The NB-IoT chipset market is expected to grow from USD 461 million by 2020 to USD 2,484 million by 2025 at a CAGR of 40.0%. Widening applications of NB-IoT technology and increasing participation of industry players in the development of NB-IoT, growing adoption of IoT and rise in use of connected devices are among the factors fueling the growth of the NB-IoT chipset market. In addition, increasing demand for wearable devices due to COVID-19 outbreak is further supplementing the growth of the NB-IoT chipset market.
COVID-19 Impact on NB-IoT Chipset Market
The COVID-19 pandemic is impacting global supply chains and logistics as lockdowns have been imposed geographically, and the continuity of operations for a majority of industries is severely impacted. Because of COVID-19, the majority of the countries has stopped all imports due to the fear of the further spread of the virus. With a decline in the supply of connectivity hardware, the pace of growth of the NB-IoT chipset market is expected to be slightly slower than previously forecasted as a result of the pandemic.
The spread of COVID-19 has impacted the smart street lighting market, as infrastructure projects of highways and streets have been put on hold, and investments in smart cities are also affected. This, in turn, has slowed down the growth of new installations of smart street lighting. The shutdown is expected to negatively impact the potential demand for infrastructure, including lighting, for the next 2 to 3 quarters. The disruptions due to the pandemic will result in a decline in annual smart meter shipments in 2020.Most of the energy and water utilities have temporarily delayed smart meter installations and have re-allocated resources to field service operations to ensure continuity of services for end customers.
Service providers and utilities have followed government regulations related to social distancing and lockdown throughout the pandemic. This has led to a reduction in the number of smart meter installations, especially in the first half of 2020. However, it is expected that as the regulations relating to the pandemic are eased, the number of smart meters being installed and the revenue from it will increase in 2021.
NB-IoT Chipset Market Dynamics
Driver: Growing Adoption of IoT and Rise in Use of Connected Devices
Increasing M2M communications is driving the growth of the connected devices market, especially in the industrial sector. Additionally, industry trends such as IoT have facilitated connectivity in almost every industry, including healthcare, consumer electronics, and retail. Smart devices require sensors to generate real-time data. The declined price of these sensors has led to a significant increase in the adoption of IoT across organizations. Moreover, the key reasons for the increased adoption of NB-IoT include smooth communications through better connectivity, low power requirements, and a growing preference for a smarter and greener planet. The rising demand for connected devices for long-range connectivity is expected to drive the deployment of M2M/IoT devices, such as smart meters, smart streetlights, livestock monitoring devices, and smart parking solutions.
Restraint: Stiff Competition from Other LPWA Technologies
With the growing number of connected devices, the demand for LPWA networking technologies is growing. From smart homes to high-end laboratories and industries, LPWA networks are deployed using low-cost and low-power smart wireless sensors and are providing new opportunities for the implementation of IoT in various applications. Thus, the LPWA technologies having similar capabilities as NB-IoT are creating huge limiting the growth of the NB-IoT chipset market.
Opportunity: Emerging Smart Cities and Smart Buildings
Smart cities are pivotal to adding digital intelligence to existing urban systems and connected applications as they provide real-time, transparent information in the form of actionable insights to users. Energy and resource, physical infrastructure, mobility and transport, and safety and security are the major functional areas of more than 1,000 smart city projects that are currently under progress across the world. These projects present prominent growth opportunities for the NB-IoT players to expand their market.
Challenge: Limited to Low-Speed Data Transmission Applications
NB-IoT devices have low data transfer rates, which limits its cellular capabilities in various applications such as video surveillance and voice communication that required high-bandwidth. It is not suited to mobile devices, which use GSM, 3G, and LTE for voice, messaging, high-rate data transmission, and so on. However, emerging technologies such as LTE-M have higher data rates, and this allows them to offer the broadest range of cellular capabilities. LTE-M has the largest bandwidth among all LPWA technologies, and is ideal for fixed and mobile applications. This can limit the adoption of NB-IoT in applications such as health or fitness wearable and smart meters, which require higher data transfer rates. However, the development of dual-mode chipsets offering CAT M1 and CAT NB1/NB2 is expected to decrease the impact of this challenge in the near term.
