Our Senior Research Analyst Tina Lu is moderating a session at the FWA Summit presented by Fierce Wireless on 6th December 2022. You can schedule a meeting with her to discuss the latest trends in the technology, media and telecommunications sector and understand how our leading research and services can help your business.
Topic: FIXED WIRELESS ACCESS – STATE OF THE MARKET, USE CASES & OUTLOOK
Historically, FWA deployments have been highly targeted for areas where cellular service could replace wired internet services. Greater spectrum availability and technical development of FWA architecture make this the time for FWA to hit its stride and scale, and applicable to new settings and use cases. Additionally, with the increase in 5G uptake, FWA looks poised to play a pivotal role in deploying networks at scale across all geographies, not just remote and underserved areas. In fact, In a recent study carried out by Juniper Research, they estimated that the FWA market size could reach US$2.5bn by 2027, up from US$515m in 2022. Will 5G be the key to FWA adoption in scale, and if so, in what settings will it work best to complement the existing network? How does the cost of FWA compared with deploying fixed wireline networks? Will FWA live up to the opportunity?
To get live FWA Summit updates you can watch this space or follow us on Twitter Follow @CounterPointTR
Netgear’s Q3 2022 revenue came in at the high end of its guidance at $249.2 million, with strong growth recorded in the SMB segment. The overall revenue shrank by 14% YoY, due to a decrease in demand for consumer and home products. The constraints on the supply side continue to detract from Netgear’s growth, especially in the premium consumer product segment and SMB device segments. However, it has experienced strong demand for its Orbi Mesh Wi-Fi, 5G hotspot, and latest SMB solutions.
SMB continues to lead growth for Netgear
The SMB segment once again exceeded its previous quarter’s revenue for the segment and setting a new all-time quarterly benchmark, growing 21% YoY and ending at $99 million.
While most businesses are returning to normal working patterns, the need to upgrade older networking systems is a challenge. Netgear has been one of the first to deploy the latest technology in its enterprise offerings and hence has been experiencing strong demand for its Orbi Pro Mesh Networking solutions and Managed Wi-Fi access points.
The Pro AV switches have been performing well in recent quarters, Netgear has emphasized customer support by offering specialized design teams to work with clients to understand requirements.
The Connected Home segment continues to struggle, declining 28% YoY
Netgear continues to offer a more premium range of products with the launch of the Orbi 850/860 Mesh router and M6 5G hotspot router.
The high-end mesh router market has been growing consistently in contrast to the declining overall market and Netgear has been at the forefront in this particular segment with growing demand for Orbi routers.
Service Provider revenue remained stable
Revenue from service provider channels was $42 million, similar to Q3 2021. The demand for 5G routers has been increasing as more operators are starting to offer 5G in more regions worldwide. Netgear has introduced M6 and M6 Pro 5G routers with Sub-6 and mmWave capabilities to offer high speeds a small footprint. Netgear has been engaged in signing up more operators across Europe, Oceania, and Asia for its hotspot routers.
Shipments decline by 29% YoY, and business in all regions declined YoY
Netgear shipped around 2.4 million units of wired and wireless networking devices. It shipped around 786,000 units of all types of routers and gateways. Wireless remains the dominant segment, driving the revenues with a 61% share.
Regionally, Americas declined by 13.2% YoY, EMEA declined by 21.3% YoY and APAC declined by 7.1% YoY mostly due to weakened demand in the consumer segment and currency fluctuations markets with the strengthening of the dollar against major currencies.
Margins show a sign of improvement but remain below the guidance level
The quarter saw better performance from the SMB segment as the supply chain continues to improve allowing fulfilment of pending orders, however it remains below normal levels as further orders pile up.
The operating margin improved to a negative -0.9% from -27.5% in Q2 2022 primarily due to improving supply chain and increased demand for the premium routers such as Orbi Mesh Wi-Fi and 5G hotspot routers, all of which have higher margins.
To improve the supply, Netgear continues to use air transport to offset delivery delays, but the higher costs hurt margins.
