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Insights Tag: Massive IoT

Big Role for 5G RedCap in 5G Evolution, Massive IoT Adoption

  • 5G RedCap promises a mix of capabilities including improved throughput, extended battery life and less complexity to power diverse use cases cost-effectively.
  • 5G RedCap (including eRedCap) modules are expected to contribute to one-fourth of total cellular IoT module shipments by 2030.
  • 5G RedCap will serve use cases such as wearables, medical devices, video surveillance, industrial sensors and smart grid applications.

We have come a long way from the first generation (1G) to the fifth generation (5G) of cellular connectivity. Despite being in the initial stages of its rollout, 5G is poised for adoption at a speed not seen by previous cellular standards.

However, from the IoT perspective, 5G is being considered only for high-end applications due to the higher cost and existence of many use cases which need low power and low bandwidth, currently served by LPWAN. We can see the potential that 5G brings to IoT applications in terms of faster connectivity, low latency, reliability and large capacity compared to LTE networks. These benefits make 5G valuable for certain IoT use cases, creating a need for low-end 5G for the LPWAN application.

What are 5G RedCap and 5G eRedCap?

5G RedCap (Reduced Capacity), aka NR-Lite (New Radio-Lite), is a lighter version of the 5G standard that will cater to those use cases where ultra-low latency is not essential, but there is a need for reasonable throughput to support data flows in applications like router/CPE, mass-market automotive, POS and telematics devices, which are currently addressed by LTE Cat 4. In the upcoming 3GPP Release-18, there will be another version of 5G RedCap, called eRedCap (enhanced-RedCap), which will serve the use cases currently being served by LTE Cat 1 and LTE Cat 1 bis.

Wireless technology transition and positioning of 5G RedCap

Market opportunity for 5G RedCap

5G RedCap addresses new use cases that cannot be served by advanced 5G standards like eMBB/URLLC and LPWAN. 5G RedCap chipset is already available in the market but we can expect commercial rollout by the first half of 2024. According to Counterpoint Research’s Global Cellular IoT Module Forecast, 5G RedCap modules will constitute 18% of total cellular IoT module shipments by 2030, indicating a significant market potential, particularly in developing nations where the cost is key to wide technology adoption for digital transformation.

The subsequent 5G eRedCap is planned for a 2024 introduction, with commercial availability likely by 2026. Expected to bring further innovations to the IoT segment, 5G eRedCap modules are projected to contribute 8% to the total cellular IoT module shipments by 2030.

During the transition phase, network operators will maintain IoT device support through the existing 4G network while focusing on 5G high-end applications like routers/CPE, XR/VR devices and automotive.

By the end of the decade, cellular IoT will generally migrate to 5G, driven by new use cases offered by the 5G network, with 4G serving as a fallback. The industry is already preparing for this shift, moving away from legacy technology towards newer standards.

Comparison of 5G, 5G RedCap and 5G eRedCap

5G RedCap ecosystem and applications

We can see a flurry of new announcements from ecosystem players to adopt the 5G RedCap standard. Module and chipset players are forging partnerships to capture the opportunity which will be created by 5G RedCap. Qualcomm always has been at the forefront when it comes to adopting new technologies with big potential. We can see that with its launch of the industry’s first SDX35 5G RedCap modem. Qualcomm’s early entry and partnerships with major module vendors will help it to grab more market share in 5G when the mass adoption of 5G RedCap will take place.

Announcement from module and chipset vendors for 5G RedCap

5G RedCap will serve the use cases in industrial, enterprise and consumer applications, like smart wearables, medical devices, XR glasses, health monitors, video surveillance cameras, wireless industrial sensors, utility/smart grid applications and even Fixed Wireless Access (FWA) and customer premises equipment (CPEs).

5G eRedCap is likely to be preferred for the applications served by 4G Cat 1, such as tracking devices, charging stations, micro-mobility and battery-powered sensors.

Conclusion

5G RedCap promises to broaden the 5G ecosystem, facilitating more connections. It fills the gap between LPWA and URLLC, simplifying 5G integration in IoT applications. 5G RedCap and eRedCap modules will be cost-effective, enabling OEMs to manufacture less complex, low-cost devices with lower power consumption, something that standard 5G cannot offer.

Though 5G at the IoT level is a few years out, vendors can create devices operable over LTE, with an easy switch to RedCap by changing the communication module. This allows immediate product deployment, with an easy future transition to 5G RedCap as the standard evolves.

5G RedCap’s flexibility and network advantages, including lower latency and higher speeds compared to previous LTE generations, position it as a superior choice for future mass IoT deployment. Numerous potential connections across consumer, industrial and enterprise verticals such as FWA, CPE and vehicle connectivity will greatly benefit, accelerating IoT adoption on a massive scale.

Related Reports:

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.”

Global Cellular IoT Connections Installed Base-Counterpoint Researcht

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.

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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.

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