Cellular IoT modules and chipsets to grow again

Worldwide shipments of cellular IoT modules and chipsets fell by 16 per cent in 2023 compared to the previous year, according to data from IoT Analytics, but the market is projected to return almost entirely to 2022 levels during that year. The main driver of growth is expected to be the integration of the latest technological innovations in Artificial Intelligence (AI) to make these modules and chipsets smarter.

“Os dispositivos IoT estão evoluindo para além da conectividade e incluindo análise de dados para ajudar a tornar as escolhas mais rápidas e fundamentadas. Como resultado, há uma demanda crescente por mais poder computacional e inteligência, especialmente nas bordas mais próximas de onde os dados são gerados. Essa tendência também se aplica ao mundo da IoT celular, no qual a integração da IA aos módulos e chipsets de IoT levará a tomadas de decisão mais autônomas” afirma Satyajit Sinha, principal analista da IoT Analytics. “Também minimizará a transmissão de dados pelas redes celulares, reduzindo a largura de banda e os custos”, acrescenta Sinha.

According to the “Global Cellular IoT Module e Chipset Market Tracker” report by IoT Analytics, two factors contributed to the drop in shipments of cellular IoT modules and chipsets in 2023. Firstly, there was an optimisation of stocks post-Covid19. At the time, manufacturers ordered modules and chipsets between 2021 and 2022 that were still used the following year, postponing new orders. In addition, economic uncertainties generated by inflation, rising interest rates, fears of recession and trade tensions between the United States and China discouraged new purchases.

Now it seems that economic concerns are easing and demand is coming back into balance. And when that balance is reached, shipments of cellular IoT modules and chipsets should show a short-term recovery, with a compound annual growth rate of 22 per cent until 2027. The 2023 slump will also be almost completely eradicated by the end of 2024, predicts the IoT Analytics analysis.

Help from Artificial Intelligence

Market growth should also be helped by the emergence of smart cellular IoT modules with built-in Artificial Intelligence (AI) capabilities to perform advanced analyses or even inference directly on IoT devices. Together, shipments of these advanced modules are forecast to grow at a compound annual growth rate of 76 per cent by 2027.

Legacy IoT models via cellular communication have been around for almost two decades and simply offer connectivity resources for data transmission based on 2G, 3G, 5G or NB-IoT technologies. According to figures from IoT Analytics, by 2023 they accounted for 96 per cent of global shipments of cellular IoT modules and are still expected to grow at a compound annual rate of 18 per cent until 2027, when they will begin to give way to intelligent cellular IoT modules with AI capabilities.

IoT Analytics points out that smart cellular IoT modules have already been on the market for almost a decade, with powerful CPUs and GPUs used for data processing on the devices themselves and other advanced functions and multimedia features. In 2023, they accounted for just 2 per cent of global shipments of cellular IoT modules, but this share is expected to rise to 10 per cent by 2027, with a compound annual growth rate of 79 per cent.

Going further, cellular IoT modules with AI capabilities are relatively newer than their legacy and smart counterparts, having been on the market for around five years. In addition to connectivity functions, they include NPUs, TPUs, PPUs or other dedicated processing chipsets (e.g. GPUs) for AI inference.

In the view of IoT Analytics, although cellular IoT modules with AI capabilities are still in the early stages, the convergence between cellular IoT and AI has immense potential to revolutionise various sectors of activity. This integration can enable AI inference at the edge, reducing the volume of data transmitted over cellular networks, saving bandwidth and costs and facilitating immediate and autonomous decision-making. It can also save space and optimise the shape of IoT devices.

In 2023, models with AI capabilities accounted for 2% of global shipments of cellular IoT modules. They are expected to reach 9% by 2027, with a compound annual growth rate of 73%.