Sunsea Archives - Counterpoint

Quectel and Qualcomm dominated the cellular IoT module and chipset markets, respectively.
NB-IoT is still popular among technologies but is expected to lose some market share to 4G CAT1.bis in 2023.
5G adoption to get a boost in 2024 if ASP declines to sub-$100 and 5G RedCap-based solutions become available.
China continues to lead IoT module market, followed by North America and Western Europe.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – March 29, 2023

Global cellular IoT module shipments grew 14% YoY in 2022 to register record high annual volume, despite macroeconomic headwinds, according to Counterpoint’s latest Global Cellular IoT Module and Chipset Tracker by Application report. The resumption of smart meter implementation, ongoing retail POS upgrades, intelligent asset tracking and the continued growth in connected cars due to progress in electrification and autonomous capabilities were some of the key drivers for the double-digit percentage growth in demand for IoT modules.

China continued to lead the global cellular IoT module market in terms of demand, followed by North America and Western Europe. Meanwhile, India was the fastest growing market, followed by Latin America and North America. Although India has a smaller base, it has immense potential. Eastern Europe was the only region that registered a decline due to the prolonged Ukraine-Russia war.

Commenting on the competitive dynamics among cellular IoT module OEMs, Senior Research Analyst Soumen Mandal said, “In 2022, Quectel was the top cellular IoT module player in China, the world’s largest market for these components. Meanwhile, China Mobile and Fibocom captured second and third place, respectively, enjoying their tremendous scale in the domestic market. Outside of China, Quectel remained the leader followed by Telit and Thales which have merged and will commence operations as a new brand, Telit Cinterion, starting Q1 2023.

Quectel increased its focus in the consolidating automotive (NAD module) segment in 2022 and secured multiple design wins with major automakers. The competition in the NAD module market is intensifying as the industry transitions to 5G connectivity. With every transition of cellular technology, we have seen the market consolidate as it becomes increasingly challenging to serve the automotive segment, which requires heavy customization but garners a lower margin.

China Mobile, the world’s largest CSP and IoT connectivity player, is becoming more vertically integrated by leveraging its massive scale to capture maximum value. It has the potential to break into the top three global cellular IoT module rankings this year. However, the company primarily operates in China and will need to expand into other verticals and markets via a robust partnership model to maintain its momentum.”

Commenting on the IoT cellular connectivity chipset player dynamics, Associate Director Ethan Qi said, “Qualcomm continued to dominate the cellular IoT chipset market in 2022 with nearly 40% shipments share. Qualcomm strengthened its position in the LTE CAT 4 and higher technologies while also maintaining a dominant position in the 5G market. Qualcomm recently launched its latest 4G CAT1.bis chipset, QCX216, to compete head-on with the LTE CAT1.bis leaders UNISOC and Eigencomm.

Qi added, “In 2022, UNISOC and ASR maintained their second and third positions due to strong adoption of the fast-growing LTE CAT1.bis and CAT 1 based modules, respectively. During the year, two new players from China, Eigencomm and Xinyi Semiconductor, broke into the top five cellular IoT chipset vendor rankings, filling the gap left by Hisilicon. Eigencomm focuses on NB-IoT and 4G CAT1.bis applications while Xinyi Semiconductor focuses on NB-IoT chipsets, both being low-cost but high-volume segments.”

Commenting on the technology landscape, Mandal added, “During 2022, NB-IoT remained the most popular LPWA IoT connectivity technology followed by the fast-growing 4G CAT 1 and 4G CAT 4 modules. Together, these contributed to 60% of the total IoT module market. For most of 2022, China was under lockdown due to the resurgence of COVID-19 which drove greater demand for products such as smart door locks, digital thermometers and wearables, mostly powered by NB-IoT.

NB-IoT saw strong adoption in China but has been less popular outside the country. In contrast, 4G CAT.1bis has been gaining traction globally and has the potential to be an alternative to several NB-IoT and existing 2G/3G applications such as smart meters. However, 5G saw slower adoption in IoT than in smartphones last year due to the higher module costs. The key initial 5G applications are PCs, CPEs and some industrial/enterprise applications.

We believe 5G will enter the mainstream market once the module ASP breaks the sub-$100 barrier and receives a further boost from the 5G RedCap commercialization in coming years.”

Commenting on the IoT market outlook for 2023, Associate Director Mohit Agrawal said, “Global cellular IoT module shipments (including NAD modules) are expected to register robust growth of 19% YoY in 2023. The growth of IoT module shipments in the high-value industrial segment will be key for the IoT projects that have struggled to move beyond the pilot stage and for companies that are focusing more on ROI in a tough macroeconomic environment. Nevertheless, shipments of IoT modules for the smart meter, point of sale (POS) and the automotive markets are expected to continue seeing strong growth, which will offset a slowdown in other segments.”

The market has been undergoing consolidation across the IoT value chain from module players and connectivity management to IoT platform players. This has highlighted the importance of scale, choosing the right vertical and capturing value by striking the right partnerships or developing the right capabilities. We could see some more exits and mergers in 2023 because IoT, which is very vertical driven, has been seeing volatile growth due to internal or external factors.”

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

Counterpoint tracks 1,500+ IoT module SKUs on a quarterly basis and provides forecasts on shipments, revenues and ASP performances for 80+ IoT module vendors, 12+ chipset players and 18+ IoT applications across 10 major geographies.

