IoT module shipments get a boost as industry shifts to 5G

Internet of Things (IoT) modules, which connect smart devices to 5G cellular networks, are getting a boost as telcos worldwide prepare to turn on these networks. According to a report by Counterpoint Research, shipments of these modules are expected to cross 1.2 billion units by 2030 and will grow at a compounded annual growth rate (CAGR) of 12% over the next eight years. 

The study noted that the shipments will be mainly driven by 5G, Narrowband (NB)-IoT and 4G Cat 1 bis technologies. 5G will be the fastest growing (60%) technology, followed by 4G Cat 1 bis, during 2022-2030.  

In telecommunications, the Long-Term Evolution (LTE) Cat 1 bis is a wireless communication standard that allows IoT devices to adopt single antenna designs while reserving the same level of network capability. 

The LTE is a standard for wireless broadband communication for mobile devices and data terminals, based on the GSM/EDGE and UMTS/HSPA standards. 

Also, a March 2022 report by Counterpoint pointed out that global cellular IoT module revenue grew 58% YoY in Q4 2021 and that China, the leading region in the cellular IoT module market, accounted for more than 40% of the revenue. However, India was the fastest growing (154% YoY) cellular IoT module market. 5G was the fastest growing (324% YoY) technology followed by 4G Cat 1 (105% YoY). Router/CPE, PC and industrial were the top applications for 5G. 

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“With the ongoing sunset of 2G and 3G networks across the world, most of the demand has been shifting to LPWA, 4G Cat 1 and 4G Cat 1 bis technologies until now. NB-IoT will still remain popular in parts of Asia, including China, and Europe, while 4G Cat-1-based modules proliferate over the next few years, said Soumen Mandal, Senior Research Analyst at Counterpoint research.

The study further points out that 5G shipments will overtake 4G by 2028 to become the leading technology in the global cellular IoT module market. Also, smart meter, industrial, router/CPE, automotive and POS will be the top five applications in 2030 in terms of shipments and 5G RedCap mass adoption is expected to happen in 2027 and onwards. 

With Low Power Wide Area (LPWA) technologies such as NB-IoT, LTE-M and 4G Cat-1 driving this initial adoption of cellular IoT, the global cellular IoT market will transition from 4G to 5G in the rest of this decade. This transition will be faster compared to the transition from 2G/3G to LPWA/4G in the IoT segment. 5G will be the leading technology in the global cellular IoT module market, followed by NB-IoT and 4G Cat 1 bis. 

The rollout of 5G and introduction of 5G RedCap in coming years will see the adoption of 5G across intelligent IoT applications in industrial, asset tracking, POS, telematics, healthcare and wearables segments, mostly replacing traditional 4G IoT applications. We estimate that cumulative 5G shipments (excluding 5G RedCap) will reach 2.5 billion units, growing at a CAGR of 60% between 2022 and 2030. 

By the end of this decade, we should see the introduction of 6G technology for IoT. However, 6G will be limited to higher-end applications such as enterprise and broadband in the initial years of adoption, the report said.  

It further said that smart meter, industrial, router/CPE, automotive and POS will be the top five applications in 2030 in terms of shipments. 5G will be preferred for Industrial 4.0 (like robotics, automation and digital twins), router/CPE (like FWA and private networks) and automotive (like connected and autonomous mobility) applications, LPWA will be preferred for utilities (smart meter) and 4G Cat 1 bis and 5G RedCap for POS applications. 

“China leads in 5G adoption in the global cellular IoT module market. However, North America and Europe will have great potential in the future. 5G adoption in emerging markets such as India and Latin America will also grow faster and 5G RedCap may become popular in these regions,” said Neil Shah, President Research at Counterpoint.