After a sluggish start, notably in Europe, the pace of adoption of industrial internet of things (IIoT) networks and the IIoT’s more consumer-facing relative, the IoT, has picked up. The outlook is brighter — albeit with bumps along the way.
Companies focusing on designing and manufacturing the very specific ultra-low–power chips, chipsets, and modules for the networks are becoming much more positive about the prospects, as are some of the cellular network operators.
And perhaps most significantly, large organizations across numerous and widely differing sectors, such as utilities, agriculture, logistics, telemedicine, and transport, are moving from trialing and qualifying the variety of IIoT networks now available to implementing them.
According to a recent report from mobile and satellite communications network operator specialist Inmarsat, there has been “a rapid increase in the maturity level of organizations adopting the technology since the start of the Covid-19 pandemic.”
Inmarsat polled 450 “global” companies in a variety of industrial sectors early this year, and 77% indicated they had deployed at least one IoT or IIoT project, with just over 40% of these having achieved this in the past 12 months.
The remaining 23% had not yet deployed any project but indicated either that such networks are on their roadmap or that they have initiated trials.
“While our findings point to IoT driving significant uplifts in efficiency, sustainability, and safety across global supply chains, there are areas where organizations can make improvements,” said Mike Carter, president of Inmarsat’s Enterprise operations, commenting on the response. “Connectivity, data management, skills shortages, security threats, and investment levels remain challenges as the world’s production and supply chains become increasingly digitized and intertwined.”
IoT Analytics’ Satyajit Sinha
Earlier this year, Inmarsat surprised many by announcing it would launch a global narrowband network (NB-IoT) for IoT connectivity, targeting maritime, aviation, and government sectors. Dubbed Elera, the network is scheduled to launch next year and deploys the L-band spectrum for various terrestrial and satellite uses.
That came hot on the heels of the news that the satellite operator was planning to combine existing geosynchronous satellites with low-Earth-orbit birds and terrestrial 5G networks for an integrated offering, dubbed Orchestra.
Analysts are also becoming more bullish about prospects for both the IIoT and IoT, which — save for China, with its massive cellular NB-IoT rollout over the past 18 months — have struggled to make significant impacts.
For instance, Hamburg, Germany-based IoT Analytics posits that despite the impact of Covid-19 and the global shortage of silicon components due to supply chain issues, the number of IoT devices is set to increase by 9% this year, to an estimated 12.3 billion connected active endpoints, and that by 2025, there could be over 27 billion IoT connections.
But, speaking exclusively to EE Times Europe, Satyajit Sinha, a principal analyst at IoT Analytics, noted that “the number of connected IoT devices actually came in slightly lower than our midyear forecast of 11.7 billion connections for 2020, versus the actual figure of 11.3 billion. We are now forecasting that by 2025, there will be 27.1 billion connected IoT devices, a slightly lower figure than our earlier forecast of 30.9 billion.”
Sinha pointed to two “critical” factors that have dented the growth curve: “The pandemic has impacted both demand and supply, and the latter was even halted at critical periods, while supply chains and access to raw materials were not intact. So during the first half of last year, budgets were frozen. Demand returned during the second half of 2020, but supply was often disrupted. Consequently, many IoT and IIoT initiatives were halted or, in some cases, canceled. And additional supply chain issues are continuing in some regions.”
Second, there is the issue of chip shortages. “Initially, we saw this as a by-product of the pandemic’s impact on the supply chain,” said Sinha. “However, it has become its own issue: Supply capacity could not meet the global demand.
“This first impacted the automotive industry and then extended rapidly to other segments, including IoT,” he added, warning that “in 2021, this chip shortage is expected to be a factor for up to two more years before enough additional production capacity becomes available.”
As to the chip suppliers, Sinha noted, “Qualcomm is comfortably leading, and five players currently dominate the cellular IoT chip market, the others being MediaTek, HiSilicon, Intel, and Unisoc. These five enjoy 93% of all 2020 global cellular IoT chipset shipments.”
Other important players focusing on the sectors include Nvidia, Sequans, Nordic Semiconductor, Silicon Labs, Altair Microchip, and Dialog.
Indeed, Silicon Labs has gradually been selling off all business sectors not related to IoT and wireless and in September launched a range of sub-1-GHz SoCs for IoT applications that combine long-range RF and energy efficiency with certified Arm PSA Level 3 security.
Also involved in a serious way are Qorvo, with its RF chips; NXP Semiconductors, with microcontrollers; and Skyworks, with a range of SoCs.
Every connected IoT and IIoT device that makes use of cellular connectivity, be it 2G, 3G, 4G, LTE-M, 5G, or NB-IoT, needs these chipsets. But it should be noted that the chips and chipsets can be embedded directly into the device’s PCB or into an IoT module that is placed within the device. IoT Analytics’ research focuses on the latter of these options: cellular IoT chipsets embedded within an IoT module.
