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Insights Tag: Telit Cinterion

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.”

A Chart Showing Global Cellular IoT Module Shipment Share By Vendor Q2 2023

  • 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.

Counterpoint Research
press(at)counterpointresearch.com

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u-blox’s H1 2023 Jumps 17% YoY, Expects Slowdown in H2

  • Results driven by design wins in the automotive and industrial application sectors.
  • EMEA had the highest growth in revenue at 31% YoY and surpassed the Americas in terms of contribution.
  • u-blox to experience a reduction in revenue in Q3 2023 and remain sluggish in H2 2023.

Global wireless and positioning technologies leader u-blox’s H1 2023 revenue rose 17% YoY to reach $364.3 million, primarily driven by successful design wins within the automotive and industrial application sectors. However, gains were limited by a decline in consumer revenue.

During u-blox’s earnings call, CEO Stephan Zizala touched upon several important topics like significant design wins, prevailing macroeconomic challenges, and the company’s proactive management strategy for the future.

Macroeconomic Situation and Outlook

CEO: “In a softening macroeconomic and global semiconductor market environment, our order book for H2 2023 developed more slowly than initially anticipated. Mainly due to unfavorable FX rates and overstocking, we expect Q3 revenues and profitability to be weak, with an improvement in Q4.”

Our analyst take: “The IoT module industry is decelerating because of broader macroeconomic conditions and a softening semiconductor market. Key players in the cellular IoT module sector, including Quectel and Telit Cinterion, have witnessed a reduction in growth compared to H1 2022. However, during H1 2023, u-blox achieved significant double-digit expansion, despite significant constraints from the global semiconductor supply chain shortage.”

“However, u-blox is expected to experience a reduction in revenue in Q3 2023 as demand remained weak in the key North American region during H1 2023 and will likely remain sluggish in H2 2023. However, u-blox is optimistic about Q4.”

u-blox revenue by application, H1 2019 - H1 2023Management Strategy

CEO: “While we must deal with cycle adaptation, I remain very confident about u-blox’s long-term outlook and growth trajectory, thanks to our strong structural growth drivers in automotive and industrial target applications. We are winning important new projects at leading customers. A large design win for automated driving ramping in 2026 and an innovative approach for satellite IoT connectivity are testimony to these future development prospects.”

Our analyst take: “The automotive industry is undergoing a significant transformation towards electrification and autonomy. This transition highlights the importance of connectivity and navigation, emerging as crucial factors. u-blox stands out from other GNSS competitors due to its exceptional GNSS quality and centimeter-level precision in positioning.”

“Apart from its focus on GNSS and cellular technology, u-blox’s recent collaborations with satellite player Orbcomm leverage its strides toward present-day trends. The aim is to offer hybrid connectivity solutions (combining cellular and satellite capabilities) catering to agriculture, asset tracking, and maritime applications, promising enhanced coverage and communication. However, u-blox is set to encounter intense competition from Quectel, Fibocom, and Telit Cinterion, as they have already introduced hybrid connectivity modules.”H1 2023 Highlights:

  • u-blox’s gross profit increased 12% YoY in H1 2023 to reach $171 million.
  • The industrial sector accounted for 65% of the total company revenue and experienced a robust 26% YoY growth. This growth was attributed to significant demand in asset tracking applications.
  • The automotive segment also exhibited growth, increasing 24% YoY and accounting for 30% to the overall revenue, driven by the acceleration of electric vehicle adoption and advancements in autonomy.
  • Conversely, the consumer and other segments faced a decline of 55% YoY, accounting for only 5% of the total revenue. This decline was primarily driven by decreased consumer demand starting from mid-2022.
  • Among regions, APAC was the highest contributor, capturing 43% of the market with 30% YoY growth due to demand from automotive customers and safety stock buildup for healthcare customers. EMEA shows the highest growth with 31% YoY and contributed 32% of the market surpassing Americas with a ramp-up of the tracking business and 2022 order backlog. However, the US region’s revenue fell 12% YoY, accounting for only 25% of the market due to demand reduction in healthcare and consumer applications.
  • In H1 2023, modules and chips accounted for 80% and 19% of the total revenue, respectively. Module volume grew 9% YoY growth in H1 2023, while chip volume saw a remarkable increase of 31% YoY.
  • In the module revenue segment, the GNSS module retained its leading position, generating over half of the total revenue. This is attributed to the exceptional quality and precision of u-blox’s GNSS products. The collaboration with GMV resulted in significant design wins, merging u-blox’s GNSS receiver hardware with GMV’s secure correction service, sensor fusion and positioning engine. Furthermore, u-blox has partnered with Position Partners to introduce the PointPerfect GNSS augmentation service to Victoria and New South Wales. This marks the initial phase of the service’s rollout within the Australian and New Zealand markets.
  • In H1 2023, the Wi-Fi/BT module segment grew 10% YoY. u-blox’s latest release, the JODY-W5, introduced the newest dual-band Wi-Fi 6 and dual-mode Bluetooth® 5.3 module, featuring Bluetooth LE audio within a compact form factor. This design is aimed at preventing wireless network congestion within vehicles while simultaneously enhancing audio capabilities.
  • According to Counterpoint Research’s Cellular IoT Module Tracker service, u-blox’s cellular IoT module segment grew 18% YoY in H1 2023 to reach $106 million. u-blox has accelerated its adoption of tracking applications driven by the strong performance of its UBX-R5 chipset-based LPWA and LTE-M modules.

Conclusion

Given the macroeconomic challenges characterized by adverse shifts in FX rates and customer overstocking, u-blox’s market outlook for H2 2023 suggests a substantial deceleration. The rise in inventory levels is expected to lead to a decrease in profitability during Q3 2023, followed by a recovery in Q4 2023. However, the demand and requirements for semiconductor solutions, particularly in domains such as autonomous driving, asset tracking and industrial automation, are poised for substantial growth. u-blox remains strategically positioned to capitalize on this growth trend due to its strong expertise in positioning technology and wireless connectivity, which is expected to result in more design wins.

Related Reports:

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.

Global cellular IoT module shipments share by vendor, Q1 2023

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.”

Top 3 cellular IoT module shipments applications shipments, Q1 2023

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

Analyst Contacts

Soumen Mandal

 
Mohit Agrawal

Follow Counterpoint Research

press@counterpointresearch.com

Related Reports

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.”

IoT Module Market 2022 Counterpoint

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.”IoT Chipset Market 2022 Counterpoint

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:

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.

Analyst Contacts

Soumen Mandal

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Mohit Agrawal

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Anish Khajuria

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Counterpoint Research

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press@counterpointresearch.com

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