LPWA market update, China boosts LPWA market development

Despite the less attention, LPWA market has been growing steadily.

TSR recently published an update of its market report on cellular and LPWA devices. Compared to the research in last year,

• NB-IoT market grows faster than expected
• LTE-CatM market deployment is slower
• Better forecast for LTE-Cat.1

So far, China boosts LPWA market by massive scale government projects, and aggressive price cut of LPWA modules. However, looking at outside China, LPWA market is still small for big enterprises to develop business.

Since China has been leading in LPWA application development, and module price cut. We expect that these factors accelerate global LPWA diffusion in the future, which support the sequential market growth.

Market of major LPWA standards, including LoRa, Sigfox, and cellular LPWA, will grow by approx. 81% YoY, to nearly 150M units of shipments in 2019. Among major standards, NB-IoT shows significant growth, with almost triple YoY. We forecast the market grows continuously, with 49% of CAGR from 2017 to 2024.

LoRa takes biggest part in LPWA market, followed by NB-IoT and LTE Cat.1 in 2019. Since NB-IoT has strong momentum, we estimate NB-IoT will surpass LoRa in 2021.

LTE-CatM and Sigfox start picking up in 2019. We expect the shipment growth, but the market size is smaller than other standards.

Although LPWA technology is deployed to wide range of industry verticals, we estimate three major (high volume) applications:

• Smart meter (water and gas meters, which runs on battery)
• GPS tracker for vehicles (Telematics), bike, cargo, container, human, and other assets
• Home and building security, automation (smoke detector, gate system…)

Smart meter (water meter, gas meter) is the biggest application for NB-IoT and LoRa. China currently develops LPWA based smart meter. India and South East Asia are expected to be the next big market in the future.

Location tracking is another major application of LPWA technology. LTE Cat.1 is mainly adopted in wearable and telematics market. NB-IoT, LoRa, and Sigfox are widely used for cargo/asset tracker.

Home/building security/ automation has finding the major use of NB-IoT, LTE Cat.1, LoRa, and Sigfox. Smoke detector, gate system, and alert system are the main examples of this vertical.

China is the biggest market of LPWA, followed by North America and Europe. LPWA market penetration is still limited in emerging countries.

China accounted for over 50% of LoRa device shipments in 2019. For NB-IoT, over 90% of the device shipped go to China by 2019.

North America is the main market for LTE Cat.1 and LTE Cat.M. Unlicensed LPWA has only a few presence.

Unlicensed LPWA deployment has begun in Europe earlier than other areas. Many European operators deploy NB-IoT network, but the commercial development is still low in many countries.

LTE Cat.1 market penetrates in North America, Japan, Australia, Korea, and China, where MNOs plan to shut down 2G/3G network in the near future.

NB-IoT is mainly deployed in China, EMEA, and APAC emerging countries. As NB-IoT can be converted from GSM network, this will be supported by more mobile operators than LTE Cat.M.

The price of industrial cellular module usually declines ~10% annually. Though cellular LPWA module price has been dropping further, as the market is still early development stage.

The price of LTE Cat.1 is reaching around $10 in 2019. The price of LTE Cat.1 module is reaching same level with 3G, which has been the target price for the mobile operators to replace 3G subscribers.

In China, cellular module price is typically much lower (almost half price) than western market. NB-IoT module price in China drops quickly due to competition, and strong price pressure from mobile operators. NB-IoT module price is reaching same range with GSM module in 2019-2020. This will accelerate 2G to NB-IoT migration after 2020.

Sigfox has been promoting “low cost” in both module and connectivity cost. The module price is set at $2~3. Price of LoRa module is relatively stable.

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