Oyster Bay, New York - 11 Sep 2018
Today’s M2M module market was more than 20 years in the making, and the casual technology observer may be forgiven for thinking that there is nothing much that is new to say about it. But in a new report, ABI Research, a market-foresight advisory firm providing strategic guidance on the most compelling transformative technologies, reveals the changing fortunes of cellular M2M module vendors. The M2M module market has been dominated for most of its existence by a small number of independent and dedicated North American and Western European vendors. And while these vendors retained the lion’s share of module revenues in 2017, they dramatically lost out in their dominance of the number of units shipped. The cellular module market has doubled its value within five years and it has become a prize for which more and more vendors are competing.
Of the module revenues in 2017, 60% went to the longstanding pioneers of the cellular module market: Sierra Wireless, Gemalto Cinterion, Telit, and u-Blox. But, their share of shipments experienced a decisive about-turn - from 55% of the market in 2016 to less than 40% in 2017. They have been displaced by vendors from China, who have been capitalizing on the prematurely dismissed and highly-commoditized 2G market. 2G may be dead in the USA, but it will continue to be important throughout the rest of the world for several years to come. The total value of the module hardware shipped in 2017 exceeded US$2 billion – an unprecedented amount. These results will be augmented in 2018-19 as it becomes seen which vendors start to take the lead in the new LTE-M and NB-IoT module markets.
Commenting on the M2M module market and its vendors Jamie Moss, Research Director at ABI Research, said, “Cellular module vendors are experts in efficiency and effectiveness – the two operative words in the Internet of Things. They were optimizing the performance-to-cost ratio of cellular terminal hardware long before LTE-M and NB-IoT were thought of. They created wireless wide-area communications products tailored to specific verticals, notably automotive and industrial, out of general-purpose standards. Their future is in lock-step with the future of WWAN IoT - and will be determined by LTE. High-Cat. LTE products will drive the revenues while the ultra-paired-back LTE-M and NB-IoT will drive the volume.”
Currently, the historic Western vendors control the revenue and the high LTE category market. The Chinese vendors control the volume, with the bulk of their revenue coming from their portion of global high-Cat. sales. No one can be said to own the cellular Low Power Wide Area (LPWA, i.e. LTE-M and NB-IoT) market. But it is there, especially in the supply of NB-IoT, that the number of Chinese vendors is proliferating. With more than 60% of all module shipments in 2017 falling to them, they are being taken increasingly seriously. For instance, there were three attempts to buy Shanghai-based SIMCom Wireless Solutions for progressively larger sums in 2017. One bid was made by the Swiss-based u-Blox, before it was ultimately sold to Shenzhen Sunsea.
Looking to the future for vendors Moss concluded, “NB-IoT brings with it designed-in commoditization, so success in terms of shipments will not directly translate into success in revenue generation without exponential scale in volume. This means that NB-IoT will need to be monetized differently, the hardware share of the technology’s value will be at an all-time low – even by the acutely-optimized standards of the module market. It is the vendors that can lever platform competency into their module offering, to allow hardware sales to become the lead for alternative revenue streams, that will be most successful. Sierra Wireless has been a vocal proponent of this approach and it may be prescient that it took a market-leading 23% of all module revenue in 2017.”
These findings are from ABI Research’s M2M Cellular Module Vendor Market Share report. This report is part of the company’s M2M, IoT & IoE research service, which includes research, data, and Executive Foresights.
About ABI Research
ABI Research provides strategic guidance for visionaries needing market foresight on the most compelling transformative technologies, which reshape workforces, identify holes in a market, create new business models and drive new revenue streams. ABI’s own research visionaries take stances early on those technologies, publishing groundbreaking studies often years ahead of other technology advisory firms. ABI analysts deliver their conclusions and recommendations in easily and quickly absorbed formats to ensure proper context. Our analysts strategically guide visionaries to take action now and inspire their business to realize a bigger picture. For more information about ABI Research’s forecasting, consulting and teardown services, visionaries can contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific or visit www.abiresearch.com.
About ABI Research
ABI Research provides strategic guidance to visionaries, delivering actionable intelligence on the transformative technologies that are dramatically reshaping industries, economies, and workforces across the world. ABI Research's global team of analysts publish groundbreaking studies often years ahead of other technology advisory firms, empowering our clients to stay ahead of their markets and their competitors.
ABI Research提供开创性的研究和战略指导，帮助客户了解日新月异的技术。 自1990年以来，我们已与全球数百个领先的技术品牌，尖端公司，具有远见的政府机构以及创新的贸易团体建立了合作关系。 我们帮助客户创造真实的业务成果。
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