Cellular IoT Market Size, Trends, Shares, Insights and Forecast – 2025

The global cellular IoT market size is expected to reach USD 9.65 billion by 2025, expanding at a CAGR of 21.4%, according to a new study by Grand View Research, Inc. The hype around Internet of Things (IoT) and its tremendous potential to revolutionize machine-to-machine and machine-to-human communications has reached its peak, owing to which numerous technology vendors are prodding different variants of emerging technologies to capitalize on this opportunity. With increased pervasiveness of cellular connectivity and the ready availability of its extensive networks, mobile broadband is anticipated to gain unprecedented significance in IoT.

An important aspect of the growth of cellular IoT is its ability to leverage mobility and range as compared to other IoT access methods, which can be the major differentiating factor over its contemporary service delivery techniques. In addition, cellular networks operate on the existing network infrastructure and offer reliable and quality services with assured security, which would play a vital role in their adoption in both industrial and consumer applications.

While cellular IoT primarily operates on the LTE technology, the emergence of other Low Power Wide Area Networks (LPWAN), such as LoRA and SigFox, and comparatively higher costs of cellular modules may hinder the market growth in the next couple of years. The role played by emerging technologies such as NarrowBand-IoT and NarrowBand-LTE-M will be instrumental in the hustle for gaining M2M market share. These technologies are specifically designed for IoT applications and are on the verge of commercialization with numerous pilot projects being launched in different parts of the world.

Cellular IoT offers numerous advantages such as broader coverage, deep indoor penetration, and smaller module size, owing to which it is largely preferred in high-density deployments. This is also expected to aid in the increased adoption of the technology over the next decade. Furthermore, cellular technologies, especially LTE, are supported and backed by a consortium of established industry players and various organizations such as 3rd Generation Partnership Project (3GPP) and Global System for Mobile Association (GSMA), which is expected to boost the market growth in the coming years.

Further key findings from the report suggest:

• North America is expected to maintain its dominant position in the global cellular IoT market owing to a greater penetration of next-generation LTE technologies, especially in the U.S.
• 2G holds the largest market share in terms of revenue generated; however, it is expected to gradually lose its share to emerging technologies, such as 4G, LTE-M, and NB-IoT. An interesting factor about the competing technologies, is the way in which these technologies operate in relation to each other (LTE-M vs NB-LTE-M vs NB-IoT) and whether they act as complementary or rival technologies in IoT
• Standard bodies, including 3GPP, are actively promoting the usage of cellular IoT technology and network transformation in broadband connectivity, which is expected to drive market growth and standardization over the forecast period.
• Remote monitoring, cloud connectivity, predictive maintenance, remote operation, and remote maintenance are some of the major applications being commercialized in different end-use industries.
• Numerous applications of cellular IoT are anticipated to be the most important growth driver for the market with a phenomenal increase in device shipments over the forecast period.

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A number of solutions that utilize broadband connections for machine-to-machine data transmission have been deployed in the market, with the LTE technology forming its communication backbone. As a result, advancements in "massive adoption" of LTE and technological innovations in the IoT ecosystem are considered as the key factors for the growing IoT demand over cellular networks. In addition to this, the ability to operate with local connectivity and networking technologies, such as Wi-Fi and Bluetooth, are likely to have a profound effect on these solutions’ capability to address a diverse set of IoT use cases.

Emerging applications, such as automotive connectivity, fleet management, healthcare device connectivity, and wearables, are expected to drive the growth of cellular networks. In addition, they find uses in a host of other applications, including smart metering, weather monitoring systems, personnel traffic pattern monitoring, infrastructure security systems, flood management, and agricultural management among others.

Various industry players spread across the value chain are initiating and actively supporting the growing penetration of cellular technology as the dominant connectivity standard. These initiatives have been generating considerable interest in industry stakeholders, including chipset and module manufacturers, infrastructure providers, carriers, as well as IoT solution vendors. These collaborations have been the most important factor in the rapid and widespread adoption of broadband technology in the IoT ecosystem.

Factors such as fragmentation and strong competition from LPWAN technologies, such as LoRA and SigFox, may limit the market growth for some years; however, numerous efforts taken to standardize the industry and eminent emerging venues for cellular IoT are expected to help the technology thrive in the coming years.

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The hardware segment holds a major share in the overall cellular IoT market, which can be attributed to the large number of devices that are deployed. In addition, the cellular technology is more effective in addressing IoT use cases which have massive deployments of sensors and nodes and can be easily augmented with local network connections. The hardware segment accounted for more than 65% of the overall market in 2016.

The software segment has further been divided into device management and signal processing wherein the device management sub-segment is expected to gain traction over the forecast period. As the network infrastructure for cellular connections is already in place and would require a software update for new LTE bands to be deployed, the signal processing segment is anticipated to grow at a steady rate in the coming years. The software segment is expected to grow at an impressive CAGR of 23.3% over the forecast period.

The market has been segmented based on technologies into 2G, 3G, 4G, LTE-M, NB-LTE-M, NB-IoT, and 5G. Among these, 2G held the largest market share in terms of revenue in 2016 as it caters to low-cost certifications and modem options and has largest number of users across the globe. However, 2G is expected to lose ground in the near future as standards and technologies for machine-to-machine and IoT connections are evolving quickly and offering advanced and efficient cellular services.

Technologies such as LTE-M, NB-LTE-M, and NB-IoT are expected to be commercialized by the end of 2017, and are expected to grow at a rapid rate in industrial applications. NB-LTE-M is anticipated to grow at a CAGR of 42.3% over the forecast period owing to its expected large-scale adoption in industrial machine-to-machine communication. On the other hand, 5G technology is yet to be defined but is anticipated to grow the fastest as it will cater to a host of different applications and offer a high bandwidth for high-speed applications.

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