Cellular IoT Archives - Counterpoint

Renesas Acquires Sequans: A Strategic Move into Cellular IoT

Renesas acquires Sequans Communications for $249 million, expanding into the cellular IoT market.
The acquisition provides Renesas access to Sequans’ expertise, customer base, and partnerships in the 5G/4G cellular IoT sector.
With cellular IoT module shipments expected to exceed 1.2 billion units by 2030, this strategic move aligns with Renesas’ expansion plans and reflects a broader trend of consolidation in the IoT market.

Japanese semiconductor manufacturer Renesas Electronics has acquired France-based Sequans Communications, a pioneer in 5G/4G cellular IoT chips and modules. The acquisition will enable Renesas to expand its portfolio and expertise in the rapidly growing cellular IoT market. Although Renesas is a prominent name in the world of microcontroller units, the company has not historically specialized in connectivity.

According to the deal, Renesas will purchase all outstanding common shares of Sequans, including American Depositary Shares (ADS), for $3.03 per ADS in cash. This values Sequans at around $249 million, considering net debt. The transaction is expected to close by Q1 of calendar year 2024, subject to regulatory approvals.

Here are some analysis of the deal between Renesas and Sequans:

Renesas acquires Sequans to bolster its cellular IoT capabilities and tap into the expanding market. With this acquisition Renesas gains access to Sequans’ US and European customer base, enhancing global reach and market growth.
The partnership between Renesas and Sequans, which began in 2020, has already resulted in successful collaborations to develop modules that combine embedded processors and analog front-end products with wireless chipsets for IoT applications. Sequans has the broadest product portfolio of its non-Chinese competitors except Qualcomm which is why Renesas acquired Sequans.
The Renesas-Sequans collaboration is primed to meet the rising demand for smart solutions. The merger offers diverse choices for customers seeking to reduce dependence on the Chinese ecosystem and gain valuable expertise from a single source.
Renesas plans to integrate Sequans’ connectivity products, aiming to strengthen its presence in the Wide Area Network (WAN) market. They will collaborate on 5G and high-performance 4G modules based on Sequans’ Taurus 5G modem and Renesas’ analog front-end tech.

Renesas’ Acquisitions Over Time

Source: Counterpoint Research

Conclusion

According to Counterpoint’s report on IoT trends, the IoT market is highly fragmented, with over 4,000 players in IoT value chain competing for a share. This fragmentation has led to low margins and has made it difficult for companies to grow and expand. Consequently, there has been a wave of consolidation in the market, with companies merging or being acquired by larger players, a trend that is expected to continue as the market matures. In 2022, there were significant acquisitions within the IoT module industry, such as Telit’s acquisition of Thales and Mobilogix’s cellular IoT divisions, Semtech’s acquisition of Sierra Wireless, and Aeris Communications’ acquisition of Ericsson’s IoT accelerator and connected vehicle cloud business. As the cellular IoT module market continues to mature, we expect more consolidations aimed at providing improved solutions and maintaining competitiveness. Non-Chinese brands are now following the trend of becoming integrated players in the IoT value chain like Chinese module vendors, and it seems like Renesas is also following suit. For Renesas to compete with Chinese module giants like Quectel and Fibocom, it is crucial for them to develop a strong and effective business strategy specific to each international market they want to operate in.

For detailed research, refer to the following report available for subscribing clients and individuals:

Renesas electronics acquired Sequans a strategic move into cellular IoT

Global Cellular IoT Connections to Cross 6 Billion in 2030

Global cellular IoT connections grew 29% YoY to reach 2.7 billion in 2022 with 4G continuing to grow its majority share.
China held more than two-thirds of total cellular IoT connections in 2022, followed by Europe and North America.
NB-IoT dominates in China, while LTE-M is preferred in Australia, Japan and North America; Europe supports both.
4G and NB-IoT are the most preferred technologies for cellular IoT applications.
5G is nascent as module prices and breadth of applications reflect early-stage dynamics.
IoT growth drivers are shifting, with the enterprise and transformation initiatives key in propelling IoT connections forward.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – June 12, 2023

Global cellular IoT connections grew strongly at 29% YoY to reach 2.7 billion in 2022, according to Counterpoint’s latest Global Cellular IoT Connections Tracker report. They are expected to grow at a CAGR of 10.8% to reach an installed base of over 6 billion by 2030. China held more than two-thirds of total cellular IoT connections in 2022, followed by Europe and North America.

Amid the challenges faced by various industries, such as inflation, macroeconomic headwinds and supply chain constraints, the cellular IoT market has experienced remarkable growth fuelled by the digital transformation initiatives undertaken by various industry applications like smart meters, automobiles and asset tracking in particular. Cellular IoT connectivity has played a significant role in enhancing productivity, streamlining operations, minimizing downtime, automating processes and generating cost savings for industries. The COVID-19 outbreak unexpectedly proved beneficial for enterprise IoT players, accelerating their digital transformation efforts.

Commenting on the cellular IoT connectivity technology dynamics, Senior Research Analyst Soumen Mandal said, “At the end of 2022, 4G and NB-IoT together accounted for nearly 90% of the installed base of cellular IoT connections. 4G emerged as the most preferred technology for cellular IoT connections after surpassing 2G and 3G-based IoT connections in 2016. NB-IoT has gained significant popularity in China, while Japan, Australia and North America prefer LTE-M technology for lower-end applications. Europe has adopted a combination of NB-IoT and LTE-M, supported by roaming services offered by most operators.

