There's more growth for the Internet of Things (IoT) technologies sector during 2017. According to the latest market study by Berg Insight, global shipments of cellular IoT devices will grow at a compound annual growth rate (CAGR) of 22.7 percent from 155.6 million units in 2016, to reach 530.1 million units in 2022.
Strong growth is fueled by fast-growing demand in China and the global adoption of connected car technology in the automotive industry. Berg Insight believes that the maturity of the ecosystem is a crucial advantage for 3GPP-based standards in the IoT market.
"LTE-M and NB-IoT are the latest in a long line of cellular standards already connecting hundreds of millions of devices worldwide," said Tobias Ryberg, senior analyst at Berg Insight. "Alternative non-cellular LPWA technologies have a very long way to go before they achieve the same prominence.”
Berg Insight estimates that annual shipments of non-cellular LPWA devices for IoT reached 13.5 million units in 2016. Also, 802.15.4 WAN accounted for 8.0 million units, while shipments of LoRa and Sigfox were around 4.0 million and 1.5 million units respectively.
The vast majority of 802.15.4 devices are smart energy meters deployed in North America and other regions. Looking ahead, Berg Insight believes that LoRa and Sigfox will outgrow 802.15.4 WAN and achieve annual shipments in the range of 50–100 million units each by 2022.
Based on initial feedback from the market, volume segments for non-cellular LPWA in the near to medium term will be asset tracking, buildings or security and smart cities.
Industry-Specific IoT and M2M Application Example
In a separate Berg Insight study, they uncovered that the number of cellular M2M connections in the retail industry reached 33.7 million worldwide in 2016. Cellular M2M technology enables devices such as POS terminals, ATMs, digital signs and ticketing machines to be used at new locations where fixed line connectivity is unavailable or impractical.
The technology has a more transformational effect on markets such as vending and parking, where machine operators need to reorganize their operations in order to benefit from the availability of real-time information.
Berg Insight forecasts that the number of cellular M2M connections in the global retail industry will grow at a compound annual growth rate (CAGR) of 10.0 percent during the next five years to reach 49.2 million connections in 2020.
Shipments of cellular M2M devices for retail applications will at the same time increase at a CAGR of 5.6 percent from 11.5 million units in 2016 to 14.4 million units in 2020. POS terminals constitute the largest device segment and accounted for 89 percent of all cellular M2M connections in the retail industry at the end of 2016.
The market for wirelessly connected POS terminals is however relatively mature, and most of the market growth is driven by the increasing use of electronic payments in emerging markets.
"The multi-space parking meter segment was one of the first vertical markets to embrace cellular M2M connectivity and has today reached the highest connectivity penetration of 59 percent," said Johan Fagerberg, senior analyst at Berg Insight.
In recent years, cellular connectivity has also found its way into the single-space parking meters market, which has become one of the fastest growing segments. Berg Insight expects that the vending machine segment will present a major opportunity for wireless connectivity in the long term.
Today only 1.8 million of the world’s 17.1 million vending machines are online. According to the Berg assessment, every vending machine will eventually be connected, but costs for the wireless M2M hardware and service subscriptions need to become more affordable before this vision is a reality.