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Market Insight

Cellular IoT Gateway Report 2019 - Key Findings

July 26, 2019

Julian Watson Julian Watson Principal Analyst, IoT, IHS Markit

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Cellular IoT Gateway Report – 2019 – key findings

Earlier this month IHS Markit published Cellular IoT Gateways  Report – 2019. This follows on from Cellular IoT Gateways Report – 2016 and Cellular IoT Gateways Report – 2017

The most recent report provides an update (in Excel) on vendor market share and segmentation of shipments and revenues by region, air standard, venue and form factor. The accompanying PDF report digs deeper than previous reports into competitive and strategic issues such as:

  • the role of a cellular IoT gateway in the IoT;
  • old and new characteristics of cellular IoT gateways such as support for southbound protocols and accompanying software and services;
  • the factors driving rapid migration to 4G LTE;
  • the role of new technologies such as NB-IoT, LTE-M, 5G and CBRS;
  • different vendor approaches to bundling hardware and software;
  • how vendors are integrating edge computing/intelligence into their offerings.

Bottom line

What’s changed or stayed the same since Cellular IoT Gateways Report – 2017, which was published in January 2018? These are some of the key findings:

  • IHS Markit estimated 3.4 million worldwide cellular IoT gateway shipments in 2018. This was slightly up from the 3.3 million forecasted in the January 2018 report.
     
  • Sierra Wireless remains market leader, in terms of shipments, with some 14% of the market, followed by Cradlepoint (11%).
     
  • As in previous years, the market remains highly fragmented: IHS Markit took into account 34 vendors for this report. In future years, others are likely to enter the market, particularly companies adding cellular connectivity into their existing gateways products or creating gateways that enable a broader service offering.
     
  • Does this mean consolidation? Although subsequent to this report being published, Lantronix acquired leading vendor Maestro Wireless, IHS Markit does not foresee widescale consolidation within this space. However, leadership in specific verticals or technologies (e.g. 5G) could make some vendors very interesting to companies that would like to add cellular IoT gateways to their product set.
     
  • As for 5G, when will it appear in cellular IoT gateways? IHS Markit believes that 5G-enabled gateways leveraging 3GPP Release 15 specifications related to the enhanced mobile broadband (eMBB) use case for 5G NR (New Radio) will start to appear before the end of 2019. This is just the start of the story for 5G. Future enhancements to 5G standards should support much lower latency and mission critical applications in coming years.
     
  • For now – 4G LTE is the dominant technology. Demand for raw bandwidth, previous and planned 2G and 3G shutdowns are driving migration to 4G LTE. But as in the cellular module market, demand for low-power gateways based on NB-IoT and LTE-M has been modest to date. There are various reasons for this. Network availibility is still far from ubiquitous. As of now, there are limited international roaming arrangements. OEMs and developers are yet to find a rich stream of viable use cases.
     
  • Vendors are innovating fast in two areas: hardware and software bundles and adding edge computing/intelligence into their offerings. There are a great variety of pricing models being deployed (or tested), from upfront charging (capex), recurring monthly subscriptions (opex) or a combination of both.
     
  • On the edge computing front, efforts are centred around making it easier to customers to extract the most meaningful data from gateways (and the devices connecting into them), ingest it into cloud and take decisions based on that data. Some interesting pricing models, such as sharing monthly message bundles across multiple devices, are emerging. Such initiatives may go some way to address the long-standing perception that cellular IoT plans are inflexible.

Whether you are a gateway vendor, an OEM or developer assessing different cellular IoT vendors, IHS Markit is more than happy to discuss our research findings with you.

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