Paid Service Subscribers grow but remain below target
Services revenue was up by 14.7% annually in Q3 2022 reaching $8.5 million, Netgear has been experiencing decent demand for its service subscriptions.
Netgear is focused on increasing its services revenue by offering a multitude of services for consumers and business users such as Armor, Parental Controls, Meural, Pro Support, and Insight Pro services. Overall, Netgear crossed 22.2 million users with 15.5 million app users.
Netgear to carry momentum into Q4 2022
Netgear expects Q4 revenues in the range $235-$250 million as the supply chain will remain constrained in Q4, which would mean Netgear could finish below 2019’s annual revenue. As the brand focuses on reducing retail inventory the guidance level seems apt and it is set to cut orders for lower and mid-range consumer networking devices.
It expects the service provider revenue to reach around $50 million amid strong demand for 5G hotspot routers. Due to macroeconomic headwinds, it will continue to operate on lower margins for the next quarter.
Netgear has been consistently trying to offer more premium products to the consumer market with the latest Wi-Fi 6E technologies. It has been focusing on Pro AV switches, Orbi Mesh Routers, and Nighthawk 5G hotspot routers.
Key Takeaways:
Netgear is looking to pivot its business model with SMB taking the forefront in the coming years, potentially growing to around 50% of its total revenue by next year-end. The focus on premium-end routers is paying dividends in terms of good demand and will likely continue to do so in future.
The brand is expected to introduce products with the latest technologies such as Wi-Fi 7 and more products with 5G capabilities. For improving margins, it is focused on higher ASP products and is also offering a unique premium experience to consumers.
The average price for networking devices in the consumer market is going up, as more consumers are opting for higher-speed data services and are adding more connected devices in the home. The growing consumer awareness around internet security and threats will lead them to acquire better devices with additional software security.
Netgear will benefit from the enterprise segment as more companies will look to upgrade their existing legacy systems to Wi-Fi 6/6E/7. It also tends to push its Netgear subscription services to add more value to its products.
4G, 5G and non-cellular FWA subscriptions will reach around 26 million by 2025, with a 34.6% CAGR during 2021-2025.
US cellular FWA-CPE cumulative revenues will reach $7.6 billion by 2025.
Buenos Aires, San Diego, London, New Delhi, Hong Kong, Seoul, Beijing – August 8, 2022
In 2020, 22% of US households did not have access to fixed broadband. This number will be reduced to almost 1% by the end of 2027, according to Counterpoint Research’s latest USA 5G FWA and CPE Ecosystem Analysis and Forecast Report. In the same period, more than half of the US households that utilize VDSL/cable technology for fixed broadband will migrate to either FWA or fiber. In 2025, the US will have almost 26 million 4G, 5G and non-cellular FWA subscriptions, less than half of that of fiber.
Commenting on the operator dynamics, Principal Analyst Tina Lu said, “T-Mobile will lead the 5G FWA market by the end of 2022, with an estimated 67% share. It will be followed by Verizon with a 29% share. With T-Mobile’s layer cake approach to 5G, the company expects to reach 99% of the population by the end of 2023. Other carriers such as Verizon have been faster with their push for mmWave, but they recently changed their strategy to focus on the deployment of networks for the C-band spectrum. FWA will remain a big priority, especially expansion into rural areas where there is often one or even no provider of high-speed broadband.”
Lu added, “However, in the long run, WISPA is the main supporter of this FWA technology. Although some of these smaller players might utilize alternative FWA technology with unlicensed or lightly licensed spectrum, 4G/LTE technology will dominate FWA subscriptions till 2024. By 2025, most of the FWA subscriptions will be 5G.”
Key US FWA-CPE Facts
Source: Counterpoint Research US 5G FWA-CPE Ecosystem Analysis Report, June 2022
Commenting on the demand and supply across the ecosystem, SeniorResearch Analyst Parv Sharma said, “5G FWA CPE will offer a cumulative revenue opportunity of $7.6 billion between 2021 and 2025. Operators will have control of the bundling and distribution of devices. The initial mix of mmWave and sub-6GHz CPEs will keep the ASPs high, but with scale and a maturing 5G landscape, we estimate that ASP erosion will increase significantly. Furthermore, US operators are focusing more on the rollout of the 5G mid-band spectrum to increase the coverage.”
