With four billion IoT devices expected to rely on Low Power Wide Area Networks (LPWANs) by 2025, ABI Research predicts that this technology will be the fastest growing connectivity segment in the market through 2025. The rise of LPWANs will translate into one billion chipset shipments with the technology generating a total value of more than $2 billion in 2025.
LPWAN can be split into two main categories; technologies that operate under unlicensed spectrum and those operating under licensed spectrum and using 3GPP standards. Although unlicensed technologies—whether proprietary technologies like SIGFOX or those based on open frameworks like LoRa and Weightless—are gaining a considerable momentum within the IoT market, they will be increasingly challenged by the emerging technologies based on 3GPP standards, notably NB-IoT.
LPWAN technologies operating under unlicensed spectrum have the early market advantage and provide the quickest time to deployment, and the lowest infrastructure and operating costs for many IoT applications. However, emerging 3GPP LPWAN technologies like eMTC and NB-IoT are promising similar performance and have many more advantages. These include strong support from the telecommunications ecosystem, the ability to operate ubiquitously across the cellular infrastructure already in place, and most importantly, the scalability for service providers to easily and quickly add new services to their portfolios using the same infrastructure.
While some technologies, mainly those operating in unlicensed spectrum, will continue to perform well in specific segments, notably utility and energy management, as well as in retail applications, other technologies will better suit service providers who want to address many segments using the same infrastructure. Smart cities, smart homes, smart buildings, and industrial IoT applications are prime examples of such segments. Operators including Orange and SK Telecom are deploying various technologies operating in both licensed and unlicensed spectrums with the ultimate goal being to build service platforms that are agnostic to the access technology used. Their aim is to play the various LPWAN technologies at their strengths, depending on the market segment targeted.
ABI Research expects the utility and energy management market to have the largest share of the LPWAN market through 2025 due to the fact that the application requirements of smart electricity, water, and gas meters match fundamental characteristics of LPWAN technologies, such as long battery life, wide coverage area, and higher link budget. Moving forward, the market will expand to include best-fit use cases for all LPWAN technologies, with smart street lighting and smart parking applications also forecast to see significant shipments.
These finding can be seen in ABI Research’s Market Opportunities for Low Power and Cellular Wireless ICs for the IoT report.
