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Global Cellular IoT Module Shipments Decline 3% YoY in Q2 2023

Quectel and Fibocom maintained their market leadership while China Mobile overtook Telit Cinterion to become the third largest player.
The top three applications accounted for around 51% of shipments in Q2 2023 compared to 41% in Q2 2022.
For the full year 2023, global cellular IoT module shipments are expected to remain almost flat compared to 2022.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Taipei, Seoul – October 16, 2023

Global cellular IoT module shipments saw a 3% YoY decline in Q2 2023, according to Counterpoint’s latest Global Cellular IoT Module and Chipset Tracker by Application report. The decline was driven by factors such as lower demand and weaker economic sentiments. Barring the top three applications – smart meters, point of sale (POS) devices and automotive, most segments experienced a sharp drop in shipments. The top three applications – smart meters, POS devices and automotive – accounted for about 51% of the market in Q2 2023. India was the only market to register positive shipment growth for the quarter.

Commenting on the market dynamics, Associate Director Mohit Agrawal said, “In Q2 2023, many of the module players experienced shipment declines as the market shrunk for the first time since the start of COVID-19. The pandemic-induced demand for connected devices is wearing off while the digital transformation efforts in industrial and other key verticals are yet to translate into shipments. Quectel’s revenue from international markets surpassed its revenue from China. Chinese module vendors are increasingly coming under US scanner for security concerns. This scrutiny could potentially challenge their global expansion plans, paving the way for other vendors to seize more opportunities.”

Quectel, the leading module vendor, experienced a decline in its market share due to weakened demand.
China Mobile, with strong performance in smart meter, POS and asset tracker applications, overtook Telit Cinterion to become the third largest player in the global cellular IoT module market.
Telit Cinterion faced challenges due to the market downturn. With India expected to be the fastest-growing market by 2030, Telit recently partnered with VVDN to produce IoT modules in the country and increase its presence there.

Commenting on the future outlook, Senior Research Analyst Soumen Mandal said, “IoT module shipments for the full year of 2023 are expected to remain flat compared to 2022. The IoT module market’s performance in H2 2023 will be better than in H1 2023 as the market is showing early signs of recovery. However, the lower demand is influencing the market’s long-term growth trajectory, with the current demand shifting by 2-3 years.”

Mandal added, “The adoption of 5G technology has been slower than expected, primarily due to its higher costs, coverage issues and maturity of the 5G device ecosystem. The forthcoming 5G RedCap has the potential to become the industry’s game changer by offering a more affordable solution. Early adoption of 5G RedCap is expected in POS and router/CPE applications.”

For detailed research, refer to the following reports available for subscribing clients and individuals:

Counterpoint tracks 1,500+ IoT module SKUs on a quarterly basis and provides forecasts on shipments, revenues and ASP performances for 80+ IoT module vendors, 12+ chipset players and 18+ IoT applications across 10 major geographies.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the technology, media and telecom (TMT) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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Quectel, Telit Cinterion, Fibocom Capture More Than Half of Cellular IoT Module Shipments in Q1 2023

Quectel maintained its dominant position globally and in China, the largest IoT module market.
The newly merged entity Telit Cinterion climbed to the second spot. It was followed by Fibocom.
The top three applications – smart meter, POS and router/CPE – formed more than half of the total shipments.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Taipei, Seoul – July 19, 2023

Global cellular IoT module shipments (excluding automotive embedded and telematics modules) remained flat in Q1 2023 when compared to the same period of last year, according to Counterpoint’s latest Global Cellular IoT Module and Chipset Tracker by Application report. However, when compared to Q1 2020, the shipments more than doubled in Q1 2023. Quectel, Telit Cinterion and Fibocom captured more than half of the total cellular IoT module shipments in Q1 2023.

The demand for cellular IoT in applications such as smart utilities, payment terminals and FWA CPE routers and gateways remained healthy during the quarter. But the demand for cellular modules across enterprise digital transformation and industrial projects remained soft. With current uncertain market scenarios, enterprises are being cautious with their expenditures. China and India registered positive growth in shipments while the US, Latin America, Japan, South Korea and Eastern Europe saw a YoY decline.

Commenting on the market dynamics among cellular IoT module OEMs, Senior Research Analyst Soumen Mandal said, “The cellular module market is going through a unique transition both regionally as well as technologically, with the two being intertwined. Low-power and low-cost technologies such as LTE-M, NB-IoT and LTE CAT-1 (and 1 bis) are seeing rapid adoption in China. This has driven a flood of chipset and module providers catering to the strong push from all the stakeholders for the adoption of cellular IoT at scale. On the other hand, we are seeing rapid consolidation and exits of cellular module vendors in markets outside China, where the technology adoption is fairly fragmented and varies across geographies. 5G will further drive consolidation in a couple of years. Therefore, these underlying dynamics are shaping the competitive landscape differently in China and the rest of the world.”

Globally, Quectel led the cellular IoT module market in Q1, followed by the newly merged entity Telit Cinterion, formed after the acquisition of Thales’ cellular IoT module business by Telit last year. The third spot was taken by another China-based fast-growing player Fibocom. Together, these three players held over half of the market’s shipments in Q1. Among the leading IoT module vendors, Neoway demonstrated the highest growth, followed by u-blox. The world’s largest IoT telecom operator in terms of connections, China Mobile, maintained its second position in the Chinese market. Among other vendors, Unionman entered the top-five module vendors list in China, thanks to its impressive performance in NB-IoT and 4G Cat 1 bis modules.

Quectel maintained its leadership position in its domestic market China as well as globally. Its lead in the Americas, India and MEA regions also contributed to its strong position. All this helped Quectel widen its shipment share gap with the nearest competitor. The company’s strong performance is being driven by its broader, integrated portfolio and strong on-the-ground Field Application Engineering (FAE) support.
Telit Cinterion climbed to the second position in the global market after the merger, helping the erstwhile Telit bridge the gap with Quectel in the international market excluding China. Telit Cinterion is now one of the largest Western IoT Vertically integrated to some extent, Telit Cinterion enjoys a strong position in high-value North American and European markets and will further expand in other high-scale markets in the near- to mid-term.
Fibocom experienced impressive growth in Q1 2023 to stand out among the top three global players. Its presence in the router/CPE and POS segments helped Fibocom enter the top-three list for China and the top-five list for international markets excluding China.

