Cellular IoT on slow path to eventual dominance - Embedded.com

Cellular IoT on slow path to eventual dominance


SAN JOSE, Calif. — New LTE standards for cellular IoT are off to a slow start with some carriers just now turning on relatively expensive services. Nevertheless, competition in silicon making wide-area IoT links is strong, and the 3GPP's road map is expected to drive a wave of chip upgrades for cellular IoT.

Long term, the Narrowband-IoT (NB-IoT) version of LTE and its unlicensed rival LoRa are expected to dominate wide-area wireless deployments in the Internet of Things. But getting there may take time.

“The volumes are not taking off anywhere but China and even China isn’t growing at the pace it was predicting. Their initial projections of 600 million units by 2020 won’t happen,” said Christian Kim, a senior analyst for IHS Markit, which plans to update its forecast in December.

“Markets are still below what we expected a year or two ago, primarily due to the immaturity of the networks, especially in Europe where there is not wide coverage for NB-IoT. We are now on the ramp we expected would have come six to nine months ago,” said Vieri Vanghi, a 20-year Qualcomm veteran who launched and manages its LTE IoT business.

China has had the most success so far getting NB-IoT module prices down to the needs of volume markets. Government subsidies slashed nearly half the cost of initial $12 modules for a year.

Now the subsidies are over but commercial prices are falling in line. A recent China Unicom bid for 3 million modules attracted five China module makers willing to stay under its $6 maximum bid, said Kim.

Five LTE module makers in China were willing to submit bids on a China Unicom deal requiring a low price. (Chart: IHS Markit)

In the U.S, modules are advertised as low as $8.50 without a carrier’s service subsidy and $6.50 with one. U.S. carriers want to get down to $5 modules soon, while China’s providers are pushing for parity with the $3.50 price of legacy 2G modules, said Vanghi.

Modules also supporting the faster Cat-M1 LTE standard for Mbit data rates may command a small premium. However uneven deployment of the two standards has fractured the market with the U.S., for example, starting with M1 then migrating to NB-IoT and China taking the opposite path.

Some carriers are over-pricing the new IoT services, further slowing the market. China Telecom claims it charges just $3/year for NB-IoT services, but elsewhere often unpublished prices are several times higher.

“In my opinion, there’s no point in a $5 module with a $15-20/year data plan,” said Vanghi

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