5G IoT Market by Technology (Enhanced Mobile Broadband (eMBB), Ultra-reliable Low-latency Communication (URLLC), and Massive Machine-type Communication (mMTC)), End-use (Manufacturing, Transport & Logistics, Healthcare, Construction, Automotive, and Others), and Regional Analysis (North America, Europe, Asia-Pacific, and LAMEA): Global Opportunity Analysis and Industry Forecast, 2021–2028

Global 5G IoT Market Analysis

The global 5G IoT market is predicted to gar ner $12,556.5 million in the 2021–2028 timeframe, growing from $1,450.5 million in 2020, at a high CAGR of 28.1%.

Market Synopsis

Increasing utility of Internet of Things (IoT) devices among manufacturing industries, rise in adoption of machine to machine (M2M) communications, and growing deployment of 5G communications across the world are the key factors anticipated to drive the 5G IoT market.

However, high expenditure required in the upgradation of the existing infrastructure of LTE to 5G may impede the growth of the market in near term.

According to the regional analysis of the market, the North America 5G IoT market is anticipated to grow at a CAGR of 27.9%, by generating a revenue of $4,079.6 million during the review period.

5G IoT Overview

5G refers to a new communication system that consists mostly of a New Radio framework and an altogether new core network aimed at improving wireless connectivity around the world. It also encompasses the concept of multiple access for technologies such as Wi-Fi, satellites, fixed-line, and cellular connectivity (as standardised by 3GPP).

5G introduces new system enhancements that allow for new levels of low latency and ultra-reliability. It is ideal for first responders, emergency services, and autonomous vehicles, such as drones and industrial IoT, as well as robotics. Moreover, vast cellular IoT technologies are known for being a low-cost and low-power option. They flourish in environments with deep and broad coverage, both indoors and out. They provide secure communication & authentication, are simple to implement in any network topology, and are built for high quality scalability & capacity expansion.

Covid-19 Impact On 5G IoT Market

COVID-19 has negatively impacted various industries, including telecom and semiconductor. Many communication service providers (CSPs) throughout the world began experiments and rollouts of 5G networks in the year 2019. Several countries were busy with spectrum auctions, infrastructure contracts, and other preparatory activities in preparation for the rollouts. By 2020, the industry witnessed some impact on both 5G rollouts and 5G readiness. While some governments have postponed spectrum auctions, others have enacted laws governing spend prioritisation. Moreover, CSPs enabled citizens' remote working and connectivity, as well as provided extensions to data consumption packages and facilitated additional quota during global lockdowns.

However, as economy recovers from the COVID-19 scenario, CSPs are expected to invest in service offerings that will enable new methods of working across industries. There will be a renewed focus on IoT, augmented reality/virtual reality (AR/VR), SD-WAN, and other related technologies, all of which will be aided by a robust 5G network.

Development of Connected Technologies and Increasing Industrial Automation are Likely to Drive the Market Growth

The fourth industrial revolution or Industry 4.0 is moving towards deployment of connected technologies such as 5G and creating smart factories. These smart factories will aid in more intelligent, decentralised decisions utilising IoT enabled sensors, connected devices, robots, self-healing networks, edge computing, and automation, which will improve overall equipment and process efficiency. With the launch of 5G networks, NarrowBand-Internet of Things (NB-IoT) and Category M1 (Cat M1), a low-power wide area (LPWA) technology will continue to cohabit. As novel IoT technologies are implemented, the number of connections and traffic per connection across cellular networks will grow, and network speeds will continue to improve.

Mobile operators & network providers, component & module suppliers, machinery & industrial automation firms, and manufacturing industries are all expected to benefit from the rise of 5G. Moreover, 5G technology is likely to enable new use cases in visual inspection and remote monitoring, autonomous operations in remote environments such as connected vehicles, and mines, among others.

To know more about global 5G IoT market drivers, get in touch with our analysts here.

Expensive 5G Deployment, Lack of Standardization of IoT Protocol, and Security Concerns are Likely to Restrain the Growth of the Global Industry

5G deployment cost and standardization of IoT protocol issues are some of the challenges that are likely to impede the growth of the market over the forecast period. Some specific issues are directly tied to the expenses of deploying the entire 5G network backbone, particularly in highly populated areas, as well as the costs of manufacturers delivering 5G devices. Another set of issues concerns the proliferation of different technologies that are frequently incompatible, while standardisation efforts led by several national and international bodies are underway. Moreover, there are numerous security, privacy, and liability concerns about 5G IoT solutions that must be addressed in order to provide the future generation of connected ecosystem with the tools they need to defend people's rights.

Increasing Demand for Private 5G Network among Industries and Government is likely to Aid the Growth of 5G IoT

Local area networks that use 5G technology as their communication medium to establish private networks are known as private 5G networks. Local 5G networks, also known as mobile private networks (MPNs), provide unified connection with a variety of benefits and improved services. These networks are projected to become one of the most popular options in the near future. They would deliver next-generation connection for corporate applications including self-driving cars, connected factories, connected healthcare, smart retail, and rural broadband. All of these scenarios will necessitate reduced latency, better throughput, and greater precision, which in turn present potential opportunities for 5G IoT across industries.

To know more about the global 5G IoT market opportunities, get in touch with our analysts here.

Source: Research Dive Analysis

The machine-type communication (mMTC) sub-segment is predicted to have fastest growing market share in the global market with a revenue of $328.8 million in 2020 and register a revenue of $3,057.0 million during the forecast period, growing at a CAGR of 29.6%. Machine-type communication enables machines to communicate wirelessly without requiring human intervention, allowing for the creation of a network of interconnected machine type devices (MTD), also known as the Internet of Things (IoT). This enables a wide range of applications in a variety of vertical sectors, ranging from linking extremely simple low-cost and low-energy devices like sensors to large machine networks, such as in industrial automation use cases. High-speed and sustained connections, mMTC reliability, and access to real-time information are the key factors contributing to the mMTC market's growth.