In recent times, 4G Cat 1 bis technology has gained significant popularity over NB-IoT due to its superior performance. Applications such as POS, telematics and smart meters are increasingly adopting this technology on a larger scale. The rising shipments of devices based on 4G Cat 1 and 4G Cat 1 bis technologies are contributing to the stagnant market growth of NB-IoT.

5G is still nascent but we expect 5G-based applications to pick up as the module ASP (average selling price) drops to sub-$100 and more 5G RedCap-based solutions become available in the market. The introduction of 5G RedCap and 5G eRedCap will play a crucial role in driving mass adoption of 5G, particularly in developing and underdeveloped countries.”

Commenting on the market outlook, Research Vice President Neil Shah said, “The global cellular IoT connections installed base is expected to surpass 6 billion by 2030 with a CAGR of 10.8%. The growth will be mainly driven by cellular connectivity adoption across various sectors such as utilities, automotive, industrial, retail and healthcare. Unlike the previous decade, where consumer devices like smartphones and PCs played a significant role in driving cellular connections, this decade will see a shift towards cellular connections being propelled by the digital transformation initiatives undertaken by enterprise IoT payers. The widespread adoption of cellular connectivity will also contribute to a further reduction in prices for cellular-connected devices, making them more competitive against alternative non-cellular connectivity technologies like LoRa, Sigfox and Wi-SUN. Over the past year, the cellular IoT industry has witnessed many consolidations, including Telit’s acquisition of Thales’ cellular IoT business, Semtech’s acquisition of Sierra Wireless, and Aeris Communications’ acquisition of Ericsson’s IoT accelerator and connected vehicle cloud business. As the cellular IoT module market continues to mature, we can expect more consolidations aimed at providing improved solutions and maintaining competitiveness against other non-cellular connectivity technologies.”

The comprehensive and in-depth ‘Global Cellular IoT Connections Tracker, 2022’ report is now available for purchase at report.counterpointresearch.com.

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the technology, media and telecom (TMT) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Soumen Mandal

Neil Shah

Mohit Agrawal

Counterpoint Research

press@counterpointresearch.com

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u-blox Marks 25 Years With Record-breaking Revenue, Strong Growth Across All Segments

u-blox’s total revenue grew 44% YoY in 2022 to reach $654 million.
The company shipped more than 100 million chipsets and modules in 2022.
u-blox’s revenue is expected to grow more than 15% YoY in 2023.

Last year saw u-blox’s 25th anniversary, and the company marked the occasion in style, registering a record-breaking revenue of $654 million in 2022, an increase of 44.3% from 2021. Despite supply chain challenges, u-blox managed to fulfill customer demands with a diversified supplier base. The company experienced strong growth across all segments and regions.

Highlights for 2022

u-blox’s operating profit increased 258% YoY in 2022 to reach $138 million, demonstrating improved operational efficiency.
The mass adoption of high precession technology in industrial automation, delivery robots, autonomous construction and agricultural equipment helped its industrial segment to grow 52% YoY and capture 63% of the company’s total revenue.
The automotive segment also grew 54% YoY due to the increased demand for navigation and infotainment applications, driven by the shift towards electric vehicles. The segment contributed 28% to the total revenue.
The consumer segment grew 34% YoY and captured 9% of the total revenue.
Among regions, the revenue from APAC increased 59% YoY propelled by high demand for various applications such as infotainment, navigation, telematics and healthcare, particularly in Japan, Australia and New Zealand. In EMEA, the revenue grew by 43% driven by the strong performance of infotainment, navigation, industrial automation and asset-tracking applications. Similarly, the revenue in the Americas grew 48% YoY fueled by the robust growth of infotainment, navigation, telematics and healthcare applications.
In 2022, modules and GNSS chips contributed 79% and 20% of the total revenue respectively. The company shipped more than 100 million modules and chips combined in 2022.

GNSS modules

u-blox is maintaining its leadership position in the GNSS module market due to its superior quality and high precision. In 2022, u-blox’s GNSS module shipments grew by 28% YoY, contributing more than half of the total module revenue. These modules are widely used in automotive and industrial applications. To further enhance its positioning solutions, it has formed partnerships with GMV to provide end-to-end safe positioning solutions for autonomous vehicles. Additionally, u-blox has secured multiple design wins, including with NXP semiconductor, NVIDIA and Li-Auto, for its ZED-F9K GNSS module for automotive applications.

Wi-Fi/BT modules

In 2022, u-blox’s Wi-Fi/BT module segment experienced a 17% YoY growth, generating a revenue of nearly $57 million. The widespread adoption of Wi-Fi 6 in healthcare and industrial applications has played a significant role in the segment’s growth. Besides, u-blox’s partnership with AWS has created two innovative modules that are pre-provisioned for secure communication with AWS via Wi-Fi and cellular IoT, simplifying access to cloud services for customers. This collaboration with AWS is expected to drive the adoption of u-blox’s high-quality modules targeted at the industrial segment, increasing the company’s market share and revenue growth potential.

Cellular IoT modules

According to Counterpoint Research’s Cellular IoT Module Tracker Service, u-blox’s cellular IoT module segment grew by 37% YoY in 2022, reaching $176 million. The launch of new products in the first half of the year played a crucial role in this growth, with its smallest 4G Cat 1 modules shipping one million units within two months of launching. Its UBX-R5 LPWA chipsets are also gaining traction among customers. In the cellular LPWA chipsets market, u-blox is competing with major players such as Qualcomm, Sony and Sequans. Sony’s latest 5G LPWA chipset may create further competition for u-blox.

