New research by the global group Omdia predicts that cellular Internet of Things (IoT) connections will reach 5.4 billion by 2030, driven significantly by the ascendance of 5G technologies. The anticipated rise in cellular IoT connections is largely attributed to the focus on 5G RedCap, 5G Massive IoT, and 4G LTE Cat-1bis modules. This impending shift highlights the increasingly vital role of advanced cellular connectivity solutions in the ever-evolving technological landscape.
The forecast also indicates a widespread adoption of 5G RedCap from 2024 as it positions itself as a mid-tier connectivity solution applicable to 5G devices that don't require high specifications, such as Ultra-Reliable Low Latency Communications (uRLLC) and Enhanced Mobile Broadband (eMBB). The impending popularity of 5G RedCap also signals a more significant industry trend, with companies preparing for the projected discontinuation of 4G beyond 2030.
Alexander Thompson, Senior Analyst for IoT at Omdia, posited that 2024 will be a transformative year for 5G RedCap growth, primarily stemming from China, the expected source of most volume. He stated, "2024 will be a pivotal year for 5G RedCap growth. This will begin in China, where most volume is expected and in due course subsidies will bring the module Average Selling Price (ASP) down to similar pricing as LTE Cat-1."
The Omdia research also outlines that over 60% of IoT module shipments will originate from the Asian and Oceania region, making up roughly 80% of IoT connections in 2023. The automotive industry is expected to be a significant sectoral driver for this, with the largest number of module shipments thought to meet the rising demand for smart vehicles incorporating 5G connectivity.
Despite the exponential growth of hyperscaler offerings and financial hurdles for start-ups in the current economic climate, Andrew Brown, Practice Lead for Omdia’s IoT group, affirms that industry-specific Application Enablement Platforms (AEPs) will remain the leading revenue generator across the IoT value chain. Brown stated, "Across the IoT value chain, Application Enablement Platforms (AEPs) continues to be the leading revenue generator. There remains a role for industry-specific/pure-play AEPs despite the exponential growth of hyperscaler offerings and financial constraints for start-ups in the current economy."
Omdia’s projected trends in the Cellular IoT Market Tracker 2023-2030 offer vital analysis by region, air interface, and application of module shipments, module revenues, connections (installed base), and connectivity revenues in the cellular IoT market.