The enhanced mobile broadband (eMBB) sub-segment is predicted to have a highest market share in the global market with a revenue of $594.8 million in 2020 and register a revenue of $4,923.4 million during the forecast period, growing at a CAGR of 27.7%. Fixed wireless access (FWA), which will use eMBB 5G technologies like beamforming and higher-spectrum bands to offer wireless internet to previously unreached coverage regions, is one of the most important ways 5G will be deployed across big areas. Moreover, FWA was part of the first 5G rollout in more than 30 networks in 2019, and it is currently gaining traction in Europe, the Middle East, and Asia-Pacific.

Source: Research Dive Analysis

The healthcare sub-segment of the global 5G IoT market is projected to have the fastest growth and surpass $1,934.4 million by 2028, with an increase from $212.3 million in 2020.

The growing 5G IoT prospects and business models in the healthcare industry include delivering expanded tele-healthcare services in hospitals and at home. As per U.K.’s Office for Life Sciences, the remote healthcare business has begun to mix with the mobile health app sector. Disruptive changes in the tele-care and tele-health delivery models will have substantial influence, and telehealth care is likely to merge with mobile health and linked home solutions. These business models are likely to foster the growth of 5G IoT solutions in the healthcare sub-segment over the forecast period.

The manufacturing sub-segment of the global 5G IoT market is projected to register a substantial revenue of $4,334.8 million by 2028, with an increase from $484.9 million in 2020. With the evolution of fourth industrial revolution (Industry 4.0), 5G's high capacity, wireless flexibility, and low-latency performance capabilities have expedited the creation of smart factories of the future. Manufacturers are shifting towards automation and digitalization to improve ROI, and reduce costs, while 5G IoT ensures new operational efficiencies and shop floor productivity. Cyber-physical systems and the IoT devices are projected to support Industry 4.0, which would propel the growth of 5G IoT market in the sub-segment.

Source: Research Dive Analysis

The 5G IoT in Asia-Pacific to be the Fastest Growing

The Asia-Pacific 5G IoT systems market value was estimated at $388.2 million in 2020 and is projected to register a revenue of $3,665.2 million during the forecast period. In terms of the use of novel technology across many sectors, the Asia-Pacific region is undergoing rapid transformation. The increasing deployment of 4G and 5G networks throughout APAC, particularly in Japan, South Korea, India, Singapore, and China presents tremendous prospects for the adoption of 5G IoT services. Moreover, due to the region's large mobile subscriber base, businesses are becoming more competitive and focusing on providing better customer service. Also, due to its size, variety, and strategic leadership by countries such as Singapore, South Korea, and China, the area is poised to dominate 5G, blockchain, edge computing, and 5G core technology.

Competitive Scenario in the Global 5G IoT Market

Product launches and mergers & acquisitions are common strategies followed by major market players.

Source: Research Dive Analysis

5G IoT market share has been accounted by key players including Sierra Wireless, Fibocom Wireless, Huawei Technologies Co Ltd, Sunsea AIoT, Telit, Qualcomm, Quectel Wireless, Thales Group, SEQUANS, and Rolling Wireless, among others. Also, 5G IoT market is a fragmented and accounted by several players. Product enhancement, partnerships & joint ventures & partnerships, and acquisitions of smaller players are the key strategies deployed by the major players. 

In December 2020, Huawei and SIACAS partnered to launch their '5G+Industrial Network' joint innovation centre. Industry 4.0 requires a 5G+Industrial Network, which enhances network connectivity and stability while creating a new architecture for industrial linkages. The centre is expected to serve as support to fully linked smart factories of the future.

Porter’s Five Forces Analysis for the Global 5G IoT Market:

• Bargaining Power of Suppliers: In the case of 5G IoTs, currently there are large number of suppliers offering 5G IoT module primary components. Moreover, owing to development of smart and connected physical components, the bargaining power of traditional suppliers of primary components will significantly reduce over time.
  Thus, the bargaining power of the suppliers is low.
• Bargaining Power of Buyers: Buyers' ability to bargain will be hampered by IoT products. This is due to the fact that competition will be more focused on product differentiation rather than pricing. Understanding client’s utility of 5G IoT products will help company to segment customers, personalise products, set prices, and provide value-added services accordingly. Moreover, the switching cost to new suppliers will be raised by obtaining past records and product usage.
  Thus, the bargaining power of the buyers is low.
• Threat of New Entrants: New entrants will face a slew of new barriers in the 5G IoT domain, starting with the high fixed costs of extremely sophisticated product design, embedded technology, and multiple layers of new IT infrastructure. Increased obstacles to entry may emerge from broadening product definitions. Active occupants can also raise entry barriers by acquiring and accumulating product data and using it to improve products and services, as well as redefining after-sale services. These factors will impede the entry of new entrants intensely.
  Thus, the threat of the new entrants is low.
• Threat of Substitutes: 5G IoT products will face little competition from traditional items due to their superior performance, customization, and consumer value. This decreases the risk of product substitution while also boosting industry growth and profitability. Nonetheless, smart connected devices pose new sorts of substitution concerns in most industries, such as greater product capabilities that supplant traditional products.
  Thus, the threat of the new entrants is moderate.
• Competitive Rivalry in the Market: As new options for product differentiation and value-based services emerge, the competition amongst players for 5G IoT products will lessen. It will allow the enterprises to design products that are more tailored to specific market segments. Moreover, it enables the company to create more customised products for particular clients, as well as enhance product differentiation and prize realisation. 
  Therefore, the competitive rivalry in the market is low.