GNSS chips

u-blox shipped nearly 54 million GNSS chips in 2022, which contributed $131 million in revenue. The u-blox 8 series chipsets continue to be the top-selling chipset, while the new M10 chipsets are ramping up production at a rate of one million per month. Nofence is leveraging u-blox GNSS chipsets to develop GNSS-enabled livestock collars for regenerative farming.

Outlook

The company’s future strategy is to continue to lead with innovative solutions that combine chipsets and modules with services while considering socio-economic and eco-friendly factors. The ongoing adoption of electric and autonomous vehicles will be a major growth opportunity for u-blox. With a strong order book in place, u-blox is forecasting a substantial YoY revenue increase of 6% to 16% for 2023. The average analyst estimate for the 2023 revenue is $724 million, representing an 11% increase. Considering the high demand and interest for its products in the automotive, industrial and asset-tracking segments, it is probable that u-blox’s revenue will be near the higher end of the projected range.

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Ericsson-Aeris Deal Reflects Broader IoT Market Trends

Large companies Like Google, SAP, IBM, and Ericsson have quit loss-making IoT businesses.
Ericsson’s failure highlights the fragmented IoT value chain, which makes it difficult for players to capture a significant portion of the value.
Aeris is expected to benefit from the scale of its operations following the closure of the deal with Ericsson.
Further industry shakeout is expected in 2023 as an unsustainable number of players are trying to get a pie of the lucrative IoT market.

Ericsson has announced that it will be exiting the Internet of Things (IoT) market, joining a growing list of companies that have decided to quit this space. The Swedish company has agreed to sell its IoT connectivity management and connected vehicle cloud platform IoT Accelerator to Aeris for an undisclosed amount. Aeris is an MVNO purely focused on providing cellular connectivity for IoT.

Google IoT Core, SAP, Bosch Device Management, and IBM Watson are among the other major players that have decided to cease IoT operations in 2023. Ericsson’s decision is a reflection of the challenges and setbacks the company has faced in this market, as well as the broader challenges that the IoT industry has been grappling with.

Why Ericsson decided to hang up?

Ericsson’s announcement comes after several quarters of disappointing financial performance of its IoT business. Despite investing heavily in IoT technologies and solutions, the company has struggled to break even. Ericsson’s IoT business saw a loss of around SEK 1 billion ($98 million) on revenues of SEK 0.8 billion($78.6 million) in the 2022 full year. Ericsson attributes the limited returns on its investments in the IoT market to the fragmentation of the market, which has resulted in the company only capturing a small part of the value chain. As a result, Ericsson has decided to focus its resources on other areas, such as enterprise 5G and 5G private networks, that will continue to cross paths with IoT.

Aeris gets scale with acquisition

Aeris is a leading IoT MVNO having partnerships with major communication service providers such as Vodafone, AT&T, and SoftBank, as well as leading automotive OEMs. The recent deal is beneficial for Aeris as it will immediately increase the scale of its operations. Upon closure, Aeris will gain 95 million connected devices in addition to its current 5 million devices, while the number of customers is expected to increase from 400 to 9,400. The deal will also shift to Aeris Ericsson’s global connectivity agreements with 35 mobile operators. In a nutshell, Aeris will get the scale and geographical reach. However, the transaction is more like a reverse merger, which may bring new challenges for Aeris as it will have to manage operations at a much larger scale while rationalizing them to drive the combined company toward profitability.

Aeris is planning to combine its intelligent, software-defined IoT network with Ericsson’s connectivity management platform to create synergies and provide new value-added services. Aeris would be looking to bring down the operating costs by consolidating the platforms. However, execution of this strategy may be difficult, as Aeris may face the same challenges as Ericsson unless it partners with companies that bring complementary capabilities to the IoT value chain.

Our take

Despite challenges, the IoT market is expected to continue growing in the future. The increasing adoption of IoT technologies in various sectors, such as healthcare, transportation, and manufacturing, is likely to drive the market’s growth. Additionally, the development of new technologies, such as 5G and edge computing, is also expected to open up new opportunities for IoT companies.

Ericsson’s decision to exit the IoT market not only reflects the challenges and setbacks that the company has faced in this space but also the broader challenges faced by the IoT industry. These challenges include a lack of clear business objectives, a fragmented value chain, and the inability to generate decent returns on investments. This has led to many players leaving the IoT market, and it is likely that further consolidation or exits will occur in 2023. An industry shakeout would be healthy for the IoT market’s growth as an unsustainable number of players are trying to get a pie of the lucrative IoT market.

Telit’s Acquisitions to Reshape Global IoT Module Market

Can Semtech’s Acquisition of Sierra Wireless Change Offerings in IoT Space?

Siemens makes headway in its digital transformation initiative Xcelerator

IoT key to meeting Sustainable Development Goals

Global Cellular IoT Module Shipments Grew 20% YoY in Q2 2022

IoTerop Betting on LwM2M for Massive IoT Adoption

Telit’s Acquisitions to Reshape Global IoT Module Market

In recent times, Telit has acquired cellular IoT businesses from Thales and Mobilogix. The IoT module market has started consolidating and we expect to see a few more deals in the coming months. In August, we also saw Semtech acquiring Sierra Wireless to offer complete chip-to-cloud solutions to cover the entire IoT value chain. The back-to-back acquisitions by Telit show how it is trying to become an integrated player. With the Mobilogix acquisition, Telit can offer modules, connectivity, security and management platform to design and manufacturing services. It means Telit will act as a one-stop solution provider for its customers. Here, we will try to analyze what these acquisitions mean to Telit and how they will impact the IoT industry.

