Author: Sophia
Recently, market research agency Counterpoint Research released a number of new tracking data on the cellular Internet of Things, the core information is as follows:
- The number of global cellular IoT connections increased 24% year-over-year to 3.3 billion in 2023 and is expected to exceed 6.2 billion by 2030
- The global cellular IoT connectivity market revenue grew 17% year-over-year to $13.7 billion in 2023 and is expected to exceed $26 billion by 2030
- Q2 2024 Global Cellular IoT Module Shipments Up 11% YoY and 6% QoQ
- In 2030, AI-embedded cellular modules are expected to account for 25% of all IoT module shipments, growing at a CAGR of 35%.
This article will further elaborate on this data.
Global cellular IoT connectivity up 24% year-over-year
According to Counterpoint's latest update of IoT Connections Tracker data, despite the challenges facing the cellular IoT module market, the number of global cellular IoT connections increased by 24% year-on-year to 3.3 billion in 2023. Looking ahead, the number of connections is expected to exceed 6.2 billion by 2030, growing at a CAGR of 10%.
In terms of revenue, the global cellular IoT connectivity market revenue also increased by 17% year-over-year to $13.7 billion in 2023, although ARPU will continue to decline. Counterpoint expects the global cellular IoT market to exceed $26 billion in revenue by 2030 as ARPU stabilizes "later in the decade."
Of the 3.3 billion global cellular IoT connections in 2023, the Chinese market accounts for more than 2.3 billion connections, accounting for nearly 70% of the global market share, up 26% year-on-year, and continues to dominate the global cellular IoT market landscape. As MNOs aggressively expand their IoT deployments, the number of cellular IoT connections in China has surpassed the number of mobile phone subscribers. However, it is worth mentioning that despite China's overwhelming share of cellular IoT connections, its revenue contribution to the overall global cellular IoT connectivity market is 36%.
Commenting on the development, Mohit Agrawal, director of research at Counterpoint, noted: "China continues to roll out low-cost IoT initiatives for rapid deployment. A significant portion of China's connections run on 2G and NB-IoT networks, with ARPU below $2.2 per year. Looking ahead, we expect ARPU to stabilize, especially with the advent of 5G and the growth of 4G Cat-1 bis solutions, as China continues to expand its connectivity into the automotive, smart metering, and smart retail sectors.
By application market, connected cars, smart meters, and smart retail will continue to dominate the cellular IoT segment, accounting for more than 60% of the cellular IoT market by the end of 2030. Connected cars will enhance vehicle automation and safety; Smart meters will optimize energy use and utility management; Smart retail will improve the customer experience through data-driven insights and greater security – industries that will drive the IoT and transform industries through real-time connectivity and efficiency.
In terms of network standards, Counterpoint expects 5G to account for nearly 50% of global cellular IoT revenue by 2030 as it addresses high-demand applications such as autonomous vehicles, industrial automation, and immersive smart cities.
Counterpoint also noted that the cellular IoT market is highly consolidated, with the top 10 operators overwhelmingly dominating, and this trend is expected to continue for some time. However, operators from emerging regions are gaining momentum. With the acceleration of digitalization and network expansion, these regions will expand their IoT user base, driven by the growing demand for IoT solutions.
Demand from China and India is driving growth in global cellular IoT module shipments
According to Counterpoint's latest "Global Cellular IoT Module and Chipset Tracker by Application", in Q2 2024, global cellular IoT module shipments increased by 11% year-on-year and 6% month-on-month. This growth was mainly driven by strong demand in China and India, while other markets continued to face challenges.
Among them, China saw strong growth of 25%, driven by significant expansion of POS (especially portable and small POS devices such as audio) and automotive and asset tracking applications. In contrast, markets outside of China saw a 5% year-on-year decline due to sluggish demand and overstocked client inventories. However, in markets outside of China, the automotive, telematics, routers/CPEs, and PCs sectors are also showing growth.
On the technology front, 4G Cat 1 bis has maintained its strong momentum, doubling its contribution to global shipments compared to a year ago. The average selling price (ASP) of the 4G Cat 1 bis has almost halved over the past year, making it more cost-effective in smart metering and speaker applications. ”
From the perspective of the vendor competition landscape, Quectel continues to lead the market, with China Mobile replacing Fibocom in second place, and Fibocom falling to third place - these three companies together account for more than half of the global market in Q2 2024. In markets outside of China, Telit Cinterion continues to hold the second place behind Quectel. For the first time, Lierda made the list of the top five players in the world for its outstanding performance in Cat 1 bis applications such as POS (especially audio), smart meters, and security cameras.
