Is Cellular IoT Around the Corner?

February 24, 2021 - 6 minutes read

IoT app development

Recently, new cellular standards were established and agreed upon for all types of Internet of Things (IoT) devices while cellular module costs dropped. IoT systems, the GSM Association (GSMA), and mobile network operators (MNOs) have concurrently created a technology landscape that can take on the challenge of global roaming and local connectivity. With these recent advancements, it seems like we’re closer than ever to creating an ecosystem that is optimized for the rollout and success of cellular IoT.

But when exactly will we reach a point where cellular IoT is being adopted en-masse relative to the scale of the global IoT development market? It turns out that it is possible to predict this inflection point.

Predictive Factors

MNOs and systems integrators are working to drive monetization of IoT which has aided growth in cellular IoT. These companies have benefitted from a market growth rate of 73% recently. So we know that cellular IoT is coming soon because the market is quickly expanding towards it, but what factors can we use to predict the inflection point?

IoT app development

One factor we can use is the evolution of past telecommunications trends. In examining these trends, we can ultimately find other common factors to use in our predictions. A2P (application-to-person) communication is one such trend we can analyze: it enables the person to be reached at any time, and it uses ubiquitous technology and broad coverage. The eventual emergence of eSIM technology in IoT runs parallel to A2P’s wide-ranging roaming agreements.

Cloud computing is another recent trend in telecommunications (and IoT as a result). It is trusted, reliable, built into modern cellular technology, and it nicely complements the GSMA’s eSIM specification. For manufacturers involved in creating SIMs, adding eSIM provisioning and subscription management is a requirement. This two-in-one process reduces the risk of tampering and ensures trustworthiness among everyone in the supply chain.

IoT app development

Mobile virtual network operators have grown in supply in response to the growing demand. They’re working to fill gaps in specialized services and minority demographics within a market where MNOs have previously been unwilling or unable to provide services and invest in technology for these markets. Cellular IoT can also fill in gaps where systems integrators, MNOs, and eSIM support fall short on a global level.

Unknown Parts of the Equation

We already know much of the industry is moving towards cellular IoT, but, as with any emerging technology, we need to account for unknown factors that affect the IoT industry and its pace of cellular IoT adoption. In this case, we’re looking for parts of the market that haven’t fully matured yet. These small components of the equation are important for us to elucidate.

IoT app development

One of these unknown factors is the choice of technology. While hardware costs have fallen recently, they’re still not very affordable for companies and countries that want to purchase this technology at scale. For example, advancing development for LPWAN (Low Power Wide Area Network) technology is necessary. But the cost is dampening the rate at which we’re developing infrastructure for these networks. LPWAN roaming agreements haven’t reached a global expansion yet, either.

For now, suppliers are recommending adding a 2G radio with an LPWAN radio as a fallback in case the network drops the connection or needs roaming data. Some suppliers have stepped up with eSIM deployments, but MNOs will want to expand their networks nationally and internationally in the short- and near-term.

IoT app development

Another factor is the realistic amount of flexibility available to support global deployments. As cellular IoT grows in popularity, the main benefit of eSIM, the ability to change eSIM platforms and connectivity providers, is more complicated and technical than it sounds. This challenge is preventing eSIM adoption from reaching a global scale, meaning that the full potential of eSIM for cellular IoT is still not realized yet.

Calculating the Tipping Point

Based on all of the known and unknown factors, we can estimate that cellular IoT will reach an inflection point within the next two or three years. According to research by London-based Kaleido Intelligence, more mature markets, like the machine-to-machine and IoT markets, will experience traction sooner. This is due to the established service providers, business models, and market knowledge.

IoT app development

We also know that because the COVID-19 pandemic significantly impacted the current IoT landscape, the future of IoT technology adoption, which includes cellular IoT, has also been accelerated. Although many service providers reported a decrease in demand in 2020, we know that companies that did invest in IoT in 2020 helped advance the technology with new IoT applications owing to the new state of the world. As many businesses firm up their finances again over the next year or two, IoT will once again experience rapid growth in innovation and adoption.

The Years Ahead

The pandemic may have negatively impacted the IoT market in 2020, but cellular IoT will play a crucial role in reducing any negative impacts that businesses experienced during the pandemic. As a result, experts predict IoT demand to rise again in 2021 and fully accelerate in 2022 and beyond.

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