Important insights:
- this Low Power Wide Area Network (LPWAN) market According to the latest LPWAN market report for 2021-2026, despite COVID-19 and a shortage of chipsets, it has maintained strong growth in the past two years.
- The four technologies account for more than 95% of the global installed base.
- It has the highest adoption rate in China and smart metering use cases.
- The migration of second/third generation (2G/3G) technology is progressing slowly, and low-power satellite IoT connections are increasing.
Key quote:
- Knud Lasse Lueth, CEO of IoT Analytics said:
“The Covid 19 pandemic has almost no negative impact on the LPWA network. The market growth is still very strong. In particular, the four technologies (NB-IoT, LoRa, LTE-M, Sigfox) are now trusted by IoT vendors and adopters. The market It has been consolidated around them now.”
- Eugenio Pasqua, principal analyst at IoT Analytics, added: “In terms of the installed base, NB-IoT and LoRa have gained greater advantages than any other LPWAN technology, and I believe they will remain the two leading LPWAN technologies in the next few years. Other technologies will continue to exist, although most It will only attract certain niche markets.”
IoT Analytics recently released a report on the LPWAN market for 2021-2026 and found that despite the impact of the COVID-19 pandemic and the shortage of chipset supply, the LPWAN market has achieved strong and stable growth in 2020 and 2021.
At this point, the market is even becoming the main driving force for the growth of nearly 13 billion IoT connections worldwide-as the IoT analysis highlighted in the 2021 Summer IoT Report (released a few weeks ago).
According to the latest analysis of the Internet of Things 2021-2026 LPWAN Market ReportIn 2020, the global installed base of active devices supporting LPWAN will increase by 62% to 450 million units, and it is expected to further increase by 47% to 660 million units in 2021. Although the deployment of most market segments slowed in the second and third quarters (Q3 and Q3) Q3) 2020, due to the logistical difficulties caused by the blockade and the strategic adjustment of budget expenditures, the LPWAN market will be in the first quarter of 2020. The recovery between the fourth quarter and the first half of 2021 (H1) was due to a sudden surge in demand for applications that helped reduce the spread or increase of viruses due to lockdowns, travel restrictions, and hardware component shortages Visibility of the supply chain.
| Defining LPWAN-what it is
Low-power wide area network (LPWAN or LPWA network) is a relatively new category of wireless communication technology that aims to achieve energy-saving, long-distance, and low-cost communication through simple IoT devices. LPWAN technology solves the problems of low-end IoT applications. These applications are usually cost-sensitive. They are characterized by 1) infrequent transmission of a small amount of burst data, 2) a large number of devices, usually distributed in a wide area, and 3) the need for equipment to operate autonomously for many years.
This article focuses on five important characteristics of the current LPWAN market, and our report will further discuss these characteristics.
1. The LPWAN market integrates around four technologies.
Four technologies account for more than 96% of the global installed base of active devices supporting LPWAN: narrowband (NB)-IoT, long-range (LoRa), machine long-term evolution (LTE-M) and Sigfox. NB-IoT leads with 47% of the global installed base, followed by LoRa with 36%. In 2019, the market share of these technologies was 94%, and the share in 2021 increased by another two percentage points.
A key success factor for these four technologies is the support of a solid ecosystem, which includes most of the leading IoT vendors (such as Amazon, ARM, Cisco, Huawei, and Qualcomm) and network operators (such as Vodafone, Orange, and Telefonica) ), which leads to a wider selection of equipment and solutions.
At this point, IoT Analytics predicts that NB-IoT and LoRa/LoRaWAN will continue to dominate the LPWAN market in the next five years, with LTE-M and Sigfox ranking third and fourth respectively. Other LPWAN technologies, such as Weightless or Ingenu’s Random Phase Multiple Access (RPMA), will continue to exist. New entrants, such as mioty (2018) or Wize (2017), are also emerging. These technologies are an attractive alternative for certain niche applications, but at this point, they don’t seem to threaten market leaders in the next few years.
2. China has the highest adoption rate, but the trade war is changing the technology mix.
China’s digital work is more dependent on LPWAN than other countries. Therefore, China is the largest adopter of the LPWAN market and has the most NB-IoT and LoRa deployment equipment.
According to the latest estimates of IoT Analytics, especially from the perspective of NB-IoT, China accounts for the majority of global connections, accounting for 80% of the total in 2020, and will exceed 76% by the end of 2021. However, the trade dispute between China and the United States now seems to be affecting the way LPWAN technology is deployed globally.
On the one hand, IoT Analytics heard that Western organizations are reluctant to deploy NB-IoT because it is regarded as a Chinese technology (due to Huawei’s large participation in its development), so it chose LTE-M. On the other hand, some Internet of Things suppliers see a reduction in business opportunities in China and pay more attention to Western markets such as North America and Europe. For example, Semtech stated in its 2021 financial earnings conference call that although nearly 50% of its current LoRa-related revenue comes from China (of which 40% comes from Europe and North America), their opportunity pipeline indicates that 21% of potential future revenue comes from China, 70% of which come from Europe and America.
