Market Update of IoT 2021

Market Update

Despite the chip shortage and COVID-19’s extended impact on the supply chain, the market for the Internet of Things continues to grow. In 2021, IoT Analytics expects the global number of connected IoT devices to grow 9%, to 12.3 billion active endpoints. By 2025, there will likely be more than 27 billion IoT connections. 

Cellular IoT market deep dive: two billion active connections by the end of Q2 2021

The number of connected IoT devices using cellular technology grew 18% year-over-year (YoY) to reach 2 billion by the end of the first half (1H) of 2021. China Mobile, China Telecom, and China Unicom account for almost three-quarters of the market. In the past 12 months, China Telecom grew 42% and increased its market share by more than two percentage points. Vodafone continues to lead the global market outside of China with a 6% global market share. US-based AT&T grew 22% YoY and held a 4% global market share in 1H 2021. IoT initiatives in China during the last 1.5 years were much less affected by COVID-19 and, in many cases, continued as planned after a short COVID-19 lockdown.

Regarding cellular technologies, the decline of 2G and 3G IoT connections continues, while the mass deployment of 5G connections is anticipated to start this year. Fourth-generation long-term evolution (4G LTE) connections grew 25% YoY due to higher adoption of the long-term evolution category 1 (LTE-Cat 1) and LTE-Cat 1 bis subsegments.

LPWA market deep dive: licensed LPWA market now larger than unlicensed LPWA

In 1H 2020, the share of connected IoT devices using unlicensed LPWA (e.g., long range (LoRa) and Sigfox) led with a 53% share, and licensed LPWA (i.e., narrow-band IoT (NB-IoT) and LTE-machine-type communication (LTE-M)) contributed 47% of global LPWA connections. A year later, licensed LPWA leads with a 54% share, while unlicensed LPWA has a 46% share of global LPWA connections. A key reason is that NB-IoT connections grew 75% YoY in 1H 2021. NB-IoT as a single technology now dominates the LPWA connection market with 44% market share, and LoRa has slipped to second place with a 37% share of global connections.

In the last 12 months, asset tracking and monitoring were the key applications driving unlicensed LPWA growth, while growth in NB-IoT was driven by smart meters and buildings and infrastructure industry verticals.  

IoT Analytics expects that NB-IoT and LoRa/LoRaWAN will continue to dominate the market in the coming five years, with LTE-M and Sigfox in distant third and fourth places, respectively. While other technologies will continue to exist, at this point, it does not appear as though they will play a significant role in the overall global market, although they remain attractive for certain niche applications.