Discussing the FWA CPEs’ brand growth, Sharma added, “Nokia was the first 5G FWA CPE launched in the market and remains the absolute leader of the FWA-CPE market in 2021. However, operators are looking for new OEMs to expand their CPE device portfolio in the <$300 price band. Due to geopolitical considerations, US operators are preferring Taiwanese ODMs.”
LISTEN: 5G FWA Update – Connecting Next Half Billion Households
Background
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It serves 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.
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.
4G and 5G FWA subscriptions will reach around 462 million by 2030.
5G FWA will have a CAGR of 54% between 2022 and 2030
Global FWA CPE cumulative revenues to reach $200 billion between 2022-2030.
Buenos Aires, New Delhi, Hong Kong, Seoul, London, Beijing, San Diego – June 30, 2022
As 5G takes center stage, the new 5G network architectures and broader spectrum promises enhanced broadband services at a scale not possible in previous generations. Many developing economies as well as parts of developed economies still suffer from a digital divide with many unable to access broadband connectivity. We believe 5G-enabled Fixed Wireless Access (FWA) is a killer use-case for bridging this digital divide and providing connectivity where fiber or even DSL has not yet reached. We estimate the total FWA broadband subscriptions to climb to around 462 million by 2030 from roughly 75 million in 2021. 5G FWA will drive the bulk of the growth beyond 2025 replacing 4G FWA connections that will be still prevalent in some markets across MEA, developing Asia and Latin America until 2024.
LISTEN: 5G FWA Update – Connecting Next Half Billion Households
Commenting on the market dynamics, Principal Analyst Tina Lu said “By the end of 2021, only one out of every three households around the world (excluding China) had access to fixed broadband. And only 25% of those households enjoyed speeds greater than 100 Mbps. With the growing work-from-home and hybrid working and learning trends, a stable, fast and high-capacity connection has become imperative.
“In light of that, we are seeing a significant push from operators and even governments to prioritize national broadband initiatives with 5G FWA becoming integral to their 5G rollout strategies. For example, the launch of T-Mobile 5G Home Internet service in the US to provide high-speed broadband across USA trying to bridge gaps and challenge cable monopolies. Similarly, Optus in Australia has been aggressively rolling out FWA services since the beginning of 2021. Furthermore, several MNOs across Europe and the Middle East, are seeing rising adoption for 5G FWA”.
Speaking about the 5G FWA momentum and outlook, Ms Lu added, “The US is currently the single biggest 5G FWA market, with both Verizon and T-Mobile being bullish on 5G FWA with mmWave rollouts ideal for dense urban connectivity, and sub-6GHz spectrum driving broader coverage and above average throughput speeds. European operators, especially in UK and Spain are still pushing to increase fiber broadband infrastructure, thus delaying the rollout of 5G FWA networks. But the last-mile connection to fiber is very costly in rural areas, which opens the need for 5G FWA. Africa, India, and other South Asian countries (excluding China), on the other hand, have the lowest fiber penetration and thus have the most potential to drive the 5G FWA subscriber growth this decade. Latin America will also see 5G FWA services launch in the next few years to drive home broadband penetration.”
Key FWA and CPE Insight Dashboard
Source: Counterpoint Research Global 5G FWA-CPE Forecast Ecosystem April 2022
Commenting on the demand and supply across the ecosystem, SeniorResearch Analyst Parv Sharma said, “It has been a double-edged sword the last couple of years for 5G FWA adoption. While the pandemic accelerated the demand for broadband connectivity, but it also put serious pressure on MNOs CAPEX budgets slowing down 5G rollouts. The supply chain issues exacerbated the situation as the average 5G CPE prices remained in the US$500-$700 range, well-above mass market levels.