Among the top 10 applications, the smoke detector experienced the highest growth, followed by the residential and smart meter segments. The top three applications in terms of shipments – smart meters, POS systems and router/CPE solutions – collectively contributed to more than half of the cellular IoT market.

Commenting on the IoT market outlook for 2023, Associate Director Mohit Agrawal said, “The global cellular IoT module market is expected to witness subdued growth this year as the 4G/5G cellular module growth remains muted due to higher ASP. However, we expect the demand for cellular IoT modules to rebound in the coming years. The mass production of affordable 5G RedCap-based modules, scheduled for the end of this year, is expected to drive the adoption of 5G in the IoT module market. Applications such as smart meters, POS, and router/CPE solutions will play a crucial role in driving both the value and volume of the IoT module market in coming years and will be key focus segments in the near- to mid-term. In the longer term, the demand for IoT modules will be driven by massive IoT applications and the industrial segment. It is projected that IoT module shipments will grow at a compound annual growth rate (CAGR) of 11% between 2023 and 2030.”

* The IoT module here encompasses all applications supported by cellular IoT modules, except for automotive and telematics applications.

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Mohit Agrawal

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Global Cellular IoT Connections to Cross 6 Billion in 2030

Global cellular IoT connections grew 29% YoY to reach 2.7 billion in 2022 with 4G continuing to grow its majority share.
China held more than two-thirds of total cellular IoT connections in 2022, followed by Europe and North America.
NB-IoT dominates in China, while LTE-M is preferred in Australia, Japan and North America; Europe supports both.
4G and NB-IoT are the most preferred technologies for cellular IoT applications.
5G is nascent as module prices and breadth of applications reflect early-stage dynamics.
IoT growth drivers are shifting, with the enterprise and transformation initiatives key in propelling IoT connections forward.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – June 12, 2023

Global cellular IoT connections grew strongly at 29% YoY to reach 2.7 billion in 2022, according to Counterpoint’s latest Global Cellular IoT Connections Tracker report. They are expected to grow at a CAGR of 10.8% to reach an installed base of over 6 billion by 2030. China held more than two-thirds of total cellular IoT connections in 2022, followed by Europe and North America.

Amid the challenges faced by various industries, such as inflation, macroeconomic headwinds and supply chain constraints, the cellular IoT market has experienced remarkable growth fuelled by the digital transformation initiatives undertaken by various industry applications like smart meters, automobiles and asset tracking in particular. Cellular IoT connectivity has played a significant role in enhancing productivity, streamlining operations, minimizing downtime, automating processes and generating cost savings for industries. The COVID-19 outbreak unexpectedly proved beneficial for enterprise IoT players, accelerating their digital transformation efforts.

Commenting on the cellular IoT connectivity technology dynamics, Senior Research Analyst Soumen Mandal said, “At the end of 2022, 4G and NB-IoT together accounted for nearly 90% of the installed base of cellular IoT connections. 4G emerged as the most preferred technology for cellular IoT connections after surpassing 2G and 3G-based IoT connections in 2016. NB-IoT has gained significant popularity in China, while Japan, Australia and North America prefer LTE-M technology for lower-end applications. Europe has adopted a combination of NB-IoT and LTE-M, supported by roaming services offered by most operators.

In recent times, 4G Cat 1 bis technology has gained significant popularity over NB-IoT due to its superior performance. Applications such as POS, telematics and smart meters are increasingly adopting this technology on a larger scale. The rising shipments of devices based on 4G Cat 1 and 4G Cat 1 bis technologies are contributing to the stagnant market growth of NB-IoT.

5G is still nascent but we expect 5G-based applications to pick up as the module ASP (average selling price) drops to sub-$100 and more 5G RedCap-based solutions become available in the market. The introduction of 5G RedCap and 5G eRedCap will play a crucial role in driving mass adoption of 5G, particularly in developing and underdeveloped countries.”

Commenting on the market outlook, Research Vice President Neil Shah said, “The global cellular IoT connections installed base is expected to surpass 6 billion by 2030 with a CAGR of 10.8%. The growth will be mainly driven by cellular connectivity adoption across various sectors such as utilities, automotive, industrial, retail and healthcare. Unlike the previous decade, where consumer devices like smartphones and PCs played a significant role in driving cellular connections, this decade will see a shift towards cellular connections being propelled by the digital transformation initiatives undertaken by enterprise IoT payers. The widespread adoption of cellular connectivity will also contribute to a further reduction in prices for cellular-connected devices, making them more competitive against alternative non-cellular connectivity technologies like LoRa, Sigfox and Wi-SUN. Over the past year, the cellular IoT industry has witnessed many consolidations, including Telit’s acquisition of Thales’ cellular IoT business, Semtech’s acquisition of Sierra Wireless, and Aeris Communications’ acquisition of Ericsson’s IoT accelerator and connected vehicle cloud business. As the cellular IoT module market continues to mature, we can expect more consolidations aimed at providing improved solutions and maintaining competitiveness against other non-cellular connectivity technologies.”

The comprehensive and in-depth ‘Global Cellular IoT Connections Tracker, 2022’ report is now available for purchase at report.counterpointresearch.com.

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

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Soumen Mandal

Neil Shah

Mohit Agrawal

Counterpoint Research

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PAX Revenues Cross $1 Billion in 2022; SmartPOS Adoption Supports Growth

The growth was primarily driven by the strong performance of Android-based payment terminals.
PAX’s expertise in Android SmartPOS technology and its MAXSTORE platform offers a centralized and seamless way for merchants to navigate an increasingly complex business.
PAX is expected to maintain its leading position in Android SmartPOS payment solutions.

