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According to a report released by IoT Analytics, LPWAN has maintained strong growth despite the double negative impact of COVID-19 and chip shortages in the IoT market.

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Low power Wide Area Network (LPWAN) has been a hot topic in the iot industry since 2016. IoT Analytics recently released a report showing that LPWAN has maintained strong growth despite the double negative impact of COVID-19 and chip shortage in the Internet of Things market.

According to IoT Analytics, despite the isolation of many countries due to the epidemic in the second and third quarters, the number of devices activated to support LPWAN in 2020 still reached 450 million units, a year-on-year growth rate of 62%, especially the rapid growth of IoT applications, which play an important role in epidemic prevention and control and supply chain visualization. The number is expected to be 660 million in 2021, up 47% year on year, with LPWAN connections expected to reach 2.7 billion in five years.

 

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IoT Analytics summarizes some of the new changes that have taken place in the global LPWAN space over the past year. Based on the actual situation in China and the communication with domestic enterprises in related fields, the author analyzes the IoT Analytics from five aspects.

 

First, the "2+2" pattern has been further consolidated, accounting for more than 96% of the market share

 

Over the past few years, the LPWAN space has finally emerged in four categories: NB-iot, LoRa, LTE-M (eMTC), and Sigfox. According to IoT Analytics monitoring data, the number of nodes using these four technologies accounts for more than 96% of all LPWAN nodes.

Specifically, NB-iot led with 47%; LoRa followed with 36%; Lte-m was 10 percent and Sigfox 3 percent. Therefore, this pattern can basically be described as "2+2", in which NB-iot and LoRa have obvious advantages, accounting for 83% of the share; Lte-m and Sigfox have a small market share, while the remaining technologies are very fragmented and have negligible market share.

 

At the beginning of 2020, monitoring data from IoT Analytics showed that these four technologies accounted for 92% of the market share in 2019, an increase of 2 percentage points two years later. Not only has the concentration increased, but the structure has also changed significantly, with NB-iot emerging as the largest connected technology in the LPWAN space.

In September, data monitored by IoT Analytics for the first half of 2021 showed that the total number of NB-iot and LTE-M connections accounted for 54% of all LPWAN connections, surpassing unlicensed spectrum technology for the first time. A key factor was a 75% growth in the number of NB-iot connections in the first six months of 2021. The Number of NB-iot connections alone accounted for 44% of the number of LPWAN connections. As NB-iot continues to grow at a high rate, its market share is expected to reach 47% by the end of 2021.

 

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LPWAN finally forms a "2+2" pattern, which is the result of ecosystem management. These four technologies, especially the first two, have rich ecosystem members and are supported by a large number of leading companies, including mainstream operators and device giants, giving customers a wider range of choices.

 

IoT Analytics predicts that NB-iot and LoRa will continue to dominate the LPWAN market over the next five years, with LTE-M and Sigfox in third and fourth place, respectively, and are unlikely to overtake NB-iot and LoRa. Other LPWAN technologies such as Weightless and RPMA will continue to exist. There have also been a number of new entrants in recent years who have developed technologies that can serve as alternatives to mainstream technologies for certain vertical applications, but they do not appear to threaten the market leaders in the coming years.

 

Second, China is still the largest market, but something is happening in the global market

 

There is no doubt that The Number of LPWAN connections in the Chinese market still occupies the majority share in the world. Domestic attention to digital economy is also driving the rapid expansion of the scale of the Internet of things. In the outline of the national "14th Five-year Plan", "Accelerate digital development, build digital China" is a separate section, and "promote the comprehensive development of the Internet of things, to build the ability to support fixed and mobile integration, broadband and narrow combination of things". These policies ensure that China's Internet of things market application will remain the world's leading in the next five years.

 

In the case of LPWAN, Many industry digitization efforts in China have adopted LPWAN more widely than in other countries. In the past few years, China has become the largest user in the LPWAN market, with the largest number of NB-iot and LoRa connected nodes. According to the latest forecast of IoT Analytics, In 2020, China will account for 80% of the total number of LPWAN connections in the world, and it will still reach 76% by the end of 2021.

 

However, the global application of LPWAN technology has undergone subtle changes due to changes in the international situation. On the one hand, although NB-iot has been recognized by mainstream operators around the world, a large number of overseas operators still choose to deploy LTE-M networks. On the other hand, the market for unlicensed spectrum LPWAN technology in China is slowing due to the maturing of NB-iot and cost reduction.

IoT Analytics noted, for example, that Semtech said in an earnings call in 2021 that while nearly 50 percent of its lora-related revenue now comes from China, the market could change somewhat in the future, with 21 percent of its potential revenue coming from China and 70 percent from Europe and the Americas.

 

Third, smart meters are still the largest application scenario of LPWAN, and the epidemic has further increased its penetration rate

 

Smart meters such as water and gas meters are the earliest and by far the largest application scenario in the LPWAN market, both in China and globally. IoT Analytics lists several large smart meter projects that have started or completed LPWAN connectivity in the past two years:

 

In Europe, countries such as Italy, Sweden, Lithuania and the Netherlands have each installed more than 1 million or more electricity and gas meters connected via NB-iot or LTE-M.