Further, the US is currently driving both sub-6GHz and 5G mmWave FWA services together with Australia, Italy, and a few Middle Eastern operators. As a result, the initial 5G CPEs ASPs have been higher.
However, the supply chain issues are expected to moderate in the second half of 2022. Further, 5G CPE prices should hit mainstream levels by mid-2023 and mass market levels by the end of 2024 supported by a growing ecosystem of CPE vendors’ from Arcadyan, Casa Systems, Askey, Inseego, Nokia, Ericsson, TCL, Wistron, ZTE and other emerging Chinese vendors, all supported by chipset solutions from Qualcomm, MediaTek and UNISOC. With greater scale and the maturation of the 5G technologies, we expect the ASP to taper quickly after 2025, driving adoption even in low ARPU markets such as India and Africa which face a significant digital divide.
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It serves 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.
The consumer demand for high-speed home broadband continues to grow at a rapid pace as companies adopt the hybrid working culture. Even personal content consumption has increased, be it for music and video streaming, gaming or other applications. And as billions of consumers across the globe continue to wait for reliable home broadband, Fixed Wireless Access (FWA) in conjunction with 5G is proving to be a great solution for last-mile connectivity.
In our previous podcast in 2020, we discussed why FWA is a killer app for 5G in helping bridge the digital divide. It’s nearly two years since, and there have been some developments with increased FWA deployments. From factors driving the growth of FWA to prices of CPE (Customer Premises Equipment) and how the ecosystem is changing with geopolitics, we discuss all this in the podcast.
In the latest episode of ‘The Counterpoint Podcast’, host Jan Stryjak is joined by Senior Analysts Tina Luand Parv Sharma to talk about the key trends in the Fixed Wireless Access space. We have also covered the 5G vs 4G FWA subscription forecast, factors that are holding back the growth of FWA in certain regions, and more.
With only 310,000 new users added during the 1Q 2022 (slightly more than Q4) Rakuten Mobile’s most pressing challenge is to boost subscriber growth. At its recent earnings call, the company unveiled numerous service initiatives, which interestingly included plans to target the business/enterprise market starting in October.
Leveraging the Rakuten Digital Ecosystem
Several initiatives to boost subscriber growth are planned during the next few months, including a new pricing plan with a focus on increasing the number of paying users. In addition, Rakuten plans to launch a series of points-based marketing campaigns designed to leverage synergies between its mobile business and other Rakuten digital services businesses.
In contrast to its rivals, Rakuten owns its own digital services ecosystem, which includes e-commerce services, banking, payment platforms, streaming video services and insurance, with around 36 million active users per month. In fact, the company claims that the main motivation behind building its own mobile network is to capitalize on the ecosystem synergies between its digital services. Rakuten thus regards mobile connectivity as an enabler to engage users in its wider digital ecosystem and the company hopes that leveraging these synergies will be more fruitful than monetization via connectivity alone. At a previous earnings call, Rakuten shared data showing the proportion of new mobile subscribers who started using Rakuten’s other digital services (e.g. Rakuten Ichiba, Card, etc.) within 12 months of subscribing to Rakuten Mobile (Exhibit 1, upper diagram).
Exhibit 1: Leveraging the Rakuten Digital Ecosystem
Rakuten also claims that this cross-marketing of services is starting to have an impact on revenues. For example, the company reported that the average annual Gross Merchandise Sales (GMS) per user for mobile users using its Ichiba e-commerce platform was 67% higher after 12 months compared to just 20% higher for non-mobile users (Exhibit 1, lower diagram). From July, the company also plans to launch a points-based, cross-business marketing campaign, in which various digital services will be offered for free on a trial basis with the award of loyalty points.
Improving Financials
With most of its 4G network deployed, Counterpoint Research believes that Rakuten Mobile’s financials should start to improve during the second half of 2022 helped by cost reductions due to lower roaming costs, lower capex expenditures and to some extent boosted by increasing revenues at its Symphony telecom platform.