PAX Global Technology, one of the world’s leading providers of electronic payment terminal solutions and related services, posted strong revenue of $1,003 million in 2022, showing great resilience in a period of economic challenges such as interest rate hikes and higher inflation. The growth was primarily driven by the strong performance of Android-based payment terminals. Fintech is playing a central role in the advancement of digital and cashless economies by providing greater efficiency, convenience and accessibility to consumers. However, PAX’s software-as-a-service (SaaS) solutions such as the MAXSTORE platform are enabling payment service providers (PSPs) and acquiring bank (financial institution that processes credit or debit card transactions on a merchant’s behalf) to combine core payment services with financial and non-financial applications in a much more flexible and cost-effective way.

Merchants can operate digitally and process orders more efficiently with the use of Android SmartPOS terminals. These terminals also provide valuable insights into consumer behavior, enable the development of automated marketing campaigns, and help to manage inventory more effectively, among other benefits. PAX’s expertise in Android SmartPOS technology and its MAXSTORE platform offers a centralized and seamless way for merchants to navigate an increasingly complex business. The MAXSTORE platform had well over 8 million managed devices by the end of 2022.

Key regional developments

Europe, Middle East and Africa (EMEA)

EMEA region clocked $319 million in revenue in 2022, an increase of 5% compared to 2021.
The growth was primarily driven by the large-scale adoption of Android SmartPOS devices across EMEA, primarily in Europe and the Middle East.
PAX’s partnerships with leading acquiring banks, PSPs and independent sales organisations (ISOs), and tailored solutions for the European market drive its growth across the region. The UK, Italy and Germany have increasingly become important growth drivers for PAX. Significant gains were made in France, Greece, Scandinavia, Balkans, Poland, Spain and Turkey.
Saudi Arabia’s ‘Vision 2030’ program for economic reform and the Saudi Arabian Monetary Authority’s (SAMA’s) openness to innovative technology finance across the Gulf Cooperation Council (GCC) and North Africa continues to accelerate the upgrade of legacy point-of-sale (POS), driving a big growth for PAX Android SmartPOS devices.

Latin America and Commonwealth of Independent States (LACIS)

LACIS region posted $385 million in revenue, a decline of 8% YoY. PAX experienced strong growth in this region in 2021, a major reason for the dip in 2022. However, PAX has a diversified product portfolio and a well-established channel partner network which can help increase its footprint in the region.
Brazil, Chile and Argentina are the major contributors to the growth in the region with increasing demand for Android SmartPOS solutions in sectors like multilane, hospitality and parking.

Asia Pacific (APAC)

APAC region recorded steady growth of 5% YoY with $172 million in revenue. PAX has expanded its footprint to more Asian countries.
India and Japan continued to show positive demand for Android-based smart payment terminals, which is expected to propel further growth.
Indonesia, Singapore and Thailand were the major contributors with double-digit revenue growth compared to the previous year. In Indonesia, sales were driven by the government’s ‘Payment System Blueprint 2025’ initiative, which is helping improve the nation’s core payment infrastructure.
PAX Technology, established as a Singapore subsidiary in 2021, focuses on local merchants and financial institutions. Singapore government’s ‘Retail Industry Transformation Map 2025’ is encouraging retailers to adopt innovative business models, which is expected to drive the demand for smart payment terminals.

United States and Canada (USCA)

USCA region posted a robust revenue of $127 million, up 35% YoY driven by PAX’s partnerships with PSPs and ISOs, and its expertise in Android SmartPOS solutions.
PAX Android smart payment terminals offer seamless integration and diversified payment methods such as mobile wallets, online ordering, curbside pickup and self-service ordering and checkout, which adds convenience for businesses operating in the retail, supermarket, hospitality and unattended segments.

Key takeaways

PAX is expected to experience greater adoption in the future, thanks to its ongoing investment in the research and development (R&D) of Android payment terminal technology. PAX spent $72 million on R&D in 2022, which was nearly 7% of its total revenue. Its terminals are user-friendly and offer a range of payment options, which makes them attractive to merchants.
However, POS vendors are now focusing on cloud-based software solutions to earn recurring revenue, increase profitability and offer better solutions to customers.
Along with strong payment solutions, partnerships play a crucial role in the fintech industry. PAX is also determined to strengthen its international sales network and customer relationships across geographies.
Due to ongoing economic challenges like interest rate hikes and high inflation, and geopolitical tensions, PAX is expecting flattish or lower-single-digit revenue growth in 2023.
With its strong portfolio across different sectors catering to different needs of merchants and businesses in different regions, PAX is expected to maintain its leading position in Android SmartPOS payment solutions.

Global Cellular IoT Module Shipments Jump 14% YoY in 2022 to Reach Highest Ever

Quectel and Qualcomm dominated the cellular IoT module and chipset markets, respectively.
NB-IoT is still popular among technologies but is expected to lose some market share to 4G CAT1.bis in 2023.
5G adoption to get a boost in 2024 if ASP declines to sub-$100 and 5G RedCap-based solutions become available.
China continues to lead IoT module market, followed by North America and Western Europe.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – March 29, 2023

Global cellular IoT module shipments grew 14% YoY in 2022 to register record high annual volume, despite macroeconomic headwinds, according to Counterpoint’s latest Global Cellular IoT Module and Chipset Tracker by Application report. The resumption of smart meter implementation, ongoing retail POS upgrades, intelligent asset tracking and the continued growth in connected cars due to progress in electrification and autonomous capabilities were some of the key drivers for the double-digit percentage growth in demand for IoT modules.

China continued to lead the global cellular IoT module market in terms of demand, followed by North America and Western Europe. Meanwhile, India was the fastest growing market, followed by Latin America and North America. Although India has a smaller base, it has immense potential. Eastern Europe was the only region that registered a decline due to the prolonged Ukraine-Russia war.

