Can a Lower Total Cost of Ownership Be the Key to 5G Replacing Ethernet on the Factory Floor?

In mid-July 2025, Lantronix launched its NTC-500 Series of routers, for industrial and enterprise Internet of Things (IoT) applications. Intended to replace Ethernet-based factory floor connectivity but without compromising effectiveness, the NTC-500 supports the 5G Citizens Broadband Radio Service (CBRS) Band n48, and Bands n77 and n78 (3.3–4.2 Gigahertz (GHz)). CBRS is intended for use by private cellular networks in the United States. The NTC-500 contains a Release 16-based 5G cellular module that uses a Qualcomm chipset, supporting Non-Standalone (NSA), and Standalone (SA) 5G networks, as well as dynamic 5G slicing. As the NTC-500 is not a chip-on-board design, the router is pre-approved to join any cellular network wherever its component module is already certified.

The NTC-500 is a new product, but was a design inherited as a work-in-progress by Lantronix via its acquisition of NetComm Wireless, in December 2024 for US$6.5 million. The express purpose of the buy-out was to expand Lantronix’s 5G edge compute capabilities and opportunities. Specifically, for industrial applications that require ruggedized equipment, and specific reliability and performance characteristics. The NTC-500 includes Long Term Evolution (LTE) fallback, with a peak data rate of 2.4 Gigabits per Second (Gbps) on the downlink, and 900 Megabits per Second (Mbps) on the uplink. The router does not include any Short-Range Wireless (SRW) connectivity, as it is intended to be directly connected to factory floor equipment via a 2.5 Gbps Ethernet port. It will soon be followed by the NTC-550, which has Wi-Fi 6, Bluetooth®, and Global Navigation Satellite System (GNSS).

The IoT router and gateway market is niche, premium, crowded, and competitive. 5G routers are not new, yet neither is 5G adoption mature, despite the fact that the 5G standards were finalized by The 3rd Generation Partnership Project (3GPP) in mid-2019—a full 6 years ago. The ethos behind Lantronix’s NTC-500 product line launch is threefold: affordability, mobility, and connectivity; and ABI Research argues in that order of importance. All gateways, regardless of technology, exist to provide connectivity, as a subset of which all wireless gateways confer mobility, but crucially for 5G specifically, not usually at a compelling price point. It may seem belittling to lead with pricing as the main Unique Selling Point (USP), but Lantronix’s express intent is to target the industrial factory floor by reducing the Total Cost of Ownership (TCO) for connected infrastructure, to compel 5G uptake and, ergo, gain market position.

It purportedly costs up to between US$1,000 and US$2,000 per unit to run cabled connectivity out to a factory floor device. The challenge for 5G and cellular technology has always been that it cannot merely do the job just as well as a legacy system. To replace that system, cellular needs to be demonstrably better. To switch away from a tried and tested technology means that 5G must either enable mission-critical, not merely nice-to-have, features that were previously impossible; or it must fundamentally shift the ownership and operational paradigm. Lantronix believes that a sub-US$500 gateway will compel that shift, with an easier to roll out, extend, and dynamically redesign network, at a lower cost to deploy and maintain, with the potential benefits of 5G-only capabilities, principally network slicing.

The are two current variants of the NTC-500. The NTC-501 is intended for North America and the NTC-502 is for the global market. The only differences are cellular band support and industry certifications, with no difference in price. As sold through distributors DigiKey and Mouser, the NTC-500 Series costs approximately US$400 in the United States, or £300 in the United Kingdom, and €350 in Europe. Release 16 chipsets and modules are significantly less expensive than Release 15 models, and the next logical step for a product like the NTC-500 is the use of 5G Reduced Capability (RedCap), which is 75% less expensive. The problem with RedCap is that it pre-supposes 5G SA rollout, and a subsequent 5G RedCap network overlay. Yet, SA deployment remains spotty, and 5G RedCap more so, with RedCap lacking the obvious consumer mass market that compelled 5G to be deployed, for the IoT to then piggyback.

The affordability sought by Lantronix has some trade-offs, that are implicit in an optimized Bill of Materials (BoM), with limited physical interfaces (i.e., ports), and limited connectivity options (i.e., cellular only). The primary goal of the NTC-500 is to match as closely as is practicable the throughput rate of a 2.5 Gbps Ethernet interface, encouraging its use as a replacement or alternative. But physical restrictions and functional limitations can provide benefits in the form of a reduced footprint. A router that occupies less floorspace can be more easily physically attached to industrial equipment, and serve potentially hazardous or hard to reach locations with greater ease than previously possible. Competitors will likely seek to do the same, but the growing concern about the security of Chinese products in North America right now provides Lantronix with a timely advantage.

The impetus for the move from LTE to 5G is more than just functional—it is practical, as OEMs like Lantronix are receiving reports that their customers are no longer receiving sufficient coverage and capacity from LTE, so they need to switch to 5G routers and gateways. The reason for this is that carriers are keen to re-farm LTE spectrum. This is happening at different rates in different countries, with the biggest, most competitive national markets of the United States and China leading the way. Switching to 5G is a process that needs to be as affordable for customers as possible, so it is a perfect opportunity for a product like the NTC-500. Similarly, there are situations where customers are simply concerned about LTE longevity and want to source hardware that is suitably future-proofed, but without paying an extortionate premium for that peace of mind.

But what about the impetus to move from other technologies to embrace cellular for the first time? Concerns remain over carrier seriousness toward 5G SA outside of the aforementioned biggest national cellular markets. Without SA, it is not possible to unlock the full potential of network slicing, and there can be no 5G RedCap or Enhanced RedCap (eRedCap), period. The lack of SA  outside of China and the United States is surely an obstacle to using 5G for private networks over public infrastructure (public-private networks), so it is a missed revenue opportunity for wireless carriers. It would be a shame if such a useful IoT-enabling technology as SA has been specified only to then be mostly ignored by carriers, much like the Embedded Subscriber Identity Module (eSIM) was. It would also render 5G as nothing more than additional spectrum and throughput for broadband services, with no functional improvement, i.e., “4.5G.”

Other vendors will be wise to respond to the innovation of low-cost 5G routers and gateways, as they will be necessary in time not just as a replacement market, but for new cellular growth in industrial use cases. It is necessary not to merely have a cheap product for the sake of itself, but to categorically prove that there are more cost-effective lifetime connectivity options that sacrifice none of the performance and reliability of Ethernet. Lantronix manufactures branded hardware for wireless carriers, including Vodafone’s MachineLink range. The largest and most serious IoT carriers use hardware strategically, as a physical channel to embed their connectivity into customers’ private networks. Such carriers are looking for a way to sell 5G more creatively and will welcome the flexibility and business opportunity afforded by less expensive but no less capable 5G equipment.