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Global IoT and M2M Solutions Market Growth Trends

The Internet of Things (IoT) and machine to machine (M2M) solutions market continues to evolve, showing growth in all world regions and vertical industries. A variety of hardware and software vendors are helping to propel the emerging technology and associated use cases to new heights.

As an example, the market for cellular IoT gateways, routers and modems is expanding, according to the latest worldwide market study by Berg Insight. More than 3.4 million cellular IoT gateways were shipped globally during 2018, at a total market value of approximately $921 million.

Growing at a compound annual growth rate (CAGR) of 18.5 percent, annual shipments are expected to reach 8 million in 2023.

IoT Gateway Market Development

Cellular IoT gateways are standalone devices intended for connecting machines to a wireless communication network. These include general-purpose cellular gateways, routers and modems that are enclosed in a chassis and have at least one input/output port.

Note that trackers, telematics devices and other specialized IoT devices were excluded from this particular market study.

North American vendors dominate the cellular IoT gateway and router market. According to the Berg assessment, Cradlepoint, Cisco, Sierra Wireless, CalAmp and Digi International are the largest vendors worldwide.

Combined, these five vendors generated close to $500 million in annual revenues from cellular IoT gateway and router sales during 2018, accounting for a market share of 53.3 percent.

Other key vendors include Multitech Systems, Systech and Encore Networks in the U.S. market, InHand Networks, Robustel and NetComm in the Asia-Pacific region, and HMS Networks, Advantech B+B SmartWorx, Matrix Electrónica, NetModule, Eurotech, Westermo and Option in Europe.

The European and Asia Pacific markets are fragmented with a large number of small and medium-sized players that generate annual revenues in the range of $3–10 million.

The North American market is dominated by a handful of major vendors, largely due to entry barriers in the form of mobile network carrier certifications required for cellular devices in the region.

"North America experienced the fastest growth globally during 2018, driven by deployments in the public safety, transportation and retail sectors," said Fredrik Stalbrand, senior analyst at Berg Insight.

The region has experienced a transition in vendor merger and acquisition (M&A) activity in recent times. The reported M&A activity has been low over the past decade but has increased significantly since the beginning of 2018.

Outlook for IoT Gateway Market Growth

Berg analysts point to examples of recent deals such as Lantronix’ purchase of Maestro Wireless Solutions in July 2019, and most recently Digi International’s announced the acquisition of Opengear in November 2019.

In Europe, Westermo acquired the remote access specialist Virtual Access in November 2019, expanding the company’s presence in the public utility sector.

"Several players continue to have inorganic growth as a strategy and further consolidation can be expected among IoT gateway vendors in 2019–2020," concluded Mr. Stalbrand.

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