Commenting on the competitive dynamics among cellular IoT module OEMs, Senior Research Analyst Soumen Mandal said, “In 2022, Quectel was the top cellular IoT module player in China, the world’s largest market for these components. Meanwhile, China Mobile and Fibocom captured second and third place, respectively, enjoying their tremendous scale in the domestic market. Outside of China, Quectel remained the leader followed by Telit and Thales which have merged and will commence operations as a new brand, Telit Cinterion, starting Q1 2023.

Quectel increased its focus in the consolidating automotive (NAD module) segment in 2022 and secured multiple design wins with major automakers. The competition in the NAD module market is intensifying as the industry transitions to 5G connectivity. With every transition of cellular technology, we have seen the market consolidate as it becomes increasingly challenging to serve the automotive segment, which requires heavy customization but garners a lower margin.

China Mobile, the world’s largest CSP and IoT connectivity player, is becoming more vertically integrated by leveraging its massive scale to capture maximum value. It has the potential to break into the top three global cellular IoT module rankings this year. However, the company primarily operates in China and will need to expand into other verticals and markets via a robust partnership model to maintain its momentum.”

Commenting on the IoT cellular connectivity chipset player dynamics, Associate Director Ethan Qi said, “Qualcomm continued to dominate the cellular IoT chipset market in 2022 with nearly 40% shipments share. Qualcomm strengthened its position in the LTE CAT 4 and higher technologies while also maintaining a dominant position in the 5G market. Qualcomm recently launched its latest 4G CAT1.bis chipset, QCX216, to compete head-on with the LTE CAT1.bis leaders UNISOC and Eigencomm.

Qi added, “In 2022, UNISOC and ASR maintained their second and third positions due to strong adoption of the fast-growing LTE CAT1.bis and CAT 1 based modules, respectively. During the year, two new players from China, Eigencomm and Xinyi Semiconductor, broke into the top five cellular IoT chipset vendor rankings, filling the gap left by Hisilicon. Eigencomm focuses on NB-IoT and 4G CAT1.bis applications while Xinyi Semiconductor focuses on NB-IoT chipsets, both being low-cost but high-volume segments.”

Commenting on the technology landscape, Mandal added, “During 2022, NB-IoT remained the most popular LPWA IoT connectivity technology followed by the fast-growing 4G CAT 1 and 4G CAT 4 modules. Together, these contributed to 60% of the total IoT module market. For most of 2022, China was under lockdown due to the resurgence of COVID-19 which drove greater demand for products such as smart door locks, digital thermometers and wearables, mostly powered by NB-IoT.

NB-IoT saw strong adoption in China but has been less popular outside the country. In contrast, 4G CAT.1bis has been gaining traction globally and has the potential to be an alternative to several NB-IoT and existing 2G/3G applications such as smart meters. However, 5G saw slower adoption in IoT than in smartphones last year due to the higher module costs. The key initial 5G applications are PCs, CPEs and some industrial/enterprise applications.

We believe 5G will enter the mainstream market once the module ASP breaks the sub-$100 barrier and receives a further boost from the 5G RedCap commercialization in coming years.”

Commenting on the IoT market outlook for 2023, Associate Director Mohit Agrawal said, “Global cellular IoT module shipments (including NAD modules) are expected to register robust growth of 19% YoY in 2023. The growth of IoT module shipments in the high-value industrial segment will be key for the IoT projects that have struggled to move beyond the pilot stage and for companies that are focusing more on ROI in a tough macroeconomic environment. Nevertheless, shipments of IoT modules for the smart meter, point of sale (POS) and the automotive markets are expected to continue seeing strong growth, which will offset a slowdown in other segments.”

The market has been undergoing consolidation across the IoT value chain from module players and connectivity management to IoT platform players. This has highlighted the importance of scale, choosing the right vertical and capturing value by striking the right partnerships or developing the right capabilities. We could see some more exits and mergers in 2023 because IoT, which is very vertical driven, has been seeing volatile growth due to internal or external factors.”

For detailed research, refer to the following reports available for subscribing clients and individuals:

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Soumen Mandal

Mohit Agrawal

Anish Khajuria

Counterpoint Research

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Despite China’s Failure to Recover in Q3 2022, Global Cellular IoT Module Market Experiences Growth

China led the global cellular IoT module market in Q3 2022 despite losing volume share. China was followed by North America and Western Europe.
Smart meter, POS, automotive, industrial and router/CPE were the top five applications in terms of volume this quarter.
Automotive, router/CPE, PC, industrial and POS were the top five applications in terms of value this quarter.
The top three technologies in terms of volume were NB-IoT, 4G Cat 1 and 4G Cat 4. They captured more than 60% of the total volume in Q3 2022.
The top three technologies in terms of value were 5G, 4G Cat 4 and 4G Other. They captured nearly two-thirds of the total value in Q3 2022.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – December 27, 2022

Global cellular IoT module shipments grew by only 2% YoY in Q3 2022, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application. China led the market followed by North America and Europe. China’s shipments decreased 8% YoY in this quarter due to a resurgence of COVID-19 cases. However, some of this demand decline was offset by an increase in the residential, smart door lock, patient monitoring, registrar device, smoke detector, drone, smart meter and automotive applications. Other markets such as North America, Western Europe, India, Japan, Latin America, and Middle East and Africa witnessed healthy growth.

Commenting on the competitive landscape, Associate Director Ethan Qi said, “Quectel is leading the cellular IoT module market, followed by Fibocom, Sunsea AIoT, China Mobile and MeiG. China is dominating this market with all the top five IoT module vendors being from the country. In the past few months, we have seen some consolidation among international players, like Telit taking over Thales’ IoT business and Semtech acquiring Sierra Wireless in the IoT module space to remain resilient against Chinese module vendors. With the increasing adoption of IoT technologies in various sectors, many players will consolidate to get bigger value from this fragmented value chain.”

