Berg Insight

Berg Insight presents a unique database covering the 350 largest cellular IoT deployments identified as part of the company’s world-class IoT market research activities since 2004. The extensive list includes various types of projects and product categories deployed across all types of vertical markets including aftermarket automotive, fleet management & MRM, healthcare, OEM automotive, retail applications, smart homes and buildings, utilities, wearables & consumer electronics as well as industrial M2M and other. The database includes project size and geographical distribution by the end of 2017 as well as a 5-year forecast for each individual project. “The projects included in the top-350 list together account for approximately 214 million active cellular IoT subscriptions”, said Rickard Andersson, Principal Analyst, Berg Insight.

He adds that this corresponds to as much as 33.0 percent of the total number of cellular IoT connections worldwide at the end of 2017. The 350 projects on the list are in the coming years forecasted to grow to 521 million units by 2022, corresponding to an overall compound annual growth rate (CAGR) of 19.5 percent. “More than 40 deployments on the list have surpassed 1 million subscriptions and the top-10 projects alone account for over 80 million units”, continued Mr. Andersson. Fleet management & MRM is the largest vertical in terms of the number of projects that made the top list, followed by retail applications, aftermarket automotive and OEM automotive as well as smart homes and buildings. When comparing the number of active subscriptions represented by each vertical for the entries in the top-350 list, OEM automotive is instead the largest vertical, accounting for 46 million units, ahead of utilities at about 34 million units and fleet management & MRM representing 31 million units.

Berg Insight estimates that global cellular IoT module shipments increased by 76 percent in 2017 to a new record level of 237 million, fuelled by exceptional volume growth in China. Until 2023, shipments of cellular IoT devices are forecasted to grow at a compound annual growth rate (CAGR) of 23.2 percent to reach 1.1 billion units. The 3GPP standards for LTE – Cat 1, Cat M, and NB-IoT – will contribute substantially to growth in the next coming five years. These new standards are designed to be less complex to limit power consumption and are priced more favorably to address the mass market and make it viable to connect entirely new applications. The results of Berg Insight’s latest cellular IoT module vendor market share assessment show that the three largest module vendors have 46 percent of the market in terms of revenues. “Annual module revenues for the three largest market players Sierra Wireless, Gemalto and Telit increased by 6.9 percent to US$ 1.17 billion, with the total market value reaching approximately US$ 2.5 billion,” says Sebastian Hellström, IoT analyst at Sweden-based IoT analyst firm Berg Insight. Sierra Wireless leads IoT module revenues, followed by Gemalto and Telit. SIMCom Wireless leads in shipments, but is only in fourth place in terms of revenues. Quectel is number two in terms of volumes and in fifth place in terms of revenues. China has been the scene for significant M&A activity in the past years. ZTE offloaded its cellular IoT business to Gosuncn during 2016 and 2017. At the same time, Sunsea AIoT emerged as a new major industry player through the acquisitions of Longsung and SIMCom. While there has been some consolidation among the larger suppliers, the long tail of companies with activities in the market for cellular IoT modules is growing. A number of new players have been attracted to the market, particularly in the emerging NB-IoT segment. Examples include Nordic Semiconductor, Foxconn and WNC.

Berg Insight, the world’s leading M2M/IoT market research provider, today released new findings about the market for cellular IoT gateways, routers and modems. About 3.2 million cellular IoT gateways were shipped globally during 2017, an increase of 22 percent from the previous year. Growing at a compound annual growth rate (CAGR) of 18.2 percent, annual shipments are expected to reach 8.6 million in 2023. Cellular IoT gateways are standalone devices intended for connecting M2M applications to a cellular network. These include primarily general-purpose cellular routers, gateways and modems that are enclosed in a chassis and have at least one input/output port. Trackers, telematics devices and other specialised devices are excluded from this report.

