Cellular IoT connections to hit 5.4 billion by 2030

Joy Agwunobi

Omdia, a market research firm, has released new research that suggests that the cellular IoT ecosystem is set to undergo a major transformation in the next seven years,leading to a projected installed base of 5.4 billion connections by 2030.

The research noted that this is a dramatic increase from the current installed base of 1.1 billion cellular IoT connections and is expected to be driven by the emergence of 5G technologies. 

Omdia’s research also  predicts that the shift to cellular IoT will result in a massive increase in connections, noting that 5G RedCap, 5G Massive IoT, and 4G LTE Cat-1bis modules will play a significant role in driving this growth. 

According to industry experts, cellular IoT is a type of technology that connects physical objects, or “things,” to the internet using the same cellular network that is currently used by smartphones. Specifically, C-IoT uses existing cellular networks to connect IoT devices, eliminating the need for separate networks for IoT devices.

The Omdia research found that 5G RedCap is expected to be widely adopted from 2024 onwards. Unlike other 5G connectivity solutions, such as eMBB and uRLLC, which require high specifications, 5G RedCap is a mid-tier solution that does not require such high specifications. This makes it a more cost-effective and future-proof option for IoT devices. The research also predicted that the phase-out of 4G will begin after 2030, with 5G RedCap expected to play a key role in this transition. 

“2024 will be a pivotal year for 5G RedCap growth,” says Alexander Thompson, senior analyst for IoT at Omdia.

According to the forecast, the Asia-Pacific region will account for the majority of IoT module shipments, with over 60 per cent coming from the region by 2023. The region is also expected to account for approximately 80 percent of IoT connections in 2023. The automotive sector is predicted to be the main driver of growth, due to the increasing demand for 5G-enabled smart vehicles.

Andrew Brown, Omdia’s IoT group lead, believes application enablement platforms (AEPs) remain the leading source of revenue across the IoT value chain. Despite the growing popularity of hyperscaler offerings and financial challenges for start-ups in the current economy, Brown pointed out that pure-play AEPs are still expected to play a significant role in the IoT ecosystem. 

“Across the IoT value chain, application enablement platforms continue to be the leading revenue generator.

There remains a role for industry specific, pure-play application enablement platforms despite the exponential growth of hyperscaler offerings and financial constraints for start-ups in the current economy, Brown said.