Commenting on the important underlying technology dynamics shaping the entire IoT ecosystem, Senior Research Analyst Soumen Mandal said, “The IoT module market is undergoing changes as demand for low-end technologies like 2G and 3G declines and shifts towards 4G Cat 1 and 4G Cat 1 bis, where higher-end applications are upgrading from 4G to 5G. In this quarter, the top three technologies in terms of shipments – NB-IoT, 4G Cat 1 and 4G Cat 4 – accounted for over 60% of the total shipments. However, in terms of revenue share, 5G, 4G Cat 4 and 4G Other were the top three technologies and held nearly two-thirds of the total revenue. The lower-end technologies such as NB-IoT, 4G Cat 1 and 4G Cat 1 bis are helping connect a greater number of IoT devices, while higher-end technologies like 4G Cat 4, 4G Other and 5G are adding more value to the IoT ecosystem. This is why the automotive, router/CPE, PC and industrial segments, which rely mostly on higher-end technologies, are generating more revenue.

During this quarter, we saw some 4G Cat 1 and 4G Cat 1 bis-based applications being replaced with NB-IoT. Chinese NB-IoT chipset companies Eignecomm and Xinyi have improved their partnerships with module players, particularly in the domestic market. Besides, there were few options available for 4G Cat 1 bis chipsets in international markets, with Sequans being the exception. Last week, Qualcomm entered the 4G Cat 1 bis market by launching the QCX216 chipset in partnership with Quectel, Cavli Wireless and MoMAGIC. We believe that 4G Cat 1 bis technology will start to gain traction as leading IoT module and chipset players focus on it for use in massive IoT applications.”

Mandal further added, “Despite slower growth in IoT module shipments, IoT module revenue increased by 12% YoY in Q3 2022 due to a higher mix of 5G and 4G Cat 4 modules. The average selling price (ASP) of all types of 4G technologies and LTE-M continued to rise, while the ASP for 2G, 3G, 5G and NB-IoT technologies decreased. It is believed that 2023 will be a breakthrough year for 5G, and the ASP may decrease to below $100, which will help facilitate wider adoption.”

Commenting on the key application trends in the IoT space, Associate Director Mohit Agrawal said, “The top 10 applications in the market captured more than 80% of shipments this quarter, with the top five being smart meters, POS, automotive, industrial and router/CPE. Smoke detectors saw the fastest growth, followed by residential applications and drones. China was a driving force in the growth of all three of these fast-growing segments, fuelled by a resurgence of COVID-19 cases in the country. Among the top five applications, industrial and router/CPE applications saw a decrease in shipments both on a sequential and yearly basis. However, the industrial segment still presents a large opportunity due to the number of companies embarking on digital transformation projects.”

For detailed research, refer to the following reports available for subscribing clients and individuals:

Counterpoint tracks and forecasts on a quarterly basis 1,500+ IoT module SKUs’ shipments, revenues and ASP performance across 80+ IoT module vendors, 12+ chipset players, 18+ IoT applications and 10 major geographies.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Soumen Mandal

Mohit Agrawal

Counterpoint Research

press@counterpointresearch.com

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Quectel, Fibocom & Sunsea Capture Half the Cellular IoT Module Market in Q1 2022

Quectel, Foxconn, China Mobile, WNC, Telit, MeiG, Sequans, Gosuncn were the fastest growing vendors in Q1 2022.
Smart Meters, POS, industrial, automotive and telematics were the top five applications in the quarter.
China, North America, and Western Europe accounted for over 75% of the volume.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – June 23, 2022

Global cellular IoT module shipments grew 35% YoY in Q1 2022, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application. India was the fastest growing market (59% YoY) followed by Middle East Africa, Japan, North America, China, Western Europe and Korea, all registering healthy double-digit growth. However, the largest IoT module market, China, saw demand dip by 11% QoQ due to the new wave of COVID-19 and resulting lockdowns.

Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said, “The cellular IoT module market remains competitive, but there is growing consolidation. For example, Quectel, Fibocom and Sunsea accounted for more than half of the global IoT cellular module shipment volumes for the first time ever. This highlights the growing influence, expertise, and scale of these Chinese vendors in the fast-growing global market.

Quectel’s cellular IoT module shipments grew 77% YoY in Q1 2022 to a healthy 38% of global volume. Quectel now ships more modules than the next ten vendors combined. Quectel continues to dominate geographically with leadership in seven out of ten key markets globally. Quectel commands a strong position in 4G and NB-IoT modules. Quectel is expanding its 5G portfolio and aims to gain scale as the technology ramps.

Fibocom’s shipments grew by 24% YoY benefitting from the surging demand for 4G Cat 1 bis modules, which is one of the fastest growing segments and led by Fibocom globally. 4G Cat 1 bis is becoming a key technology targeting the 2G and 3G IoT installed base and similar applications such as POS and telematics. Fibocom is also heavily focusing on 5G AIoT based smart modules to maintain a lead in high value applications.

Sunsea AIoT which includes the brands SIMcom and Longsung, has cemented its place in the top three brands. It focuses on 4G Cat-1 and NB-IoT modules. China continues to be the key market for Sunsea; it will need to diversify if it wants to scale and grow at the same pace as its peers.

Telit captured 4.6% share and is the only non-Chinese brand in the top five players. Demand for its modules remains healthy in North and Latin America. The module mix shifted slightly with increasing demand for legacy 2G and 3G modules offsetting some volume decline in 4G modules due to supply chain constraints. Telit leads the Latin America market and is among the top three vendors in North America.

China Mobile, Sierra Wireless and u-blox improved their market share in Q1. The world’s largest EMS, Foxconn, also entered our top ten module players list with growing demand in the CPE and connected PC segments. The relationship with top device makers, potential EV business growth and a focus on 5G technology, should help Foxconn to grow in this sector in the mid- to long-term.”