Rakuten also needs to continue deploying its 5G network, which will require a much denser network than 4G. Although 2Q capex may well be less than the $1.1 billion expenditure in 1Q, Counterpoint Research believes that infrastructure spending will remain high throughout 2022 and into 2023 as Rakuten continues deploying 5G radios throughout its network. In contrast to its open-RAN brethren Dish, however, Rakuten has been reporting steadily increasing mobile revenues for several months, which the company claims will be boosted significantly by revenues from its Symphony telco business from the end of 2022 onwards.
In addition, Rakuten plans to launch a FWA broadband service on both its sub-6GHz and millimetre wave frequencies starting in December as well as a FTTH service, thus making Rakuten a fixed broadband service provider. With its extensive fibre transport network across Japan, Rakuten certainly has the capacity to offer FTTH services and continues to invest in expanding the network’s capacity. For example, in a recent test with Nokia, it achieved speeds of 1 TB/s per channel over its DWDM fiber network, an increase of 5X compared to existing 200 Mb/s transmissions.
Drive To Profitability Starts Now
In commercial terms, Rakuten’s market debut to date has been disappointing, particularly when compared to new entrants using conventional infrastructure. But with its 4G network now covering 97% of the Japanese population – and presumably offering a comparable user experience to rivals – it looks as if the company is about to embark on its first serious attempt to boost subscriber growth. Rakuten is first and foremost an Internet services company with its own digital ecosystem – an advantage that rival CSPs lack. The key question therefore is: how much of a differentiator could this really turn out to be? Although initial results shown in Exhibit 1 look promising, most of the marketing initiatives will not be launched until July and hence the full impact on subscriber and revenue growth will probably not become apparent until the end of 2022 or later.
Responding to Competitive Threats
During the next few months, Rakuten needs to demonstrate serious traction in boosting subscribers and provide investors with a credible path to profitability in its mobile business. However, Japan is an extremely competitive market and Rakuten’s deep-pocketed rivals will not be slow to respond to any new competitive threat. Already competitors are taking advantage of Rakuten’s decision to terminate its popular zero-yen plan, with KDDI’s Povo – where subscribers pay for data used rather than a flat fee – benefiting the most. Competition in the 5G market is likely to intensify as Rakuten expands its marketing initiatives across Japan. Although its mobile business will benefit from revenues from its Symphony business, the road to profitably is likely be a long haul and may take many years. Meanwhile, in the short- and possibly medium-term, Rakuten will need to raise further funds, particularly if it intends to undertake a sustained marketing campaign.
Quectel, Foxconn, China Mobile, WNC, Telit, MeiG, Sequans, Gosuncn were the fastest growing vendors in Q1 2022.
Smart Meters, POS, industrial, automotive and telematics were the top five applications in the quarter.
China, North America, and Western Europe accounted for over 75% of the volume.
San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – June 23, 2022
Global cellular IoT module shipments grew 35% YoY in Q1 2022, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application. India was the fastest growing market (59% YoY) followed by Middle East Africa, Japan, North America, China, Western Europe and Korea, all registering healthy double-digit growth. However, the largest IoT module market, China, saw demand dip by 11% QoQ due to the new wave of COVID-19 and resulting lockdowns.
Commenting on the market dynamics, SeniorResearch Analyst Soumen Mandal said, “The cellular IoT module market remains competitive, but there is growing consolidation. For example, Quectel, Fibocom and Sunsea accounted for more than half of the global IoT cellular module shipment volumes for the first time ever. This highlights the growing influence, expertise, and scale of these Chinese vendors in the fast-growing global market.
Quectel’s cellular IoT module shipments grew 77% YoY in Q1 2022 to a healthy 38% of global volume. Quectel now ships more modules than the next ten vendors combined. Quectel continues to dominate geographically with leadership in seven out of ten key markets globally. Quectel commands a strong position in 4G and NB-IoT modules. Quectel is expanding its 5G portfolio and aims to gain scale as the technology ramps.
