- After declining in Q1 2022, the global cellular IoT module market recovered in the second quarter of 2022 despite macroeconomic headwinds and lockdowns in China, the largest IoT market.
- The quarter also saw a series of consolidations in the highly competitive IoT module space.
- Asset tracking reached the highest share ever at 7% to rank among the top five apps.
- Smart Meters, Point of Sale and Industrial were the top three applications this quarter.
- NB-IoT and 4G Cat 1 were the most preferred technologies for cellular IoT applications.
Global cellular IoT module shipments increased 20% year-over-year in the second quarter of 2022, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application.
The global cellular IoT module market continued to recover despite a tighter supply chain, COVID-19 lockdowns in China, and macroeconomic headwinds. Growth was driven by the ongoing digital transformation involving potential applications around critical infrastructure and logistics, supported by some key low-level fast-growing cellular technologies such as Cat-1 and NB-IoT. Additionally, module players have shifted their product offerings, entering into partnerships across the value chain, from new connectivity solution providers to acquiring some key competitors, as the IoT is entering a very exciting growth phase.
China maintained its position as the world’s largest IoT market, contributing more than half of demand despite lockdowns. The country’s cellular IoT module market has recovered slightly from previous months this year, driven by lockdown-triggered applications like smart locks, surveillance systems and routers. North America and Western Europe markets have been growing steadily and occupying their second and third positions respectively in the global cellular IoT module market. Again, India was the fastest growing IoT module market (+264% YoY), albeit slower growing, driven by smart meters, telematics, point of sale and automotive applications.
Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said: “The IoT module market is going through a critical phase where Chinese brands have become bigger, which makes it very difficult for international brands to grow in silos. As a result, we have seen the first wave of market consolidation with Telit’s acquisition of Thales’ cellular IoT module business as well as the acquisition of IoT solution design company Mobilogix. Additionally, during the quarter, Semtech, a leading component supplier and leading chipset supplier for LoRa-based proprietary IoT network, acquired leading cellular IoT and router vendor Sierra Wireless to create a end-to-end wireless IoT portfolio. This kicks off an exciting phase where Western vendors are trying to become more “integrated” to capture more value across the value chain, even though the IoT market is an opportunity on the market. blue ocean. »
“With six of the top 10 IoT module vendors originating from China and with increasing geopolitical competition and data privacy concerns, international players see an opportunity to consolidate and create a dichotomy in this segment.”
“Additionally, having a strong portfolio and after-sales support is key. Telit, Thales, u-blox and Sierra Wireless improving their offerings over the past 12 months have been a step in the right direction. With consolidation, these vendors can gain scale and competitive advantage to at least be price and value competitive with the competition. »
Share of global cellular IoT module shipments by vendor, Q2 2022
Note: Figures may not add up to 100% due to rounding
The top three players accounted for more than half of the market. Interestingly, Quectel’s share of shipments was equal to that of other players in the top 10 list.
- Quectel: Quectel’s module shipments increased 47% year-on-year, further widening its gap with other players. During the quarter, Quectel launched the 4G Cat 4 smart modules SC200E and SG150H, based on Qualcomm and UNISOC chipsets respectively. Additionally, Quectel unveiled the iSIM-supported LPWA BG773A-GL module with the help of Kigen, through which it will be able to target M2M applications such as POS, smart meters, asset tracking and appliances. laptops.
- Fibocom: The second-largest module supplier, Fibocom, recorded a 12% year-on-year growth in module shipments. Nearly 60% of its module shipments came from the Chinese market. Fibocom has already entered into partnerships with Qualcomm, MediaTek, UNISOC, Sequans and Autotalks to increase its share in international markets. This may help Fibocom close some of its gap with Quectel in the international IoT module market.
- Meig: After a slow first quarter of 2022 due to lockdowns in China, MeiG recorded growth that helped it enter the top three global ranks for IoT modules. While focusing on high-end IoT module applications, MeiG is expanding into the fast-growing 4G Cat 1 bis market, targeting applications such as point-of-sale, industrial, asset tracking, smart meters and businesses. MeiG is also diversifying its supplier portfolio. It has partnered with the fast-growing 4G chipset supplier ASR for the 4G Cat 4 module market, especially for the highly competitive Chinese market and other low-cost international markets.
- China-Mobile: China Mobile maintained its fourth position in the global cellular IoT module market by tapping into its huge existing and potential customer base and vast cellular network. The operator has partnered with Xinyi Semiconductor to focus on low-end applications. This has helped both target IoT applications transitioning from 2G to 4G. China Mobile’s growing 5G footprint and partnerships across the value chain will help the world’s largest operator rapidly scale its end-to-end 5G IoT solutions over the coming quarters.
- Sun: Sunsea (SIMCom + Longsung) has steadily improved its performance over the past 10 quarters. Sunsea follows a similar strategy as other Chinese players to offer Qualcomm-based solutions for the international market and MediaTek/UNISOC/ASR/Xinyi-based solutions for the Chinese market. Sunsea has added ASR as a partner in addition to Qualcomm to meet growing demand and provide affordable pricing in China.
- telit: Telit is the first non-Chinese player in the global ranking of IoT module suppliers. Telit focuses on LPWA-Dual Mode, 4G Cat 1 and LTE-M technologies to target applications such as industry, healthcare, asset tracking, routers/CPE and energy. The vendor launched the LE910R1 industrial-grade 4G Cat 1 bis module with 2G fallback to target the APAC and EMEA markets. With the sunset of 2G and 3G technology, this module can be used as a substitute for low to mid-range applications. After the acquisition of Thales, Telit has the potential to become the largest module supplier outside of China and eventually match Quectel in size.
- Among other players, Neoway Well worked. This is the fastest growth in terms of QoQ (+162%) among the major providers. Besides China, India is proving to be an important market.
- ublox had a good quarter thanks to the remodeling and redesign of its products and the elimination of delays. Demand was strong for u-blox in industrial, automotive and medical applications.
Commenting on key trends in connectivity technologies in the IoT space, Associate Director Mohit Agrawal said, “The top five technologies including NB-IoT, 4G Cat 1, 4G Cat 4, 4G Cat 1 bis and LPWA-Dual Fashion captured more than 80% of shipments this quarter. We are seeing an increase in shipments of 4G Cat 1 and 4G Cat 1 bis modules due to the decline of 2G and 3G technologies and increased demand in low to mid-range applications. Some module players are still shipping 2G modules to meet specific low-cost applications in some emerging markets, such as Africa, Asia, and Eastern Europe. Shipments of 5G IoT modules remain stable with prices still high and many projects still in the pilot phase. It will take at least two years to reach an inflection point. We expect the second half of 2023 to see a surge of 5G IoT modules with good pan-country 5G coverage and scale.
The top five applications in Q2 2022 – smart meter, point-of-sale, industrial, router/CPE, and asset tracking – captured more than half of the total IoT module market. Compared to the previous quarter, significant improvements were seen in the router/CPE and residential markets. The automotive connectivity market did not show much traction due to the poor performance of the automotive industry in China during this quarter.
Top 10 Cellular IoT Applications Counterpoint
Counterpoint tracks and forecasts on a quarterly basis the shipments, revenue, and ASP performance of over 1,500 IoT module SKUs across 80+ IoT module vendors, 12+ chipset players, 18+ IoT applications and 10 geographies major geographies.