Cellular networks are the bedrock of connecting your smartphones to the internet, allowing you to access various applications such as online navigation, social media and email. However, beyond connecting only with our friends and family, there is an increasing value in connecting with physical objects in our surrounding environment such as sensors, lights or any other IoT devices through cellular IoT.
What is Cellular IoT?
Simply put, cellular IoT is a way of connecting smart devices using the existing GSM, UMTS and LTE instead of having to create a new, private network to house your IoT devices. By doing so, it fits the requirements of low-power devices such as smart sensors, actuators or microcontrollers. Combined with the incoming 5G infrastructure, cellular IoT is therefore positioned as a dominant player in the connectivity space.
The largest benefit of cellular IoT technology is its energy efficiency. LTE-M and NB-IoT are important components of cellular IoT and both are designed to be low power communication technology and hence, an energy efficiency and power-saving solution.
Cellular IoT market and its drivers
The cellular IoT market is projected to grow from USD 3.9 billion in 2021 to USD 15.4 billion by 2027, at a CAGR of 25.7% during its forecast period. This growth can be attributed to:
New cellular-enable sensors do not require the building of new physical infrastructures and can now transfer a reasonable amount of data across considerable distances without consuming a large amount of power. Especially with the rise of 5G, cellular IoT is set to increase in popularity and usefulness. This is in comparison to previous cellular-enabled IoT devices which have high power consumption.
Increasing deployment of cellular IoT modules in smart city infrastructure and building automation. Examples include smart street lighting, smart parking, waste management, traffic sensing, infrastructure monitoring devices etc. As of 2020, approximately 30% of the cellular IoT market’s revenue were generated from these sector and its popularity can be attributed to it being an affordable and power-efficient solution for connecting battery-operated devices to the internet
Large opportunities for cellular IoT across various sectors, ranging from agricultural automation, to medical wearables, and fleet management. Cellular IoT is able to enhance performance and connectivity in these sectors by maximizing the organisation’s assets. According to a report by MarketsandMarkets’ research, the telematics solutions market is projected to reach USD 62.6 billion by 2025 from USD 29.9 billion in 2020 at a CAGR of 15.9%. Besides, cellular IoT can also be implemented for off-highway vehicles such as cranes and excavators to allow managers to easily collect and analyse data for these heavy equipment usage.
Challenges of the cellular IoT industry
Firstly, since the basis cellular IoT modules are a connectivity ecosystem, the largest challenges would be cyberattacks. With the increasing number of connected devices on a single network, cyber criminals are able to more effectively leverage on the platform vulnerabilities to carry out cyber attacks. Strong cloud-based security is thus essential to prevent data theft, device hijacking, battery drain attacks, data channel rerouting attacks, and Denial of Service (DoS) attacks.
Secondly, universal standards for cellular IoT are required to avoid any interoperability issues. The universal standards set have to be scalable and all-encompassing to ensure a variety of IoT applications, devices, platforms and softwares would be eligible for cellular IoT. To do so, the cooperation of various stakeholders such as enterprises, organisations and developers would be required. Furthermore, change at such a large scale would require some time before it is fully implemented.
5G and the future of cellular IoT
5G is positioned to transform the future of cellular IoT by operating at 10 times the speed of existent networks. In the industrial sector, secure, private 5G networks will help facilitate the workings and coordination of millions of manufacturing and logistics devices. On the consumer front, 5G can potentially unleash the potential of self-driving cars and immersive VR & AR environments by allowing fast transmission of large amounts of data.
Cellular IoT investment opportunities
Given that the hardware components such as cellular IoT modules and chipsets form the basis of the entire cellular IoT ecosystem, the increasing popularity and deployment of cellular IoT across various sectors such as medical, agricultural, smart city, automotive etc. is expected to fuel the rapid growth of the hardware segment.
Furthermore, according to a report done by MarketandMarket, China, Japan, India, and South Korea would be the major countries contributing to the growth of the cellular IoT market in APAC. Especially with China’s rapid deployment of smart city projects, the government’s favourable policies and funding for IoT related technologies, as well as Covid-19 driving the demand for smart medical wearable devices, the growth of the cellular IoT market is set to grow rapidly.