Commenting on cellular IoT technology evolution, Associate Director Ethan Qi, said, “There is a significant shift happening in the adoption and proliferation of different cellular IoT access technologies, from LPWA (NB-IoT, LTE-M) to 4G (Cat 1, Cat 1 bis) to 4G Cat 3+, 5G and upcoming 5G Redcap. This is driven not only by the wide range of different applications, but also regional and operator adoption dynamics. NB-IoT is considered a key and fast-growing technology for low power IoT applications and has been widely adopted in China and some other parts of the world. Whereas LTE-M is preferred in markets such as Japan, Australia, North America, and parts of Europe. However, we are also witnessing many regions and operators favouring 4G Cat 1 and Cat 1 bis for some mature and some new IoT applications. While most of these technologies are complimentary, operators still have to selectively invest in one over others, depending on the IoT verticals of most importance to them.

As we see 5G rolling out, many of the advanced IoT applications such as automotive, router CPEs, PCs will move to 5G from advanced 4G technologies. Furthermore, the advent of 5G Redcap will also supplant some legacy technologies such as 3G/4G in some IoT applications. So, the entire IoT ecosystem has a wide array of cellular access technology solutions to choose from depending on the applications, data requirements, cost constraints and operator dynamics in a particular market.

The technology mix also shapes the overall cellular IoT module Average Selling Price (ASP), which declined by 3% annually in Q1 due to an increasing mix of lower cost 4G Cat 1 and 4G Cat 1 bis modules. Furthermore, the 4G Cat 4+ modules are still facing supply chain constraints and the % share of 5G modules remains small contributing to the overall ASP decline. We believe the 4G module supply chain issues will moderate later this year, but the falling ASP for 5G modules will provide an option for device OEMs to either select 4G or 5G modules moving forward.”

Commenting on which IoT applications are hottest, Research Vice President Neil Shah said, “Cellular IoT powers a diverse set of applications and the number of things that can be connected to the internet continues to rise.

Smart meters, POS and industrial were the top three applications in the global cellular IoT module market in Q1 2022. These segments are contributing to nearly 40% of total cellular IoT module shipments.

Smart meter projects have restarted in many markets post-COVID and the segment is seeing strong growth with shipments doubling compared to a year ago. Meanwhile, demand in the router/CPE segment is steadily growing as the supply constraints lessen and demand increases for FWA CPEs for the work-from-home segment, and 4G/5G upgrade projects increase for enterprise-grade routers across retail, factories, offices, etc.”

For detailed research, refer to the following reports available for subscribing clients and also for individual subscription:

Counterpoint tracks and forecasts on a quarterly basis 1500+ IoT module SKUs’ shipments, revenues, and ASP performance across 80+ IoT module vendors, 12+ chipset players, 18+ IoT applications and 10 major geographies.

Background

Analyst Contacts:

Soumen Mandal

Ethan Qi

Neil Shah

Counterpoint Research

press(at)counterpointresearch.com

Related Reports:

Apple’s Pay Later Option May Impact US Consumption Patterns

In the latest Worldwide Developers Conference (WWDC), some key updates were announced for Apple Wallet. Besides the Tap to Pay feature, which allows users to skip the use of a POS terminal, Apple has introduced the Pay Later option, under which the cost of a purchase can be split across four payments over six weeks for US users. Given the US’ big iOS user base, the Pay Later option is expected to impact consumption patterns and payment behaviour there.

Buy-now-pay-later (BNPL) has been a rapidly growing payment method in recent years. Even as digital/mobile wallets are increasingly becoming popular, the fintech sector is developing further, with BNPL catching on with consumers, particularly in the US and Europe. BNPL is a short-term financing service that allows consumers to trade first and pay the total amount in instalments within a specified period after the product purchase and delivery. It helps in expanding the consumer’s purchasing power. It should be noted here that BNPL is not a replacement or alternative for credit cards or debit cards. It relies on the user’s original bank account (credit card or debit card) to offer a time gap between consumption and payment.

How Apple’s Pay Later works?

When the consumers choose Apple Pay to make payments at Apple stores or merchants adopting the Apple Pay API, the payment can be split into four equal instalments spread across six weeks, without incurring any interest or fees. “Built into Apple Wallet and designed with users’ financial health in mind, Apple Pay Later makes it easy to view, track and repay Apple Pay Later payments within Wallet,” the company said in a press release on Monday.

Apple Pay Later is operated on its own database set mainly. It is the latest technologies being used in financial services that differentiate BNPL from the traditional credit card system. These technologies enable a new way of assessing personal credits and managing risk levels. BNPL needs to update the database to adjust the risk control model quickly to be much faster than the credit card repayment cycle, generally no more than three months. Each cycle (from borrowing to repayment) is considered to have run out of data once. The BNPL companies need to continuously run the data to improve the risk control system. With the tons of data on transactions and purchasing behaviour via Apple Wallet, Apple possesses a healthy and trained risk management model to support its operation on Pay Later.

Pay Later Advantages and Risks

Just like Apple Cash and Apple Card, Apple Pay Later will launch in the US initially. After all, Apple Wallet enjoys the biggest base in the US. Furthermore, the US has some of the best banking and credit systems globally.

Klarna, Afterpay (owned by Square) and Affirm are the world’s largest BNPL companies and they all have operations in the US. Moreover, the US is among the top countries in terms of BNPL consumers.

It is a good move to launch Tap to Pay together with Pay Later because Pay Later has a strong link with merchants. The typical business model of BNPL companies has most of the operating income coming from merchants. With Apple Pay’s new functions, merchants can benefit from Tap to Pay with less system integration investment and extra transactions from the Pay Later users. The Tap to Pay and Pay Later combination is the unique selling point for Pay Later over other BNPL providers.

At the same time, Apple Pay Later may experience the shared risk of other BNPL companies – uncertainty cropping from macroeconomic changes. The BNPL companies have to pay more for funding when the central bank or federal government raises benchmark interest rates. Furthermore, if the debt carries floating interest rates, it gets more expensive when the Federal Reserve raises its benchmark rate. Some companies can pass higher funding costs to merchants through higher fees, or to their borrowers. However, raising the fee for merchants may affect the business relationship. Even if some companies choose fixed-rate debt funding, the attendant risks will come along. But Apple may have less to fear as it has a solid cash flow.

Also, Apple can only encourage its current installed base because the business model leverages Apple Wallet. This can make it easier for the current Apple users to buy more or upgrade Apple products at an early stage.