Telit-Thales deal

Thales is merging its cellular IoT module business into Telit to form a new entity called Telit Cinterion. Thales will own a 25% stake in the newly formed entity and offer SIM technology and security services for IoT modules.

China dominates the global cellular IoT module market by taking more than 55% share. International players are struggling to compete in the operator- and government-driven China IoT module market.

After its deal with Telit, Thales will enjoy less distraction from its module business and will be able to focus on its core business which includes software, security and services. Thales will still continue to provide eSIM services where it is a market leader.

Global Cellular IoT Module Shipments Share by Vendor, Q1 2022

The newly formed company will have a common R&D platform which will help save resources. In the coming times, we may see Telit Cinterion focusing on the IoT platform business to earn revenue on a recurring basis.

Thales has a strong position in Europe and Japan, whereas Telit has a good presence in North America and Latin America. This complementary relationship supports their dream of becoming the #1 cellular IoT player in the international market. Telit-Thales is already leading in the international IoT module market in terms of revenue. With this merger, Telit Cinterion may overtake Quectel in the international market in terms of shipments in the coming years.

Telit has already divested its automotive business in 2018, but Thales has a good customer base for some European automakers. How the joint venture treats this automotive business will be keenly watched. There is ample opportunity in the automotive business with growing connected and autonomous mobility. With the introduction of 5G, Telit may focus on the automotive segment as the automotive module business contributes higher revenue due to a higher average selling price (ASP).

In recent times, Telit has done a great job launching many new modules. This helps Telit to target new regions depending on available technologies and provides an option for customers to select a product as per their requirements.

Telit-Mobilogix deal

Telit moved to acquire Mobilogix, a decade-old end-to-end IoT hardware, software and cloud solution provider to fulfill its ambition of becoming a more integrated player and one of the largest end-to-end white-label solution providers outside China.

Mobilogix’s comprehensive device engineering expertise and resources, which focus on optimizing the specifications for EMS and ODMs, and attainment of regulatory approvals and carrier certification, will help Telit provide solutions to customers with reduced cost and complexity, and faster time to market.

Furthermore, Mobilogix is known for its expertise in customized IoT projects, which provide businesses with solutions in various application verticals that are ready to certify and mass produce. This will help Telit expand its focus in growing segments such as telematics, micro-mobility, healthcare, construction and agriculture.

Chinese module vendors are trying to become integrated players to capture maximum share across the IoT value chain. Telit is also trying to adopt such a model with these recent acquisitions. For example, Quectel is trying to increase its footprint in the North American market with the establishment of a new ODM company, named Ikotek. Similarly, Fibocom established a new ODM company in 2019 for global customers through applications such as gateway, payment terminal, telematics and industrial applications. Telit is slowly becoming vertically integrated and trying to revive back its glory days in the IoT module market.

Solutions from the combined entity will provide a great choice for customers who want to diversify and do not want to depend on the Chinese ecosystem, and need tightly integrated solution expertise from one provider.

If Telit wants to compete head-to-head with Chinese module giants like Quectel and Fibocom, it has to develop an effective business strategy for each international market.

Mobilogix has a wide range of portfolios comprising custom IoT projects and solution design services based on three basic architectures, namely beacon, power and battery-operated architecture. Apart from this, it also offers cloud platform integration and custom firmware, which will add value to Telit’s portfolio not only from cellular but also from BLE beacon hardware designs.

Mobilogix has a global presence across key regions such as the US, China, India and Latin America. Its presence in China and emerging markets like India will help Telit grow its presence in these key regions.

Conclusion

Telit is becoming a more integrated player with these acquisitions and moving up the stack to become an end-to-end solution provider. The convenient and comprehensive solutions will add more value to its customers’ IoT project deployments and will be concurrent with its long-term vision of becoming the #1 international module player in terms of both shipments and revenue.
The acquisitions will help Telit provide solutions to customers from the design/manufacturing of hardware to cloud and security with regional diversification. This will help Telit cater to more application segments, thus improving both revenue and profitability.
However, industry experts will be keenly watching the entire positioning, offering, strategy and business model, which are changing in the IoT space as you need to be a large-scale and end-to-end player to succeed even though it is a blue ocean out there.

5G AIoT Unlocking New Era of IoT

The use of IoT devices is making our daily lives smarter. IoT combined with artificial intelligence (AI), or artificial IoT (AIoT), is helping in automated real-time decision-making and data analysis. AI can add value to IoT through machine learning (ML) and improved decision-making. Similarly, IoT can add value to AI through connectivity and data exchange. With the rapid technological advancements, AIoT is transforming every industry, enterprise and consumer.

5G is going to be the key ingredient in driving AIoT applications. According to a Counterpoint Research study, the shipments of 5G AIoT-supported modules will grow at a CAGR of 84% between 2022 and 2030. Further, 60% of 5G IoT modules will have AI capability by 2030 for better processing and real-time decision-making.

AIoT applications

The adoption of AIoT is becoming an emerging technology trend across a wide range of industries where real-time data operation is needed, such as industrial manufacturing, robotics, logistics, healthcare, agriculture, smart cities and smart home.

Industrial manufacturing

Manufacturing relies on digital transformation to become more efficient and reduce human error. This sector needs to adopt AIoT solutions. AIoT-powered robots in factories improve the manufacturing process with excellent efficiency. They help reduce labor costs as well as time.