Birdz, a provider of digital water network management solutions owned by Veolia, will connect 3 million LoRa smart water meters across France over the next 10 years, in addition to the 3 million smart meters already in use.

In 2020, China Telecom claimed to have more than 20 million smart water meters and more than 25 million gas meters connected to its national NB-iot network. Recently, China Telecom updated the NB-iot data, and the number of smart gas meter connections exceeded 42 million, and the number of smart water connections exceeded 32 million, both ranking first in the world.

In Saudi Arabia, a more than 5 million scale NB-iot smart meter project is underway.

In Japan, NICIGAS has retrofitted 850,000 gas meters using Sigfox technology.

 

During 2020, iot vendors reported a surge in demand for all types of IOT applications related to fighting COVID-19, particularly those related to measures to control the spread of the virus and providing supply chain visualization, such as disinfection and cleaning management, and cold chain monitoring for food and medical care. For example, NB-iot door magnets have played a significant role in helping automate the management of quarantine sites during the pandemic, and many NB-iot door magnets have been in short supply or out of stock.

 

Although smart meters are the largest market for LPWAN, domestic and foreign manufacturers have been trying to expand into new areas in recent years. In terms of the domestic market, in addition to water meters and gas meters, fire fighting, white electricity, trackers and other fields are also the direction of further expansion.

 

Fourth, low-power satellite iot connectivity could be a game changer in the long run

 

Over the past few years, several new satellite startups have announced new satellite-based iot communication systems that promise to significantly reduce the cost and power consumption of traditional satellite systems. These satellite communication systems either utilize new IoT airport protocols or existing LPWAN technologies such as LoRa or NB-iot to provide direct communication between IoT devices and satellites in orbit around the globe and can be considered as part of the low-power WAN market.

 

While most vendors are still in the early market stage, and many are in the technology testing and satellite launch stages, a few vendors have already launched commercial solutions. Of course, these solutions are usually limited to specific customers or geographic areas, such as Astrocast, Myriota, and Swarm Technologies (later acquired by SpaceX).

 

IoT Analytics believes that low-power satellite IoT technology is unproven, so the connectivity market will take several years to take off. In addition, most vendors are rolling out their own proprietary solutions rather than agreeing on specific standards. However, these solutions have already delivered on the promise of a dramatic cost reduction in traditional satellite solutions and low cost ubiquitous network coverage that will become a significant market force in the second half of the 2020s or 2030s.

 

Of course, in the author's opinion, satellite Internet of Things will not become the replacement of ground LPWAN, but better integration with ground LPWAN, with its ubiquitous coverage to supplement the shortcomings and breakpoints of ground network. At present, the evolution of 5G related standards and the research on 6G standards take the integration of space and earth network as a key research direction. It can be seen that the Satellite Internet of Things will also become one of the main forces of the Internet of Things in the long run.

 

Fifth, 2G/3G migration brings opportunities, but not along the desired path

 

2G/3G migration brings new opportunities to LPWAN, as users had no choice before, but now there are more suitable iot networks. A number of operators around the world have started 2G/3G network withdrawal plans, especially the 3G network withdrawal speed is faster. In China, the No. 25 document issued by the Ministry of Industry and Information Technology in May 2020 started the prelude of 2G/3G migration and network transfer. Subsequently, operators quickly followed up, for example, China Mobile made it clear that it would not develop 2G Internet of Things users by the end of 2020.

 

However, 2G/3G unwinding has not resulted in the expected rapid take-up of LPWAN, and in many regions, the migration has been slower than expected.

"Entrenched" on the one hand, because of the 2 g network, provides nearly 30 years of service, still bearing the many voice users and the Internet of things, such as China mobile, currently has more than 900 million the number of Internet connection, more than half of the 2 g network load, iot equipment life cycle is very long, in this case, the 2 g can only slow to exit. Some overseas operators expect 2G networks to remain in service for many years, with some not expected to leave service until 2030. On the other hand, LTE CAT. 1 has risen rapidly in recent two years. With the advantage of extensive 4G network and low cost, it has accepted a large number of Internet of Things connections that 2G/3G has withdrawn, indirectly replacing LPWAN to a certain extent.

In 2021, LTE CAT. 1 has become a major force in the growth of cellular IoT, with much more attention than NB-iot.

 

Of course, LPWAN, which has been growing at a double-digit rate, remains one of the most interesting areas in the iot market, as the simplest and lowest-cost wide-area iot solution is now bringing digital opportunities to a wide range of industries. There is no shortage of innovators in this market, nor will there be a winner-takes-all pattern. While NB-iot further solidifies its leading position, non-licensed spectrum technologies such as LoRa and Sigfox are also demonstrating their ability to respond quickly to market demands and serve customers, together driving the boom in the IoT market.