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IoT Gateway Shipments to Reach 64M Units by 2021

Telecom service providers are exploring the applications for the Internet of Things (IoT), as an extension of their network access offerings. Demand for IoT gateways, which manage and control complex connected environments by aggregating and transmitting sensor data, are on the rise.

According to the latest worldwide market study by ABI Research, IoT gateway shipments will grow to exceed 64 million units in 2021.

Home automation and security market components will likely account for over 50 percent of all IoT gateway shipments over the next five years. But it's the mobility and transportation segments -- as well as industrial and infrastructure -- that are forecast to generate the most revenue for vendors and service providers.

IoT Gateway Market Development

"The home automation and security market relies on gateways for aggregating and orchestrating communications between an increasing variety of home sensors and cloud services," said Dan Shey, vice president at ABI Research.

However, ABI analysts believe that this segment will only represent around 30 percent of the market’s five-year value. This is because gateways in the home do not have the same requirements for ruggedness, antenna design, and processor requirements as gateways used in industrial and commercial settings.

The higher priced, albeit lower volume, sectors are mobility and transportation, as well as industrial and infrastructure. Emerging IoT gateway opportunities in fleet management are small, but growing.

Companies such as Omnitracs, PeopleNet, and Sierra Wireless and are offering gateways for multi-application communications in fleet vehicles, such as critical event reporting, fault monitoring, and navigation.

The industrial and infrastructure market segment, meanwhile, relies on many traditional markets like smart grid and video surveillance.

Outlook for IoT Software and Services

Looking ahead, this segment will also benefit from new higher growth markets through applications in the smart cities and manufacturing or process industries.

"There are many traditional names that have been serving the M2M and IoT gateway market for years, such as CalAmp, Cisco, Cradlepoint, Digi International, Eurotech, and Sierra Wireless," according to Shey.

But these big name players are just a small share of the total supplier base, which includes both branded and white label vendors. According to the ABI assessment, within this growing IoT market, consolidation is not expected anytime soon and suppliers are increasingly turning to software and services to differentiate.

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