Fibocom’s shipments grew by 24% YoY benefitting from the surging demand for 4G Cat 1 bis modules, which is one of the fastest growing segments and led by Fibocom globally. 4G Cat 1 bis is becoming a key technology targeting the 2G and 3G IoT installed base and similar applications such as POS and telematics. Fibocom is also heavily focusing on 5G AIoT based smart modules to maintain a lead in high value applications.
Sunsea AIoT which includes the brands SIMcom and Longsung, has cemented its place in the top three brands. It focuses on 4G Cat-1 and NB-IoT modules. China continues to be the key market for Sunsea; it will need to diversify if it wants to scale and grow at the same pace as its peers.
Telit captured 4.6% share and is the only non-Chinese brand in the top five players. Demand for its modules remains healthy in North and Latin America. The module mix shifted slightly with increasing demand for legacy 2G and 3G modules offsetting some volume decline in 4G modules due to supply chain constraints. Telit leads the Latin America market and is among the top three vendors in North America.
China Mobile, Sierra Wireless and u-blox improved their market share in Q1. The world’s largest EMS, Foxconn, also entered our top ten module players list with growing demand in the CPE and connected PC segments. The relationship with top device makers, potential EV business growth and a focus on 5G technology, should help Foxconn to grow in this sector in the mid- to long-term.”
Commenting on cellular IoT technology evolution, Associate DirectorEthan Qi, said, “There is a significant shift happening in the adoption and proliferation of different cellular IoT access technologies, from LPWA (NB-IoT, LTE-M) to 4G (Cat 1, Cat 1 bis) to 4G Cat 3+, 5G and upcoming 5G Redcap. This is driven not only by the wide range of different applications, but also regional and operator adoption dynamics. NB-IoT is considered a key and fast-growing technology for low power IoT applications and has been widely adopted in China and some other parts of the world. Whereas LTE-M is preferred in markets such as Japan, Australia, North America, and parts of Europe. However, we are also witnessing many regions and operators favouring 4G Cat 1 and Cat 1 bis for some mature and some new IoT applications. While most of these technologies are complimentary, operators still have to selectively invest in one over others, depending on the IoT verticals of most importance to them.
As we see 5G rolling out, many of the advanced IoT applications such as automotive, router CPEs, PCs will move to 5G from advanced 4G technologies. Furthermore, the advent of 5G Redcap will also supplant some legacy technologies such as 3G/4G in some IoT applications. So, the entire IoT ecosystem has a wide array of cellular access technology solutions to choose from depending on the applications, data requirements, cost constraints and operator dynamics in a particular market.
The technology mix also shapes the overall cellular IoT module Average Selling Price (ASP), which declined by 3% annually in Q1 due to an increasing mix of lower cost 4G Cat 1 and 4G Cat 1 bis modules. Furthermore, the 4G Cat 4+ modules are still facing supply chain constraints and the % share of 5G modules remains small contributing to the overall ASP decline. We believe the 4G module supply chain issues will moderate later this year, but the falling ASP for 5G modules will provide an option for device OEMs to either select 4G or 5G modules moving forward.”
Commenting on which IoT applications are hottest, Research Vice President Neil Shah said, “Cellular IoT powers a diverse set of applications and the number of things that can be connected to the internet continues to rise.
Smart meters, POS and industrial were the top three applications in the global cellular IoT module market in Q1 2022. These segments are contributing to nearly 40% of total cellular IoT module shipments.
Smart meter projects have restarted in many markets post-COVID and the segment is seeing strong growth with shipments doubling compared to a year ago. Meanwhile, demand in the router/CPE segment is steadily growing as the supply constraints lessen and demand increases for FWA CPEs for the work-from-home segment, and 4G/5G upgrade projects increase for enterprise-grade routers across retail, factories, offices, etc.”
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 1500+ 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.
Leaders from across a diverse range of industries assembled in San Diego this week to attend Qualcomm’s 5G Summit and discuss the opportunities and challenges presented by 5G technology. Sessions on the first day covered a range of topics, including announcements from Qualcomm president and CEO Cristiano Amon regarding the company’s plans to power the intelligent connected edge, how 5G can enable new solutions and growth for retail businesses, enterprises and industries, the role of 5G in enabling the hybrid workforce of the future, and the role of 5G connectivity in the automotive space.