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

Mohit Agrawal

Anish Khajuria

Counterpoint Research

press@counterpointresearch.com

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Seoul, Hong Kong, New Delhi, Beijing, London, Buenos Aires, San Diego

Jan 8^th, 2019

Top three players, Chinese vendor SIMCom (Sunsea AIoT), Quectel Wireless and Canadian vendor Sierra Wireless will take centre stage by competing neck to neck in volumes. However, Sierra Wireless still leads in revenue. Moving forward, 4G, LTE-M, and NB-IoT will be key volume drivers.

According to the latest research from Counterpoint’s IoT (Internet of Things) Service, global cellular IoT module shipments will grow by 79% YoY in 2018 driven by Low Power Wireless Access (LPWA) IoT applications. These applications include connected bikes, smart meters, smoke detectors, livestock etc.

Commenting on the competitive landscape in the cellular IoT module segment, Counterpoint Research Analyst, Satyajit Sinha, noted, “Unlike smartphones, the things or devices are being connected to the internet by integrating wireless IoT modules. These IoT modules which embed cellular capability have changed the entire IoT landscape by adding long-range, secure and scalable wireless connectivity. The IoT module industry has evolved a lot in the last year. The market which was once dominated by integrating low-cost 2G connectivity started transitioning to Cellular LPWA (dominated by NB-IoT) on one end and from 3G to 4G LTE/5G for higher bandwidth applications such as connected car, smart surveillance camera, etc.

The IoT cellular module market had been dominated by two suppliers, China-based SIMCom and Canada base Sierra Wireless. However, over the last 20 months, another low-cost Chinese module supplier, Quectel has grown swiftly capturing the second spot by IoT module shipments in 2018 surpassing Sierra Wireless. However, from an IoT module shipment revenue perspective, Sierra Wireless remains the market leader. However, the rise of LPWA technology such NB-IoT with growing scale in the market such as China, 2018 saw the rise of long-tail IoT module suppliers in China such as Neoway, Fibocom, Gosuncn, Lierda, Rinlink, and Yuge.”

Exhibit 1: Global Cellular IoT Module Shipments market share by Volume in 2018E

Source: Global IoT Cellular Module Tracker by Tech, by App: 2009-2025

Mr. Sinha, further added, “IoT System-on-chip (Soc)/System- in- package (SiP), where MCU is integrated with modem/baseband will be the next wave of IoT evolution and it will change the dynamics of the IoT module market. This is mainly driven by semiconductor players like Huawei, GCT, Qualcomm, MediaTek, Sequans, Nordic, Altair, etc. The player like Huawei is looking to drive NB-IoT SoCs to sub-dollar price points for example with Boudica series.”

Adding his perspective, Senior Analyst, Hanish Bhatia noted, “According to our research, global IoT cellular connections are slated to cross 5 billion bark by 2025 and NB-IoT is to contribute to nearly half. In 2018, we saw some of the cellular LPWA applications deployment adopting either LTE-M or NB-IoT depending on geography and respective operators’ LPWA network strategy. Ideally, for cost perspective, many of these applications would have been deployed cheaper NB-IoT solutions. This is being realized by some of the western operators which deployed LTE-M initially and now looking at the NB-IoT revolution in China and are adding NB-IoT to their IoT network strategy roadmap.”

Mr. Bhatia, further added, “Additionally, some operators have deployed hybrid wireless IoT networks with both licensed and unlicensed LPWA technologies such as NB-IoT/LTE-M and LoRa/Sigfox respectively. Cost and the ease of deployment using an unlicensed band are the key benefits for adopting LoRa/Sigfox technologies.”

Commenting on the latest trends of IoT module vendors, Senior Analyst, Ethan Qi, added, “Selling IoT module hardware alone is not enough anymore for the suppliers to survive. Companies like Sierra Wireless, Gemalto have benefited from bundling the modules with IoT solution integration /support services, middleware, software platform, application development toolkits, cloud platform, analytics, and end-to-end security. Even the low-cost Chinese suppliers such as SUNSEA AIoT (SIMCom+Longsun) entered into a strategic partnership with Ayla Networks to provide a cloud base IoT module. We believe this is the path to go to remain the market leader in IoT and capture maximum value across the IoT value chain.”

Exhibit 2: Global Cellular IoT Module Shipments market share by Revenue in 2018E

Source: Global IoT Cellular Module Tracker by Tech, by App: 2009-2025

Looking at future deployments, Mr Qi, added, “Industry is moving towards intelligent /smart modules always securely connected to the cloud, leveraging cloud computing. However, we will also see the increasing adoption of intelligence at the edge which is at the module level, leveraging AI driven edge computing capabilities. This edge computing is driven by top cloud computing players such as Google, Microsoft, Amazon, FogHorn, and others closely working with the number of semiconductor and module vendors such as ST-Micro, NXP, Qualcomm, silicon-labs, USI, etc.”

The comprehensive and in-depth report on “ Global IoT Cellular Module Tracker and Forecast By Technology By Application: 2009-2025” is a part of our Counterpoint’s IoT (Internet of Things) Service. This report is available for download here

Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 13 years in the high-tech industry.

Analyst Contacts:

Satyajit Sinha

satyajit@counterpointresearch.com

@Satya_Analyst

Hanish Bhatia
+91 9871849857
hanish@counterpointresearch.com

@Hanish2501

Ethan Qi

ethan@counterpointresearch.com

Counterpoint Research

press@counterpointresearch.com

@CounterPointTR