New research from Omdia points to a significant transformation in the cellular Internet of Things (IoT) ecosystem over the next seven years, propelled by the of 5G technologies.
The study, focused on 5G RedCap, 5G Massive IoT, and 4G LTE Cat-1bis modules, projects a substantial increase in shipments, culminating in an estimated 5.4 billion cellular IoT connections (installed base) by the year 2030. This shift signifies the evolving landscape and growing importance of advanced cellular connectivity solutions.
The research highlights the imminent mass adoption of 5G RedCap, anticipated to commence from 2024 onward. Positioned as a mid-tier connectivity solution for 5G devices not requiring specifications as high as Ultra-Reliable Low Latency Communications (uRLLC) and Enhanced Mobile Broadband (eMBB), 5G RedCap is expected to play a crucial role in future-proofing devices amid the anticipated phase-out of 4G beyond 2030.
Alexander Thompson, Senior Analyst for IoT at Omdia, commented, “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 forecast predicts that over 60 percent of IoT module shipments will originate from the Asian & Oceania region, constituting around 80 percent of IoT connections in 2023. The automotive sector emerges as a key driver, poised to witness the largest number of module shipments due to the escalating demand for smart vehicles integrating 5G connectivity.
Andrew Brown, Practice Lead for Omdia’s IoT group, emphasized, “Across the IoT value chain, Application Enablement Platforms (AEPs) continue 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 startups in the current economy.”