Commenting on the dynamics of chipset players, research analyst Subhadip Roy said: "In the global cellular IoT module chipset market, Qualcomm continues to lead the way, followed by ASR and UNISOC. ASR has seen significant growth over the years, nearly doubling its market share due to its strong performance in the 4G Cat 1 bis chipset segment, which accounted for nearly half of the market share in the second quarter of 2024. Chipset manufacturers such as Qualcomm, MLink, UNISOC, MediaTek, and HiSilicon have launched 5G RedCap chipsets. While they are being adopted early in China, United States carriers are also preparing. The launch price of the 5G RedCap module is almost double that of the 4G Cat 4 module, so it will be closely watched how pricing evolves to support the adoption of 5G RedCap technology.
AI embedded cellular IoT modules have broad prospects
AI has made great strides in recent years, especially in terms of privacy, reliability, low latency, cost-effectiveness, energy efficiency, and personalization, so Counterpoint Research is particularly bullish on the development of AI-embedded cellular modules among the various types of IoT modules. According to Counterpoint's AI Module Tracker and Forecast, AI-embedded cellular modules are expected to account for 25% of all IoT module shipments by 2030, up from 6% in 2023, at a CAGR of 35%.
The question is, what is an AI embedded cellular module? The classification of the institution is defined as follows, as detailed in the figure below:
- Basic cellular modules: These modules only have a built-in baseband or chipset and provide connectivity for networked devices to send and receive data.
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AI embedded cellular modules: can be subdivided into intelligent modules (modules with AI capabilities) and AI-enabled modules, which can be further subdivided into low-level AI modules and high-level AI modules according to AI capabilities.
- Smart Modules: Equipped with a CPU and GPU and a connected baseband, these modules focus primarily on connecting and making comparison-based data processing.
- AI-enabled modules: These modules integrate advanced processors such as CPUs, GPUs, NPUs, TPUs, or have dedicated AI engines to enhance AI capabilities. Among them, the low-level AI module provides medium AI capabilities, usually performing AI inference at a speed of less than 8 TOPS; The advanced AI module supports AI inference above 8 TOPS and can handle more complex tasks.
In terms of its definition, the connotation is the same as the connotation of the "computing power module" that Zhizi has been tracking for a long time.
Coincidentally, IoT Analytics, a well-known IoT research institution, has similarly classified modules and expressed optimism about the market prospects of AI-powered smart modules, with the following predictions:
- Traditional cellular IoT modules (similar to "basic cellular modules" above): In 2023, traditional cellular IoT modules accounted for 96% of global cellular IoT module shipments; Shipments of these modules are expected to grow at a CAGR of 18% through 2027.
- Smart cellular IoT modules (similar to "smart modules" above): In 2023, smart cellular IoT modules will account for 2% of global cellular IoT module shipments; This figure will rise to 10% by 2027, growing at a CAGR of 79%.
- AI-enabled cellular IoT modules (similar to "AI-enabled modules" above): In 2023, AI-enabled cellular IoT modules accounted for 2% of global cellular IoT module shipments; In 2027, this will increase to 9%, with a compound annual growth rate of 73%.
At present, a number of leading module companies have launched such module products to compete for this important emerging market. For example, in May 2023, Quectel said that the company's 5G module and NVIDIA's Jetson AGX Orin platform have successfully completed joint debugging to achieve 5G communication + AI edge computing capabilities. In the same year, Fibocom launched the 12 TOPS 5G high-computing intelligent module SC171 to fully meet the various AI needs of robots; Also in October 2023, Cavli Wireless, a United States cellular IoT module manufacturer, launched the CQS290 smart cellular IoT Android module and more.....
While the promise is promising, and AI-embedded cellular IoT modules will find adoption across industries, Counterpoint also points out that there are few specific applications that will specifically drive the adoption of such modules.
In the automotive industry, the rise of the digital cockpit will drive the adoption of AI-embedded cellular modules, with AI-powered virtual assistants enhancing the driving experience by responding to voice commands, managing navigation, and controlling in-vehicle entertainment systems such as music and video; In POS and retail systems, customers are increasingly opting for smart displays with AI function modules, and with the growth of AI capabilities such as face detection and gesture recognition, both low-level and high-level AI cellular modules are being integrated to help with customer behavior analysis, inventory management, and fraud detection. In the home, future AI-equipped routers could act as a central hub for managing smart home devices such as lights, thermostats, and security systems......
In addition to these applications, we will also see the adoption of AI embedded modules in drones, rugged handhelds, robotics, digital signage, security cameras, and more – with Counterpoint favoring drones and handhelds, albeit in a niche number of applications. At the same time, it also expects the automotive and POS industries to make the largest contribution to overall AI-embedded cellular IoT module shipments by 2030.
Resources:
《AI-embedded Cellular Modules to Cross 25% of All IoT Module Shipments by 2030》，Counterpoint Research
"Rising Demand from China, India Drives Global Cellular IoT Module Growth," Counterpoint Research
《Global Cellular IoT Connectivity Revenue to Exceed $26 Billion by 2030》，iotbusinessnews
《Rising Demand in China, India Fuels Global Cellular IoT Module Growth》，iotbusinessnews
September 26
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