Smart cities

In a smart city, there are several uses of AIoT, such as traffic management and waste management. To avoid chaos and congestion on the road in a crowded city, AIoT-based drones help monitor traffic and transmit real-time traffic data for analyses through AI and for making decisions on the speed limit and timing of traffic lights, all without human interference. Therefore, real-time traffic monitoring by drones increases efficiency and reduces congestion.

Security and surveillance are other important applications for AI in smart cities. AI cameras can help police monitor illegal activities and prevent unwanted situations.

Autonomous vehicles

Self-driving cars are one of the best use cases of AIoT applications. IoT-enabled devices like cameras, radars and sonars in the car gather data and the AI system helps analyze this data within a few milliseconds so that the car can make decisions like a human. Fully autonomous vehicles will generate 1-2TB of data per hour and AI will be required to handle this amount of data and take some decisions at the edge.

Smart homes

AI in the connected home space is mainly used for voice assistant, situational awareness, automation and security. Starting from door locks, smoke alarm, surveillance and smart speakers to smart appliances such as lighting, thermostat, refrigerator, plugs, routers, meters, home controllers and vehicle chargers, many applications have already adopted AI features.

Challenges in implementing AI in IoT

As most AI applications are based on real-time decision-making, they need a high-speed data rate to communicate. 5G’s high speed and low latency will be ideal for AIoT applications. But in many regions, 5G infrastructure is still not there or is in the initial phase. Hence, it will be challenging to scale. Data management and taking the right decision at the right time by handling huge amounts of data will be another big challenge for AI adoption. Moreover, the security angle will also need to be addressed. Both hardware- and software-level security will be required for AIoT applications to keep connected devices safe.

Initiatives by module and chipset players in AI applications

With the increasing traction for 5G-based AIoT applications, module vendors like Fibocom, Quectel, Thundercomm and MeiG are stepping forward to launch AI-supported 5G IoT modules. Some module vendors are offering AI features at the hardware level while some vendors are offering AI features at the software level. Whether to use hardware- or software-level AI features depends on the application and cost of the project. Recently, Quectel announced that it would add software-level AI capability in its Rel 16-based 5G modules by partnering with NVIDIA. International module vendor Telit is also adding AI capabilities in its FM980 5G module through NVIDIA software. However, Quectel, Fibocom, MeiG and Thundercomm are already offering hardware-level 5G AI-supported modules for high-end applications such as C-V2X, AR/VR, robots, smart cities, live streaming, gaming and edge computing.

In terms of chipset players, Qualcomm is leading in the 5G AIoT chipset space. This year, it launched the world’s first AI-supported 5G modem Snapdragon X70. Moreover, it has broader 5G AIoT SoC offerings with the QCM6490, Snapdragon 480, Snapdragon 690 and Snapdragon 750.

The second-largest IoT chipset player, UNISOC, is trying to gain momentum for 5G through AIoT-based SoCs. So far, UNISOC is offering AIoT features in its T770, T760 and T740 chipsets.

Recently, MediaTek launched the Genio 1200 chipset, specially designed for 5G AIoT devices. It is targeting applications such as smart home, industrial, robotics and audio/video terminals.

We expect that 2023 will provide momentum to the 5G AIoT market as the IoT market has been facing some instability lately due to inflation, supply issues and other macro factors.

Qualcomm, UNISOC, ASR Lead Cellular IoT Module Chipset Market in Q1 2022

Qualcomm, UNISOC, ASR and MediaTek were the top four cellular IoT chipset vendors in Q1 2022.
4G (Cat 1 and Cat 1 bis) contributed to almost one-third of the cellular IoT module chipset shipments.
Smart meters, POS, industrial, automotive and telematics were the top five applications in the quarter.

New Delhi, San Diego, Buenos Aires, London, Hong Kong, Beijing, Seoul – July 7, 2022

Global cellular IoT module chipset shipments grew 35% YoY in Q1 2022, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application. China was the key region for cellular IoT module chipset consumption during the quarter, with China, North America and Western Europe accounting for over 75% of the volume. PC, router/CPE and industrial were the top three applications for 5G.

Commenting on the market dynamics, Research Analyst Anish Khajuria said, “Qualcomm, UNISOC and ASR held the top three positions in the global cellular IoT module chipset market in Q1 2022, accounting for nearly 75% of the total shipments. UNISOC, Qualcomm and ASR were top chipset players in China in terms of shipments. For the rest of the world, Qualcomm led, followed by UNISOC and Sequans. 4G (Cat 1 and Cat 1 bis) grew 79% YoY in this quarter.”

Qualcomm led with a 42% share and 30% YoY growth across nine out of the ten key regions globally. However, competition from local players in China, such as UNISOC and ASR, in key fast-growing segments like LTE Cat-1/Cat-1 bis and NB-IoT limited Qualcomm’s growth opportunities in the world’s largest IoT market, China. However, Qualcomm has been broadening its IoT chipset portfolio, targeting premium 4G and 5G solutions for verticals such as retail, automotive, industrial robotics and smart cities. It is also collaborating with several industry application and technology providers, including Microsoft, ZTE, BMW and Bosch, to focus on high-value artificial intelligence and 5G IoT capabilities, also termed as the 5G AIoT segment.