Apple’s Pay Later will probably be released after the new generation of iPhone and iOS 16 upgrades. Its popularity is expected to grow within years because it is more like an ecological development.

Qualcomm Retains Top Position in Global Cellular IoT Chipset Market in Q4 2021

Qualcomm, UNISOC and ASR were the top three cellular IoT chipset vendors in Q4 2021.
NB-IoT contributed to almost a third of the cellular IoT chipset shipments during the quarter.
Smart meter, POS, router/CPE, industrial and automotive were the top five applications in Q4 2021.

New Delhi, San Diego, Buenos Aires, London, Hong Kong, Beijing, Seoul – April 12, 2022

Global cellular IoT chipset shipments grew 57% YoY in Q4 2021, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application. China continued to dominate the cellular IoT chipset market by accounting for nearly 60% of the shipments. 5G grew 392% YoY followed by 4G Cat 1 with 154% YoY growth. Router/CPE, PC and industrial were the top three applications for 5G.

Commenting on the market dynamics, Research Analyst Anish Khajuria said, “Qualcomm, UNISOC and ASR held the top three positions in the global cellular IoT chipset market in Q4 2021, accounting for nearly 75% of the total shipments. UNISOC, Qualcomm and ASR were the top three players in China. For the rest of the world, Qualcomm led the market, followed by UNISOC and Intel.”

Qualcomm led the global cellular IoT chipset market with a 38% share in terms of shipments. Qualcomm grew its share both annually and sequentially with traction across key segments such as automotive, router/CPE, retail, asset tracking and industrial IoT. However, competition from local players in China, such as UNISOC and ASR, in key fast-growing segments like LTE Cat-1/Cat-1 bis and NB-IoT limited Qualcomm’s growth opportunities in the world’s largest IoT market. However, Qualcomm has broadened its portfolio of IoT solutions, targeting specific verticals like retail, automotive, industrial IoT and smart cities. It has also launched an IoT services suite covering more than 30 verticals to enhance platform support for IoT-as-a-service (IoTaaS) applications and accelerator programs (like smart cities) with a more ecosystem-led approach bringing in different stakeholders across the value chain.

UNISOC, the second-largest cellular IoT chipset player globally, has been strong across NB-IoT and 4G Cat 1 technologies. Its cellular IoT chipset shipments growth has continued for nearly last four quarters and is able to fill the gap which HiSilicon left in the market. Moreover, it is making steady improvements in higher-end technologies such as 5G, 4G Cat 4 and above. It has also succeeded in expanding its customer base to Quectel, Fibocom, China Mobile and many more module players. This helped it to capture more than one-fourth of shipments in Q4 2021. UNISOC is focused on low-end applications like smart metering, POS and industrial. For 5G, it has launched the V510 baseband and V516 platform which are widely used in FWA routers and CPE devices.

ASR Microelectronics maintained its third ranking in the cellular IoT chipset market in Q4 2021 due to strong performance in the 4G Cat 1 and 4G Cat 4 module segments. ASR is providing strong competition to UNISOC for 4G Cat 1 and to Qualcomm for 4G Cat 4 module-based applications lately. However, ASR is yet to launch NB-IoT and 5G solutions and thus will have to work on its long-term capabilities and strategy to maintain this high growth which could remain for the next 2-3 years. The company has increased its production capacity this year to meet demand. ASR has local partnerships with many module players in 4G Cat 1 and Cat 4 technology, like Quectel, Longsung and Rinlink.

MediaTek took the fourth position in the market in Q4 2021. However, it is not much focused on the cellular IoT market compared to the smartphone chipset market. This is one of the key reasons for it to lose 4% market share sequentially in this quarter. MediaTek is also focusing on 5G enhancement and recently launched Kompanio 900T, a new 5G platform for tablets, notebooks and other IoT devices. The MediaTek T750 chipset is already quite popular for FWA and CPE devices.

Global Cellular IoT Chipset Shipments Share by Chipset Vendor, Q4 2021

Source: Counterpoint Global Cellular IoT Module and Chipset Tracker by Region, Q4 2021

Eigencomm registered a strong growth of 3743% YoY albeit on a smaller base as it struck partnerships with Quectel and Fibocom for NB-IoT module chipsets.

Sequans also registered growth with a robust 4G, LPWA and 5G chipset portfolio. The French manufacturer saw strong traction in key markets such as asset tracking, healthcare and smart meters.

Sony Semicon (Altair Semi) registered growth this quarter with a strong partnership with Sierra Wireless and Wistron NeWeb targeting smart meters, asset trackers and smart cities markets.

Samsung also launched a 5G chipset targeting automotive applications. It may provide strong competition to Qualcomm and MediaTek if it can enter a strong partnership with automakers.

Intel and HiSilicon are still supplying their leftover inventory to some of their top customers where the modules with their chipsets are designed in.

Global Cellular IoT Chipset Shipments Share by Application, Q4 2021

Source: Counterpoint Global Cellular IoT Module and Chipset Tracker by Application, Q4 2021

*Note: Figures may not add up to 100% due to rounding

Commenting on the application side of chipsets, Vice President Research Neil Shah said, “Smart meter, POS, router/CPE, industrial and automotive were the top five applications in terms of shipments in Q4 2021. PC had the maximum growth of 245% YoY, followed by smart meter with 124% YoY and router/CPE with 112% YoY growth. Router/CPE, PC and industrial were the top three applications for 5G. For NB-IoT, smart meters, asset tracking and energy were the top three applications. 4G Cat 1 is becoming popular in the POS, industrial and smart meter segments due to its high performance and low power consumption architecture. We forecast that smart meters, industrial and router/CPE will grow the maximum in the future.”

For detailed research, refer to the following reports available for subscribing clients and also for individual subscriptions:

Counterpoint tracks and forecasts on a quarterly basis 1,450+ IoT module SKUs’ shipments, revenues and ASP performance across 85+ IoT module vendors, 12+ chipset players, 18+ IoT applications and 10 major geographies.

