Cellular IoT modules revenue grow 12% to $5.9 bn

Annual sales of cellular IoT modules increased by 12 percent, reaching a total of $5.9 billion in 2022, according to a recent research report from Berg Insight.
Cellular IoT market revenue forecastGrowth in shipments of cellular IoT modules remained steady at 427 million units in 2022 compared to the previous year, the report said.

Among cellular module vendors, Quectel, Fibocom, Sierra Wireless, Sunsea AIoT, and Telit emerged as the top five, capturing 69 percent of the market in terms of revenues.

The cellular IoT modules industry has experienced consolidation, with notable acquisitions such as Telit acquiring Thales’ Cinterion line of IoT products and services, Semtech acquiring Sierra Wireless, and Fibocom consolidating ownership in Rolling Wireless.

In terms of cellular IoT technology, 4G LTE technologies dominated the landscape in 2022, with LTE Cat-1, NB-IoT, and LTE-M replacing 2G and 3G technologies in the low to mid market segments. LTE Cat-1 modules accounted for a significant share of volume across all regions.

In China, modules based on chipsets from domestic suppliers, supporting the single antenna version LTE Cat-1 bis, were available at a lower price, around US$10 compared to standard LTE Cat-1 modules.

In large tenders, prices for LTE Cat-1 bis modules even dropped below US$5 per unit. The adoption of LTE Cat-1 in China somewhat affected NB-IoT shipments, which experienced a year-on-year decline. Outside of China, NB-IoT module shipments remained in the single-digit millions, primarily driven by deployments in smart gas meters and smart water meters.

LTE-M emerged as the fastest-growing technology in 2022, presenting an attractive option for IoT devices with stringent power consumption and long lifecycle requirements. Both LTE-M and NB-IoT are 5G-ready, making them suitable for IoT devices expected to remain in the field for over 10 years. This longevity is crucial as mobile operators in advanced markets plan to phase out their 4G LTE networks towards the end of the decade.

Currently, LTE-M module shipments far exceed NB-IoT shipments outside of China. The ability to perform over-the-air software upgrades for LTE-M devices has been a key factor in its success compared to NB-IoT.

Although 5G is gradually replacing high-speed 4G LTE variants in product categories like connected cars, customer premises equipment (CPEs), and IoT gateways, 5G module shipments were limited to fewer than 10 million units in 2022.

The introduction of the first chipset supporting the 5G RedCap specification occurred in early 2023. 5G RedCap chipsets are less complex and expensive than 5G eMBB-capable chipsets, serving as a replacement for LTE Cat-4 and LTE Cat-6 chipsets in use cases with lower data rate requirements below 300 Mbps.

While 5G RedCap modules are currently available in samples, they are expected to be priced at approximately double the cost of LTE Cat-4 modules.

Berg Insight predicts that the adoption of 5G RedCap technology will initially be limited due to the price difference, a limited number of chipset providers, and the requirement for 5G SA network coverage. Early adopters of 5G RedCap are likely to be providers of high-end IoT devices such as wearables, telematics gateways, industrial meters, and alarm panels.