UNISOC, the second-largest cellular IoT chipset player globally with a 26% share in shipments, has been strong across 4G (Cat 1 and Cat 1 bis) and NB-IoT technologies. Its cellular IoT chipset shipments have continued to grow for nearly last five quarters, filling the gap which HiSilicon left in the market. Moreover, it is making steady improvements in advanced cellular technologies such as 4G Cat4+ and 5G. It has also succeeded in expanding its customer base, adding Quectel, Fibocom, China Mobile and other international module players. This helped it to capture more than one-fourth of shipments in Q1 2022. UNISOC is focused on low-end applications like smart metering, POS and industrial with stronger demand for its Cat1 bis 8910DM chipset.

ASR Microelectronics maintained its third rank in the cellular IoT chipset market in Q1 2022 due to strong performance in the high-volume 4G Cat 1 and 4G Cat 4 module segments. China continues to be the key market for ASR. The company is yet to launch NB-IoT and 5G solutions and thus will have to work on its long-term capabilities and strategy to maintain this high growth which could continue through 2025. ASR has increased its production capacity this year to meet demand. Local partnerships with several module players in 4G Cat 1 and Cat 4 technology, like Quectel, SIMCom, Neoway, Longsung and Rinlink, are helping drive the scale.

Commenting on the competitive dynamics, Vice President Research Neil Shah said, “The cellular modem chipset competition is heating up in the IoT module space with a growing number of players entering the higher-volume LPWA (LTE-M and NB-IoT) and lower-category 4G LTE (Cat 1 and Cat 1 bis) segments as incumbent players such as Qualcomm and MediaTek focus on the higher-value and more integrated 4G LTE and 5G segments. The move from a two-chip (discrete MCU + cellular modem) to an integrated SoC solution is happening as we enter the 5G era. Further, the addition of AI/ML capabilities in future advanced cellular IoT applications is also catalyzing this trend. However, the low-power and less advanced applications will continue to prevail into the next decade and we could see some adoption of SoC-based integrated solutions. But the discrete solutions will prevail, driving sizeable opportunities for the likes of UNISOC, ASR, Sequans, Sony Semi, Eigencomm, Xinyi and Nordic Semi.”

Other Players

MediaTek took the fourth position in this market. However, it is not much focused on the cellular IoT market compared to the smartphone chipset market. This is one of the key reasons for MediaTek having a 5% shipment share in this quarter. The company is also focusing on 5G enhancement and recently launched Kompanio 900T, a new 5G platform for tablets, notebooks and other IoT devices. The MediaTek T750 chipset launched earlier is growing strong in FWA and CPE devices.

Global Cellular IoT Module Chipset Shipments Share by Vendor, Q1 2022

Source: Counterpoint Global Cellular IoT Module and Chipset Tracker by Region, Q1 2022

Eigencomm registered the highest growth of 869% YoY during Q1 2022, thanks to a strong partnership with Quectel and Fibocom for NB-IoT modules. However, the brand needs to diversify in terms of supporting cellular technologies beyond NB-IoT in its portfolio as well as beyond China.

Xinyi was the second fastest growing chipset player in the market during the quarter with 230% YoY growth. Similar to Eigencomm, the company is currently focusing on the NB-IoT chipset and China region. For the near-to-mid-term, Xinyi needs to leverage its strong partnership with major module vendors such as Quectel, China Mobile, Fibocom, SIMCom, Cheerzing, Longsung, MeiG and Ai-Link and expand into newer cellular technologies to maintain the growth and market share.

Sequans was also in a growth mode in Q1 2022 with a robust 4G, LPWA and 5G chipset portfolio and rising demand in key markets such as smart meters, healthcare and asset tracking. Sequans is the world’s second chipset vendor after UNISOC to commercialize the 4G Cat-1 bis chipset to increase its share and design wins in the growing Cat 1 bis-based IoT applications.

Sony Semicon (Altair) also saw growth this quarter with solid cooperation with Sierra Wireless and Wistron NeWeb focusing on the markets for smart meters, asset trackers and smart cities. Sony is only focusing on LPWA technology with low-power and high-security features on chipsets.

For detailed research, refer to the following reports available for subscribing clients and also for individual subscriptions:

Counterpoint tracks and forecasts on a quarterly basis 1,450+ IoT module SKUs’ shipments, revenues and ASP performance across 80+ IoT module vendors, 12+ chipset players, 18+ IoT applications and 10 major geographies.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts:

Anish Khajuria

Neil Shah

Counterpoint Research

press@counterpointresearch.com

Related Reports:

Global Cellular IoT Module Shipments to Cross 1.2 Bn Units by 2030

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

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – May 9, 2022

Global cellular IoT module shipments are expected to cross 1.2 billion units by 2030 with a CAGR of 12%, according to the latest Global Cellular IoT Module Forecast from Counterpoint Research. The shipments will be mainly driven by 5G, 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.

With 5G becoming mature, we will see large module vendors such as Quectel, Fibocom, MeiG, Foxconn, Thales, Telit and Sierra Wireless consolidating their positions in the global cellular IoT module market. Longtail module vendors will struggle with scale and partnerships.

Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said, “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.

With 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.”

Commenting on the cellular IoT module application landscape, Vice-President Research Neil Shah said, “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.”

For detailed research, refer to the following reports available for subscribing clients and also for individual subscription:

Counterpoint Research tracks and forecasts on a quarterly basis 80+ IoT module vendors’ shipments, revenues and ASP performance across 12+ chipset players, 18+ IoT applications and 10 major geographies.

Background

Analyst Contacts:

Soumen Mandal

Neil Shah

Counterpoint Research

press(at)counterpointresearch.com

Related Reports:

Qualcomm Retains Top Position in Global Cellular IoT Chipset Market in Q4 2021

Qualcomm, UNISOC and ASR were the top three cellular IoT chipset vendors in Q4 2021.
NB-IoT contributed to almost a third of the cellular IoT chipset shipments during the quarter.
Smart meter, POS, router/CPE, industrial and automotive were the top five applications in Q4 2021.