Leading module suppliers include Quectel, Fibocom, Sierra Wireless, Sequans, Thales, and Telit.
From a connections point of view, the latest technology standards, such as 5G, Wi-Fi 6 and 6E, and LPWA, are driving the market, while IoT Analytics suggests that satellite IoT is a wildcard that could make a serious impact in the latter part of its forecast period.
Sinha noted that one of the interesting developments in the sector is the huge gap between what is happening in China and what is happening in the rest of the world. Outside of China, LTE-Cat 1 penetration is significantly stronger than that of NB-IoT. He estimates that LTE-Cat 1 (a subset of 4G) makes up almost a quarter (23%) of the market outside of China, yet only 12% in China.
The rise of LTE-Cat 1 started in North America some years ago, when it became the go-to alternative, as these networks were being sunset by mobile operators. The massive migration from 2G/3G to LTE-Cat 1 started in 2018 and “grew by 40% year on year during 2020,” said Sinha. One chipset in particular from Qualcomm, the MDM9207-1, was by far the biggest beneficiary of this huge increase, he added. Meanwhile, Unisoc’s 8910DM is said to have grown significantly faster in the same period, driving the development of the newer LTE-Cat 1 bis sub-segment, which now accounts for 23% of all LTE-Cat 1 shipments.
Cat 1 bis is based on the 3rd Generation Partnership Project’s (3GPP’s) Release 13 and is characterized by a single antenna and thus optimized for low-power applications. The initial LTE-Cat 1 is defined by Release 8 and needs two receive antennas.
Sinha noted another important trend in the sector. In the first half of last year, connected devices using unlicensed LPWA — for instance, long-range (LoRa) and Sigfox — had a 53% share of global LPWA connections, while licensed LPWA such as NB-IoT and LTE-machine–type communication (LTE-M) contributed 47%. A year later, for the same period, licensed LPWA led with a 54% share, while the unlicensed segment had a 46% share of global LPWA connections, he said.
A key reason has already been hinted at above: NB-IoT’s tremendous growth in China during the first half of 2021. The upshot is that narrowband IoT, as a single technology, now leads the LPWA market with a 44% market share, and LoRa has slipped to second place, with a 37% share of global connections.
As for particular industry sectors, those on the steepest upward curve include transportation and automotive, as well as logistics; combined, they account for about 30% of global cellular IoT and IIoT chipset market demand. And within those segments, asset-tracking initiatives, rather than the traditional telematics applications, have been driving the market, growing at some 22% year on year (2020/21), said Sinha. Automotive adoption of 5G is also motoring fast, he said.
One important element to note in this generally positive outlook is that while the increasing availability of 5G is creating novel IIoT and IoT business opportunities, counterintuitively, it is also hindering the sector’s potential as mobile operators overhype their capabilities with regard to band coverage.
Sequans’s Jeremy Gosteau
This view was highlighted in an interview with Jeremy Gosteau, director of IoT product marketing at French group Sequans. The company, which operates widely in the U.S. and Japan as well as Europe, has been focusing on chips for the cellular IoT and IIoT sectors for many years and has recently entered the module business as well.
One of the main issues is that NB-IoT has been undervalued and perhaps overhyped by operators in most territories except China, Gosteau suggested. “One of the main aspects of the problem, particularly in Europe, is that operators are only just starting in a serious way to sunset their 2G and 3G networks,” he told EE Times Europe, adding that the U.S. is perhaps two years ahead of us but that both are still behind many other markets. “Unfortunately, it is what it is. But Europe is at last showing healthy growth, and the barriers to NB-IoT are definitely coming down.”
He added that another key issue has been, and continues to be, “the serious fragmentation of the cellular and non-cellular [low-power] broadband versions of the offering.” Part of the problem would seem to be that 5G came so rapidly following Release 13 (of LTE-M and NB-IoT), which meant that operators deployed one version or the other in different territories.
Costs have also been a major stumbling block, Gosteau stressed. Because of the fragmentation and thus the need for higher prices for the separate chips, rather than the huge volumes that could be achieved for just one of the options, progress had necessarily slowed.
A way out of this dilemma would be the commercialization of modules that combine and offer different versions — LTE-M, LTE-Cat 1, and NB-IoT, for instance — within the same module, “bringing costs down to below US$10 per unit.”
This means massive IoT could become a reality, but probably not anytime soon, said Gosteau. In addition, difficult roaming issues with NB-IoT between operators have been more or less solved, greatly improving airtime economics, he suggested.
He pointed to a potentially positive development from one of the biggest global carriers promoting consumer and corporate adoption of IoT and IIoT: Vodafone. “They are talking about a huge, multi-million–unit deal around NB-IoT and arguably the industry’s biggest contract outside of China,” Gosteau said.
If this is true and it comes off, it could be a huge plus for the whole sector, possibly kicking off a major trend that simply could not have happened two years or so ago. Others would follow, indicating the maturing of the technologies involved.
>> This article was originally published on our sister site, EE Times Europe.
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