Report: Global Market for Cellular IoT Modules Declines

By Emma Okonji

IoT Analytics, a global provider of market insights and competitive intelligence for the Internet of Things (IoT) and Industry 4.0, this month launched an in-depth cellular IoT module market tracker that provides a quarterly look at the revenues and shipments of 33 companies providing cellular connectivity hardware modules for IoT deployments.

According to the report, recent quarterly research on IoT deployments showed that the global market for Cellular IoT modules declined by eight per cent in 2020 in most countries, except China that showed growth in 2020.

According to the report, “With 4.5 billion cellular IoT connections expected by 2025, the market for cellular IoT modules is in a long-term cyclical uptrend, which was disrupted in 2020 by COVID-19. Every connected device that makes use of a cellular connection like 2G, 3G, 4G, or 5G, uses either a cellular IoT module or a cellular chipset embedded directly into the printed circuit board of a device or a piece of equipment.”

Commenting on the findings of the research report, CEO at IoT Analytics, Knud Lasse Lueth, said: “The promise of pre-configured IoT modules has become increasingly attractive in recent years, as customers are looking to decrease time-to-market for IoT solutions and multi-connectivity setups have made it more complicated for companies to develop their own solutions.”

The data analysis performed by IoT Analytics showed that the global cellular IoT module market took a strong hit in 2020, due to COVID-19, with global revenues declining eight per cent year-over-year (YoY) to $3.1 billion. The situation, according to the report, was however different in China, where Cellular IoT module shipment in grew 14 per cent YoY in 2020, while cellular IoT module shipment in the rest of the world declined.

“The reason the Chinese market expanded while other markets contracted is simple. Many IoT initiatives were halted or, in some cases, cancelled in 2020 due to COVID-19. IoT initiatives in China, however, were much less affected and continued as planned after a short COVID-19 lockdown. One of the exciting trends that has emerged from the research is that the connectivity picture in China is quite different than in the rest of the world,” Lueth said.

Outside of China, LTE-Cat 1 penetration was much stronger than, for example, narrowband (NB)-IoT penetration. LTE-Cat 1 makes up 23 per cent of the market outside of China but only 12 per cent in China.

Cellular/licensed low-power wide-area (LPWA) shipments (NB-IoT and long-term evolution-machine type communication (LTE-M)) contributed to only 10 per cent of the market outside of China in 2020. China is focused on NB-IoT; 90 per cent of all NB-IoT shipments in 2020 originated there, the report further said.

Senior Analyst at IoT Analytics, Satyajit Sinha, said: “The rise of LTE-Cat 1 started in North America a few years ago. That is when LTE-Cat 1 started to become the go-to alternative for 2G and 3G IoT applications as 2G networks were retired by network operators. The massive migration from 2G/3G to LTE-Cat 1 started in 2018. Telit, Thales, and Sierra Wireless, for example, have collectively shipped more than 40 million LTE-Cat 1 modules in the last three years in the outside-China region. As evidenced in the data, the decline in shipments of 2G/3G modules was directly proportional to the increase in shipments of LTE-Cat 1 modules outside of China.”

In contrast to five years ago, the cellular IoT module market today is dominated by Chinese providers. Quectel, Fibocom, and SUNSEA AIoT have established themselves as market leaders, and the market expansion in China during 2020 has increased their market position.