New Delhi, San Diego, Buenos Aires, London, Hong Kong, Beijing, Seoul – April 12, 2022

Global cellular IoT chipset shipments grew 57% YoY in Q4 2021, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application. China continued to dominate the cellular IoT chipset market by accounting for nearly 60% of the shipments. 5G grew 392% YoY followed by 4G Cat 1 with 154% YoY growth. Router/CPE, PC and industrial were the top three applications for 5G.

Commenting on the market dynamics, Research Analyst Anish Khajuria said, “Qualcomm, UNISOC and ASR held the top three positions in the global cellular IoT chipset market in Q4 2021, accounting for nearly 75% of the total shipments. UNISOC, Qualcomm and ASR were the top three players in China. For the rest of the world, Qualcomm led the market, followed by UNISOC and Intel.”

Qualcomm led the global cellular IoT chipset market with a 38% share in terms of shipments. Qualcomm grew its share both annually and sequentially with traction across key segments such as automotive, router/CPE, retail, asset tracking and industrial IoT. However, competition from local players in China, such as UNISOC and ASR, in key fast-growing segments like LTE Cat-1/Cat-1 bis and NB-IoT limited Qualcomm’s growth opportunities in the world’s largest IoT market. However, Qualcomm has broadened its portfolio of IoT solutions, targeting specific verticals like retail, automotive, industrial IoT and smart cities. It has also launched an IoT services suite covering more than 30 verticals to enhance platform support for IoT-as-a-service (IoTaaS) applications and accelerator programs (like smart cities) with a more ecosystem-led approach bringing in different stakeholders across the value chain.

UNISOC, the second-largest cellular IoT chipset player globally, has been strong across NB-IoT and 4G Cat 1 technologies. Its cellular IoT chipset shipments growth has continued for nearly last four quarters and is able to fill the gap which HiSilicon left in the market. Moreover, it is making steady improvements in higher-end technologies such as 5G, 4G Cat 4 and above. It has also succeeded in expanding its customer base to Quectel, Fibocom, China Mobile and many more module players. This helped it to capture more than one-fourth of shipments in Q4 2021. UNISOC is focused on low-end applications like smart metering, POS and industrial. For 5G, it has launched the V510 baseband and V516 platform which are widely used in FWA routers and CPE devices.

ASR Microelectronics maintained its third ranking in the cellular IoT chipset market in Q4 2021 due to strong performance in the 4G Cat 1 and 4G Cat 4 module segments. ASR is providing strong competition to UNISOC for 4G Cat 1 and to Qualcomm for 4G Cat 4 module-based applications lately. However, ASR is yet to launch NB-IoT and 5G solutions and thus will have to work on its long-term capabilities and strategy to maintain this high growth which could remain for the next 2-3 years. The company has increased its production capacity this year to meet demand. ASR has local partnerships with many module players in 4G Cat 1 and Cat 4 technology, like Quectel, Longsung and Rinlink.

MediaTek took the fourth position in the market in Q4 2021. However, it is not much focused on the cellular IoT market compared to the smartphone chipset market. This is one of the key reasons for it to lose 4% market share sequentially in this quarter. MediaTek is also focusing on 5G enhancement and recently launched Kompanio 900T, a new 5G platform for tablets, notebooks and other IoT devices. The MediaTek T750 chipset is already quite popular for FWA and CPE devices.

Global Cellular IoT Chipset Shipments Share by Chipset Vendor, Q4 2021

Source: Counterpoint Global Cellular IoT Module and Chipset Tracker by Region, Q4 2021

Eigencomm registered a strong growth of 3743% YoY albeit on a smaller base as it struck partnerships with Quectel and Fibocom for NB-IoT module chipsets.

Sequans also registered growth with a robust 4G, LPWA and 5G chipset portfolio. The French manufacturer saw strong traction in key markets such as asset tracking, healthcare and smart meters.

Sony Semicon (Altair Semi) registered growth this quarter with a strong partnership with Sierra Wireless and Wistron NeWeb targeting smart meters, asset trackers and smart cities markets.

Samsung also launched a 5G chipset targeting automotive applications. It may provide strong competition to Qualcomm and MediaTek if it can enter a strong partnership with automakers.

Intel and HiSilicon are still supplying their leftover inventory to some of their top customers where the modules with their chipsets are designed in.

Global Cellular IoT Chipset Shipments Share by Application, Q4 2021

Source: Counterpoint Global Cellular IoT Module and Chipset Tracker by Application, Q4 2021

*Note: Figures may not add up to 100% due to rounding

Commenting on the application side of chipsets, Vice President Research Neil Shah said, “Smart meter, POS, router/CPE, industrial and automotive were the top five applications in terms of shipments in Q4 2021. PC had the maximum growth of 245% YoY, followed by smart meter with 124% YoY and router/CPE with 112% YoY growth. Router/CPE, PC and industrial were the top three applications for 5G. For NB-IoT, smart meters, asset tracking and energy were the top three applications. 4G Cat 1 is becoming popular in the POS, industrial and smart meter segments due to its high performance and low power consumption architecture. We forecast that smart meters, industrial and router/CPE will grow the maximum in the future.”