North American vendors dominate the cellular IoT gateway, router and modem market. Cradlepoint, Sierra Wireless, Cisco and Digi International are the largest vendors in North America, whilst Teltonika is the main manufacturer on the European market. Combined, these five vendors generated close to US$ 375 million in annual revenues from IoT gateway sales during 2017. Other important vendors include CalAmp, Multitech Systems and Encore Networks in the US, InHand Networks, Maestro Wireless, Four-Faith, Robustel Technologies and NetComm Wireless in the Asia-Pacific region, and HMS Networks, Advantech B+B SmartWorx, NetModule, Matrix Electrónica, Eurotech, Gemalto, Sagemcom Dr. Neuhaus, Option and Beijer Electronics Group in Europe. A large number of small and medium sized vendors are active on the European and Asian markets, whilst the North American market is dominated by a handful of major vendors, largely due to entry barriers in the form of carrier certifications required for cellular devices in the region. “The average selling price for IoT gateways remains notably higher in North America compared to the European and the Asia-Pacific markets, primarily due to a higher share of feature-rich 4G LTE devices in the product mix”, said Fredrik Stålbrand, IoT Analyst, Berg Insight. He adds that the carrier certifications in the US create economies of scale and diseconomies of scope, which has contributed to an industry characterised by several large companies offering standardised devices. “Several vendors are now starting to create strategies for specific vertical markets and have even introduced complete solutions including IoT gateways, peripheral hardware and applications as customers become more demanding in terms of product integration”, continued Mr. Stålbrand. Although the North American market experienced the slowest growth globally during 2017, Berg Insight expects that it will remain the largest geographical market in terms of revenues in the foreseeable future.

According to a new research report from the IoT analyst firm Berg Insight, the number smart homes in Europe and North America reached 45 million in 2017. The most advanced smart home market is North America, having an installed base of 22.3 million smart homes at the end of the year. This represents a penetration of 15.9 percent. Between 2016 and 2017, the market grew by 40.7 percent year-on-year. The strong market growth is expected to continue in the next five years. By 2022, Berg Insight estimates that more than 63 million homes in North America will be smart, meaning 44 percent of all homes in the region. The European market is still behind the North American, in terms of market penetration. There were a total of 22.5 million smart homes in Europe at the end of 2017. The installed base in the region is forecasted to grow to 84 million homes at the end of 2022, representing a market penetration of 35 percent. The most popular products on the smart home market include smart thermostats, smart light bulbs, smart security cameras, smart air conditioners, smart door locks, smart plugs and smart speakers. Well-known vendors offering these products include Nest, Signify, Belkin, D-Link, Assa Abloy, Haier, Sonos, Amazon and Google. On the North American market, interactive security systems have emerged as the most common type of smart home systems, representing 42 percent of all whole-home systems in the region at the end of 2017. The largest security providers include ADT, Vivint and Comcast. In Europe, traditional home automation systems and Do-It-Yourself solutions are more common as whole-home systems. eQ-3, Deutsche Telekom and Verisure are estimated to be the largest vendors of whole-home systems in the region. Smart speakers with built-in voice assistants have had a major impact on the smart home industry in 2017–2018. Amazon and Google are the major vendors of such devices, having a combined market share of over 90 percent. Many of the well-known smart home device and system vendors have made their products compatible with Amazon Alexa and Google Assistant in the past year. “Consumers want convenience and a lot of people buy smart home products in order to facilitate their daily lives” says Martin Bäckman, IoT Analyst at Berg Insight. “A major reason why voice-controlled speakers have become so popular is that they simplify the control of smart home devices and enable for people to adjust lighting, temperature, multimedia and more from a unified interface” concluded Mr. Bäckman.

According to a new research report from the IoT analyst firm Berg Insight, the number of telematics service subscribers using embedded systems will grow at a compound annual growth rate (CAGR) of 31.9 percent from 49.0 million subscribers at the end of 2017 to 258.1 million subscribers at the end of 2023. Moreover, Berg Insight forecasts that shipments of embedded car OEM telematics systems worldwide will grow from 26.8 million units in 2017 to reach 67.2 million units in 2023, which represents an attach rate of 71.7 percent. Connected car services have evolved from being a differentiating factor to a common feature with a high attach rate among the premium car brands and are rapidly becoming increasingly common in mid-range vehicles. GM’s OnStar was launched 20 years ago and is today the market leader worldwide with well above 14.0 million users in total, out of which 12.3 million were in North America by year-end 2017. BMW includes telematics hardware as a standard feature on all its cars sold in 45 markets worldwide and has the second largest user base of an estimated 8.0 million equipped vehicles. PSA Group is currently in third place with 2.9 million connected vehicles in Europe. The carmaker launched an emergency and assistance call service already in 2003. Additional automotive OEMs with over 2 million telematics subscribers also include Hyundai, Mercedes-Benz, Toyota/Lexus and FCA Group. “There are several connected car services that experience growing demand from stakeholders including consumers, car manufacturers, governments and various third parties as awareness of the value of telematics spreads”, said Martin Svegander, IoT analyst at Berg Insight. The leading carmakers are gradually exploring new use cases and business models for telematics such as premium concierge services, usage-based insurance and personal carsharing. “Recently, we have also seen GM, Jaguar Land Rover and Hyundai launch in-vehicle commerce platforms that create opportunities for retailers and merchants to connect with consumers”, added Mr. Svegander.