Amon delivered the opening keynote address, laying out his vision of the 5G landscape and Qualcomm’s role in it. In this vision, Qualcomm is perfectly positioned to bring its technology and solutions to a whole range of devices at the edge, expanding beyond the smartphone to everything from connected PCs for the hybrid workforce to utility sensors in smart cities to robots in connected factories to connected cars. In a world where everything can be connected using the massive capacity of 5G, Qualcomm will provide the technology to connect those devices and the computational power and intelligence to unlock new use cases and efficiencies.
There were several major announcements made during the keynote that support this claim, including Qualcomm’s new Snapdragon X70 5G modem and its entry into the robotics market with the RB6 platform. Here are some of the key takeaways from the event:
Despite all the chatter surrounding Verizon and AT&T’s mid-band network buildouts in the US, Qualcomm still sees mmWave as the future of 5G
Qualcomm’s new X70 5G modem is the first of its kind to connect to standalone mmWave networks, enabling network flexibility for operators and download speeds of up to 8 Gbps for users.
MmWave deployment is more economical than other alternatives in most cities, especially in hotspots like stadiums, airports and campuses.
The capacity, low latency and bandwidth will be necessary to enable smart cities, smart factories, and more.
The X70 5G modem is expected to be launched in late 2022.
AI solutions are vital to improving 5G user experience and overcoming challenges posed by mmWave range
Qualcomm’s 5G AI Suite improved mmWave range by 20% with AI beam management, while Sub6 throughput improved by 73% at cell edge with AI-based channel state feedback and optimization.
Mobile edge compute is key to enabling real-time applications
Bringing computing closer to the end consumer reduces latency, which is key for real-time applications.
Strong mobile edge compute will be central to emerging use cases like AR, VR and the Metaverse, which require extremely low latency for the best user experience.
5G is a key last-mile broadband solution
There are some locations where fiber cannot be laid, either due to cost constraints or due to the terrain. 5G is a useful last-mile alternative that can bring gigabit speeds to homes fiber cannot reach.
FWA has taken off in the US with T-Mobile reaching over 1 million subscribers. Operators in other countries will watch closely as they plan their own FWA services.
The number of manufacturers of CPE devices is increasing fast as operators look for devices that help them deliver FWA services that are as flexible as today’s workforce.
Qualcomm announced its RB6 platform for robotics, a development kit that will help connect robots to networks in industries from manufacturing to logistics to healthcare
Qualcomm hopes to expand its partnerships with robotics companies as intelligent robots hold strong promise across the manufacturing, logistics, healthcare, agriculture and other industries.
The RB6 platform can support up to 7 concurrent cameras or 24 simultaneous video-streaming cameras using Qualcomm’s AI Engine and deliver 70-200 TOPS while still being low power.
Provides Sub6 and mmWave connectivity and supports 3GPP Release 15, 16, 17 and 18 features.
The platform, now available for pre-sale, is geared towards autonomous mobile robots, delivery robots, manufacturing robots and urban air mobility aircraft.
Snapdragon-powered connected PCs are key to the mobility needs of the hybrid workforce
Fast, secure and reliable connection for a more mobile workforce that works at the office, home, café and beyond.
As more employees work in a hybrid environment, the security of those connections is vital to protect the company’s data.
Amon’s keynote address had the themes that connected the entire summit. As 5G becomes available worldwide and continues to evolve with new releases, there are abundant opportunities for businesses and consumers to use its massive capacity, ultra-low latency and impressive bandwidth to connect nearly anything in real time. Qualcomm’s modems and RFFE solutions, as well as its compute power, are well-positioned in this changing environment to connect nearly anything to the network, and power new actionable insights that result in real efficiencies. Whether it is improving the production capacity of factories through connected sensors, the jump shots of NBA players using intelligent cameras, or the work performance of an employee’s laptop no matter where he/she chooses to work, Qualcomm has the acumen in connectivity and compute to power these developments.
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