2021 Update—Total Cellular Internet of Things (IoT) Connections Forecast, 2017–2026

The impact of the COVID-19 pandemic continues to reverberate in the Internet of Things (IoT) space. This Frost & Sullivan reforecast of the cellular IoT connections market indicates that there will be more than 3.46 billion active cellular IoT connections by 2026 (globally). In 2020, growth declined to 13.5%, with Asia-Pacific accounting for a large share of that growth. EMEA will be the slowest to recover - it will take until 2022 to return to previously forecast growth. The US market will bounce back in H2 2021.

The cellular IoT connections market continues to grow at a faster rate than the overall IoT devices market. In 2020, the number of global cellular IoT connections was 1.22 billion. Asia-Pacific accounted for 893.2 million connections, with China holding the highest number of connections. The COVID-19 pandemic affected the market in 2020, and this trend will continue in 2021, thereby reducing the anticipated growth rate. The global market growth rate for IoT devices fell sharply from 30.3% in 2019 to 13.7% in 2020. Although Asia-Pacific was not impacted adversely, growth in the other regions slowed down; however, the market is likely to recover completely by 2022. The Asia-Pacific market will grow from 870.7 million connections in 2020 to 2.67 billion in 2026 at a CAGR of 20.5%. North America accounted for 156.4 million connections in 2020 and will grow to 404.6 million connections in 2026 at a CAGR of 17.2%. The total cellular IoT connections market will grow from 1.22 billion connections in 2020 to 3.58 billion connections in 2026 at a CAGR of 19.6%.

The global market growth rate for IoT devices fell sharply from 30.4% in 2019 to 13.5% in 2020. This drop was due to the impact of COVID-19 as economies across the world saw declining investments in IoT and technology. In 2020, the Asia-Pacific market grew at 17.8% and the EMEA market grew by 2.5%, while the North American market slowed down to 3.0%.

5G will majorly impact cellular IoT adoption. High-speed broadband—starting with 3G and, later on, 4G—set the stage for IoT by delivering ubiquitous connectivity to devices. A 5G network will significantly improve the way IoT devices communicate with each other. High-bandwidth applications such as visual surveillance, robotics, and magnetic resonance imaging transmit tens of megabytes (MBs) of data per second. Numerous devices cause congestion and increase latency and reduce network and spectrum efficiency. 5G and new massive machine-type communication (mMTC) devices will address data capacity issues. These new devices do not consume as many resources and as much power or data and allow enterprises to focus their efforts on the implementation of digitalization strategies. The cost savings realized from the eventual last-mile convergence can be reallocated to create a seamless integration of systems and cloud migration.

The ability to use multi-access edge computing (MEC) to shift computing resources away from centralized cloud infrastructure to the network edge will help enterprises capitalize on ultra-low latency and bandwidth optimization to make near-real-time, data-driven decisions. IoT deployments augmented with MEC add tremendous value to enterprises as they deliver business insights that can help companies increase the overall RoI on their technology investments.

Author: Dilip Sarangan