Background

Analyst Contacts:

Anish Khajuria

Neil Shah

Counterpoint Research

press(at)counterpointresearch.com

Related Reports:

Global Cellular IoT Module Revenue Grows 58% YoY in Q4 2021; 5G, 4G Cat 1 Modules Fastest Growing

Quectel and Qualcomm led the global cellular IoT module and IoT chipset markets respectively in Q4 2021.
5G contributed to nearly a quarter of the cellular IoT module market revenue.
Automotive, router/CPE, industrial, PC and POS were the top five applications in the quarter.

San Diego, Buenos Aires, London, New Delhi, Hong Kong, Beijing, Seoul – March 31, 2022

Global cellular IoT module revenue grew 58% YoY in Q4 2021, according to the latest research from Counterpoint’s Global Cellular IoT Module and Chipset Tracker by Application. China, the leading region in the cellular IoT module market, accounted for more than 40% of the revenue. However, India was the fastest growing (154% YoY) cellular IoT module market. 5G was the fastest growing (324% YoY) technology followed by 4G Cat 1 (105% YoY). Router/CPE, PC and industrial were the top applications for 5G.

Commenting on the market dynamics, Senior Research Analyst Soumen Mandal said, “Quectel, Telit and MeiG held the top three positions in the global cellular IoT module market, accounting for 40% of the total revenue in Q4 2021. For 2021, global cellular IoT module shipments and revenue grew by 59% and 57% YoY respectively.”

Quectel’s cellular IoT module revenue grew more than 100% YoY in Q4 2021. Strong partnerships, superior service and a wide range of product offerings are supporting its growth. Quectel launched a new ODM brand, Ikotek, targeting the US market. We expect it to help Quectel increase its footprint in North America and Latin America. Moreover, the products can be customized and designed according to the regulatory requirements of a project.

Telit made a strong comeback after a relatively weaker performance in recent history. Telit has been expanding its offerings, which is helping its revival. Telit NExT is providing flexible connectivity plans across 190 countries to take advantage of emerging business models and removing major bottlenecks for many IoT device vendors. In Q4 2021, Telit’s focus on Latin America to help customers migrate legacy 2G and 3G modules to 4G Cat 1 modules helped it become the leading module supplier in the region to complement its strong position in North America.

MeiG is another Chinese player which is making continuous progress and made it to the top three in cellular IoT modules, both in shipments and revenue. It is focusing more on AIoT and smart module-based higher-end applications such as router/CPE, intelligent cockpit, video recordings, industrial PDAs, drones and AR/VR. MeiG entered lower-end applications in 2021. This product mix of higher-end and lower-end modules helped MeiG increase revenue by more than 100% in Q4 2021.

Thales, Rolling Wireless, Sunsea, Fibocom and Sierra Wireless are other key players. Out of the top 10 players, Rolling Wireless and LG are focussing on the automotive segment only.

Thales is performing well in Europe, North America and Japan targeting smart meter, healthcare and industrial applications. Sunsea improved its performance in the global IoT module market, but it wasn’t enough to prevent its share from going down. The industry is growing at a faster rate compared to Sunsea’s growth. Fibocom is showing a stronger presence in 4G Cat 1 bis technology. However, Fibocom slipped out of the top five module vendors rankings due to weaker performance of NB-IoT modules.

Rolling Wireless’s and Sierra Wireless’s revenues increased 105% and 87% respectively. After spinning off from Sierra Wireless’s automotive division last year, Rolling Wireless quickly made it to the top 10 module vendors list. Rolling Wireless and Sierra Wireless have been successful in targeting specific applications, such as automotive and router/CPE respectively.

Global Cellular IoT Module Revenue Share by Module Vendor, Q4 2021

Source: Counterpoint Global Cellular IoT Module and Chipset Tracker by Application, Q4 2021

Automotive, router/CPE, industrial, PC and POS are the top five cellular IoT applications in terms of revenue. However, drones, PC and router/CPE are the top three fastest growing segments. Smart meters is another key segment but the lower ASPs of NB-IoT and 4G Cat 1 modules mean it is not among the top five IoT applications in terms of revenue.

Global Cellular IoT Module Vendor Shipment Share Rankings by Key Geographies, Q4 2021

Commenting on the regional performance of module vendors and pricing dynamics, Vice President Research Neil Shah said, “International players made a strong comeback in Q4 2021 after weaker performance in the previous quarter. Quectel, MeiG and Sunsea were the top three cellular IoT module players in China in terms of revenue. For the rest of the world, Quectel, Telit and Thales were the top three cellular IoT module players.”

Quectel is leading in most regions except Latin America, India and Japan. However, as these regions currently represent a small share of the global cellular IoT module market, it doesn’t have much impact overall. Japan’s preference for LTE-M works against Quectel.

In China, MeiG overtook Fibocom to become the second largest cellular IoT module vendor.

Neoway, another Chinese module vendor, maintained its leading position in the Indian market. Strong partnerships with smart meter manufacturers and telematics providers are helping Neoway to maintain its position.

The overall cellular IoT module ASP increased 7% sequentially due to supply chain constraints, especially in 4G modules. Chinese chipset players are trying to reduce the 5G module ASP for mass commercialization. However, 5G adoption hasn’t picked up as expected. We see 5G peaking in the global cellular IoT module market after 2025.

For detailed research, refer to the following reports available for subscribing clients and also for individual subscription:

Counterpoint tracks and forecasts on a quarterly basis 1450+ IoT module SKUs’ shipments, revenues and ASP performance across 80+ IoT module vendors, 12+ chipset players, 18+ IoT applications and 10 major geographies

*Note: We have updated regional ranking data as per industry feedback (as of Oct 2022) which indicates Quectel led in India shipment share during Q4 2021.

Background

Analyst Contacts:

Soumen Mandal

Neil Shah

Counterpoint Research

press(at)counterpointresearch.com

Related Reports:

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Insights Tag: POS

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