3. Smart metering is the largest LPWAN use case, as COVID-19 response applications have been improved.
Smart meters are one of the earliest and most adopted use cases in the LPWAN market. In the past two years, several large-scale smart metering projects that rely on LPWAN connections have been initiated or completed:
- In Europe, countries such as Italy, Sweden, Lithuania, and the Netherlands have installed more than 1 million or more electric and/or gas meters connected via NB-IoT and/or LTE-M
- Birdz is a water supply network digital management solution provider under the Veolia Group. In addition to the 3 million already in use, 3 million LoRa-connected smart water meters will be connected across France in the next ten years.
- China Telecom claims to have more than 20 million smart water meters and more than 25 million gas meters connected to its national NB-IoT network
- In Saudi Arabia, the 5+00 million NB-IoT smart meter project is underway
- In Japan, NICIGAS completed the transformation of 850,000 gas meters through Sigfox connection
In 2020, various IoT vendors report that their demand for applications that help fight the COVID-19 pandemic has unexpectedly surged, especially for two use case series:
1) Use cases involving measures to control the spread of the virus, Such as contact tracing/proximity monitoring and disinfection/cleaning management in buildings and facilities
2) Solutions to improve supply chain visibility, Especially those focusing on cold chain monitoring of food and medical products
The demand for these COVID-19 solutions does not seem to outweigh the COVID-19 emergency, as the company sees continuing benefits and retains these solutions for future risk management.
4. In the long run, low-power satellite IoT connections may change the rules of the game.
In the past few years, several new space startups announced the launch of a new satellite-based Internet of Things communication system, which is expected to minimize the cost and power efficiency issues of traditional satellite systems. These new systems either use new Internet of Things radio protocols, or use existing LPWAN technologies, such as LoRa or NB-IoT, to provide direct communication between Internet of Things devices and satellites in orbit around the world. These new settings do not require terrestrial IoT gateways and can therefore be regarded as part of the LPWAN market.
Although most of the vendors that provide these solutions are still in the early market stage and are engaged in pre-commercial activities, such as technology trials and satellite constellation launches, a few vendors have already launched commercial solutions, although these are usually limited to specific customers or specific customers Geographical area. Examples include Astrocast, Myriota, and Swarm Technologies (acquired by SpaceX). All these companies have launched commercial solutions in the first quarter of 2021 or before.
Our view is that the low-power satellite IoT connection market will take several years to develop, because the technology is still new and unproven, and most vendors are launching their own proprietary solutions instead of just Agree on specific standards. However, the prospect of ubiquitous network coverage at a fraction of the cost of traditional satellite solutions is laying the foundation for the technology’s potential market success in the second half of the 2020s or 2030s.
5. The migration from 2G/3G to NB-IoT/LTE-M is happening, but not as fast as the mobile network operator (MNO) hoped.
The IoT industry generally believes that the LPWAN market will eventually cover most IoT deployments that currently rely on 2G/3G technology. This migration path will help promote the anticipated mass production of these technologies. This is already happening in China. For example, China Mobile has stopped adding new 2G IoT connections and started to shut down some of its 2G networks to accelerate the migration to its NB-IoT network. In Argentina, mobile network operators have been proactively reallocating 2G and 3G spectrum to cellular LPWAN. However, in most parts of the world, due to the high demand for 2G/3G Internet of Things services, many technology suppliers and users are still unwilling to give up these familiar and mature technologies.
Two of the world’s top 10 mobile network operators confirmed this to IoT Analytics. One claims that its 2020 NB-IoT revenue is lower than its forecast three years ago, while its 2G IoT service revenue has increased in the past three years. Another said that many of its partners are still using 2G, and they are unwilling to migrate to NB-IoT/LTE-M due to coverage issues and familiarity with 2G technology.
Conclusion and Outlook
The LPWAN market is expected to maintain strong and sustained double-digit growth. It is still an exciting opportunity for many participants in the market, and it is also a continuing opportunity for users in multiple industries to connect devices in a simple and effective way.
Telecommunications company (MNO and Mobile Virtual Network Operator (MVNO)) should consider:
1. Provide dedicated support for those customers who are unwilling to leave 2G or 3G networks to help them migrate to NB-IoT or LTE-M (for example, Aeris launched the Fusion IoT Network to facilitate switching between different technical standards)
2. Explore synergies with satellite IoT operators to complement terrestrial networks and make connections ubiquitous. Elon Musk stated on MWC 2021 that satellite broadband is “a good complement to fiber optics and 5G”, and Starlink has “two very important partnerships” with major telecommunications companies, and has conducted cooperation with many other companies. discuss. What he said about broadband connections also applies to IoT connections.
3. Accept that LPWAN is not a winner-takes-all market. Competition from unlicensed and licensed LPWAN technologies will continue. In particular, LoRa and Sigfox have proven their rapid response to market demand in the past few years, and thus established a large customer base, although some experts initially had high hopes for the long-term unlicensed LPWAN.
equipment manufactory Due to its simplicity and maturity, LPWAN should now be considered for remote connections. Equipment manufacturers should also consider connecting directly to satellites as a new opportunity to connect their equipment to places previously impossible (for example, offshore, rural areas).
