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New Transforma Insights forecast reveals more detail of the connectivity used to connect the Internet of Things

JAN 19, 2021
region: ALL vertical: ALL HyperconnectivityInternet of Things

Technology evolution and the growth of LPWA necessitates a different approach to forecasting IoT technologies, as demonstrated by Transforma Insights’ new Hyperconnectivity forecasts.

Transforma Insights today published the findings from an exciting new addition to its IoT forecasts. Back in October 2020, Transforma Insights published its first technology forecasts for the Internet of Things, showing connections and unit sales by highest embedded technology (e.g. 2G, 3G, 4G, LPWA etc.). Today it unveils its latest forecast, which provides information on all technologies within a device, rather than just the highest embedded technology.

Some of the key findings specific to this analysis of all embedded technologies were:

  • Short range technologies such as Bluetooth and WiFi are embedded in 94% of all devices today (end 2020), a share that will fall to 88% by 2030. The growing number of Low Power Wide Area devices, with no short-range fall-back, accounts for the decline.
  • Considering only wide area network (WAN) devices, by 2030, 47% will include 5G mMTC technologies (i.e. NB-IoT and LTE-M, plus successors), with a further 20% incorporating non-mMTC unlicensed LPWA technologies.
  • Device shipments incorporating 2G will fall to almost zero by 2030 and we forecast that almost no IoT devices will ship with 3G altogether beyond 2025.
  • In 2020 34% of WAN devices will be LTE, which will fall to 22% by 2030, although total shipments will continue to rise throughout the forecast period. The percentage decline is due to the growth of LPWA technologies.
  • 5G, excluding mMTC technologies, will be present on 6% of WAN installed devices in 2030 and 11% of new WAN device sales.
  • Asia, particularly China, Japan, South Korea and India, will lead the charge in replacing 2G with 5G mMTC technologies. In 2025, for instance, Japan will have 36% of WAN devices shipping with mMTC. In comparison, the figure for Europe is just 16%.

A number of increasingly significant trends are creating a need to understand the blend of different technologies used on each device. The old dynamic of mobile ‘generations’, where the latest devices tended to be multi-mode, supporting the present and all previous generations, has been well and truly buried in the last few years. Increasingly 3G has been skipped, as a relatively expensive technology that delivers no additional benefit of coverage or capability in most countries. We also see 2G being increasingly omitted from devices as network switch-off looms.

The growth of LPWA technologies is also creating an additional requirement to understand the nature of multi-mode devices. Developers are likely to use a more diverse blend of technologies to achieve their goals than would have been the case historically. One example would be LTE devices with Sigfox or LoRa back up for fault alerting, for instance. Or another example is NB-IoT devices which use LTE connectivity for over-the-air (OTA) firmware updates; it is no longer the case that the highest embedded technology necessarily represents the ‘main’ way that the device will communicate.

Commenting on this update to the forecasts, Transforma Insights Founding Partner Matt Hatton said: “The connectivity landscape is becoming increasingly complex with numerous technologies from which to choose. In order to truly understand what technology adoption will look like in the next ten years, the market needs to know all of the technologies that a device uses, not just the highest embedded.

With all of this fragmentation, vendors of IoT devices are increasingly interested in more deeply understanding the blend of different technologies that will be required to address the IoT market opportunity. This is where Transforma Insights’ new enhanced IoT forecast comes in. The new hyperconnectivity forecast allows uses to filter the usual forecast figures (by country, use case, application group and vertical) by whichever technology might be installed on the device, rather than just the highest embedded.

Matt Arnott, Principal Analyst leading the forecasts at Transforma Insights, explained: “To create the hyperconnectivity forecast we’ve dug even deeper into our IoT forecast to publish greater detail on the secondary connectivity technologies used in IoT devices. This information will be invaluable for CSPs and communications module manufacturers looking to understand their potential market opportunity, as well as device manufacturers evaluating the competitive landscape for their products”.

The new forecast approach has been incorporated into the TAM Forecast Database and the latest update to its Hyperconnectivity Technology Insight Report.

About the Forecast

The forecasts presented here are taken from Transforma Insights’ Total Addressable Market (TAM) Forecast Database. The TAM Forecasts provide our quantitative view of the market opportunity associated with Digital Transformation and all of the associated technologies.

The IoT Connected Things forecasts presented are based on an extensive and highly granular research methodology, which involves analysing over 300 combinations of application and vertical across each of 196 countries.

The TAM Forecast Database presents forecasts from 2019 to 2030 for Revenue Generating Units (RGUs), connected devices, annual shipments and revenue across 20 use cases, 67 application groups, 20 vertical sectors and 198 countries. Device and shipment forecasts include technology splits between cellular (2G, 3G, 4G, 5G), LPWA (5G mMTC and non-mMTC), satellite, short-range and other. Revenue splits between hardware (module and non-module) and recurring (connectivity and service wrap).

The latest change to the forecast, as highlighted in this press release, expands our analysis of technology split (e.g. 2G, 3G, LPWA etc.) from just counting the highest-embedded technology, to forecasting all embedded technologies on a device.

About Transforma Insights

Transforma Insights is a leading research firm focused on the world of Digital Transformation (DX). Led by seasoned technology industry analysts we provide advice, recommendations and decision support tools for organisations seeking to understand how new technologies will change the markets in which they operate. For more information about Transforma Insights, please see our website or contact us. Follow us on Twitter: @transformatweet.