For detailed research, refer to the following reports available for subscribing clients and also for individual subscriptions:

Counterpoint tracks and forecasts on a quarterly basis 1,450+ IoT module SKUs’ shipments, revenues and ASP performance across 85+ IoT module vendors, 12+ chipset players, 18+ IoT applications and 10 major geographies.

Background

Analyst Contacts:

Anish Khajuria

Neil Shah

Counterpoint Research

press(at)counterpointresearch.com

Related Reports:

Global Cellular IoT Module Revenue Grows 58% YoY in Q4 2021; 5G, 4G Cat 1 Modules Fastest Growing

Quectel and Qualcomm led the global cellular IoT module and IoT chipset markets respectively in Q4 2021.
5G contributed to nearly a quarter of the cellular IoT module market revenue.
Automotive, router/CPE, industrial, PC and POS were the top five applications in the quarter.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – March 31, 2022

Global cellular IoT module revenue grew 58% YoY in Q4 2021, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application. 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.

Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said, “Quectel, Telit and MeiG held the top three positions in the global cellular IoT module market, accounting for 40% of the total revenue in Q4 2021. For 2021, global cellular IoT module shipments and revenue grew by 59% and 57% YoY respectively.”

Quectel’s cellular IoT module revenue grew more than 100% YoY in Q4 2021. Strong partnerships, superior service and a wide range of product offerings are supporting its growth. Quectel launched a new ODM brand, Ikotek, targeting the US market. We expect it to help Quectel increase its footprint in North America and Latin America. Moreover, the products can be customized and designed according to the regulatory requirements of a project.

Telit made a strong comeback after a relatively weaker performance in recent history. Telit has been expanding its offerings, which is helping its revival. Telit NExT is providing flexible connectivity plans across 190 countries to take advantage of emerging business models and removing major bottlenecks for many IoT device vendors. In Q4 2021, Telit’s focus on Latin America to help customers migrate legacy 2G and 3G modules to 4G Cat 1 modules helped it become the leading module supplier in the region to complement its strong position in North America.

MeiG is another Chinese player which is making continuous progress and made it to the top three in cellular IoT modules, both in shipments and revenue. It is focusing more on AIoT and smart module-based higher-end applications such as router/CPE, intelligent cockpit, video recordings, industrial PDAs, drones and AR/VR. MeiG entered lower-end applications in 2021. This product mix of higher-end and lower-end modules helped MeiG increase revenue by more than 100% in Q4 2021.

Thales, Rolling Wireless, Sunsea, Fibocom and Sierra Wireless are other key players. Out of the top 10 players, Rolling Wireless and LG are focussing on the automotive segment only.

Thales is performing well in Europe, North America and Japan targeting smart meter, healthcare and industrial applications. Sunsea improved its performance in the global IoT module market, but it wasn’t enough to prevent its share from going down. The industry is growing at a faster rate compared to Sunsea’s growth. Fibocom is showing a stronger presence in 4G Cat 1 bis technology. However, Fibocom slipped out of the top five module vendors rankings due to weaker performance of NB-IoT modules.

Rolling Wireless’s and Sierra Wireless’s revenues increased 105% and 87% respectively. After spinning off from Sierra Wireless’s automotive division last year, Rolling Wireless quickly made it to the top 10 module vendors list. Rolling Wireless and Sierra Wireless have been successful in targeting specific applications, such as automotive and router/CPE respectively.

Global Cellular IoT Module Revenue Share by Module Vendor, Q4 2021

Source: Counterpoint Global Cellular IoT Module and Chipset Tracker by Application, Q4 2021

Automotive, router/CPE, industrial, PC and POS are the top five cellular IoT applications in terms of revenue. However, drones, PC and router/CPE are the top three fastest growing segments. Smart meters is another key segment but the lower ASPs of NB-IoT and 4G Cat 1 modules mean it is not among the top five IoT applications in terms of revenue.

Global Cellular IoT Module Vendor Shipment Share Rankings by Key Geographies, Q4 2021

Commenting on the regional performance of module vendors and pricing dynamics, Vice President Research Neil Shah said, “International players made a strong comeback in Q4 2021 after weaker performance in the previous quarter. Quectel, MeiG and Sunsea were the top three cellular IoT module players in China in terms of revenue. For the rest of the world, Quectel, Telit and Thales were the top three cellular IoT module players.”

Quectel is leading in most regions except Latin America, India and Japan. However, as these regions currently represent a small share of the global cellular IoT module market, it doesn’t have much impact overall. Japan’s preference for LTE-M works against Quectel.

In China, MeiG overtook Fibocom to become the second largest cellular IoT module vendor.

Neoway, another Chinese module vendor, maintained its leading position in the Indian market. Strong partnerships with smart meter manufacturers and telematics providers are helping Neoway to maintain its position.

The overall cellular IoT module ASP increased 7% sequentially due to supply chain constraints, especially in 4G modules. Chinese chipset players are trying to reduce the 5G module ASP for mass commercialization. However, 5G adoption hasn’t picked up as expected. We see 5G peaking in the global cellular IoT module market after 2025.

For detailed research, refer to the following reports available for subscribing clients and also for individual subscription:

Counterpoint tracks and forecasts on a quarterly basis 1450+ IoT module SKUs’ shipments, revenues and ASP performance across 80+ IoT module vendors, 12+ chipset players, 18+ IoT applications and 10 major geographies

*Note: We have updated regional ranking data as per industry feedback (as of Oct 2022) which indicates Quectel led in India shipment share during Q4 2021.

Background

Analyst Contacts:

Soumen Mandal

Neil Shah

Counterpoint Research

press(at)counterpointresearch.com

Related Reports:

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