expected to be certified and available in early 2018 for T‑Mobile’s NB‑IoT network, which is expected to launch nationwide in mid‑ This is important as T-Mobile is the early mover driving NB-IoT in USA ahead of rivals AT&T and Verizon which are still banking on LTE Cat-M network for IoT strategy

Background:

Analyst Contacts:

Satyajit Sinha