RedCap chip debuts as scheduled, accelerating the 5G IoT industry

Recently, Qualcomm announced the launch of the world's first 5G RedCap modem and RF system, the Snapdragon X35. Qualcomm said that the Snapdragon X35 is the lowest power chip produced by the company to date, compatible with all frequency bands below 6GHz, FDD and TDD bands, supports LTE networks, and positions it as a long-term migration path to replace LTE CAT4+ devices.

The commercialization time of RedCap chips directly affects the development rhythm of 5G Internet of Things. It is reported that Snapdragon X35 is expected to start shipping samples to customers in the first half of this year, and commercial mobile terminals are expected to be released in the first half of 2024, which is basically in line with industry expectations.

In the past few years, 5G has been put into use in a large number of industries, and RedCap is considered an important driving force for the large-scale application of 5G To B. Since the 5G R17 standard was frozen in 2022, the industry has been calling for the commercial use of RedCap. This time, Qualcomm has taken the lead in launching the industry's first modem chip that supports the 5G RedCap specification. It is expected that all mainstream chip manufacturers will follow suit to accelerate the commercialization of RedCap.

Close collaboration of the industry chain will lead to the commercialization of RedCap

In the past year of 2022, the development of RedCap technology and industry can be described as "good news".

As the backbone of the industrial ecosystem, the three major operators have completed the first batch of 5G RedCap end-to-end laboratory testing and verification, and actively promoted the commercial use of 5G RedCap. Previously, China Mobile Research Institute released the "China Mobile 5GRedCap Technology White Paper", which clarified the technical positioning of RedCap in the 5G system, deeply analyzed the key technical characteristics of RedCap, and on this basis, carried out RedCap market prospect analysis and adaptability research with key application scenarios to enable RedCap to better serve market demand.

China Unicom released the "China Unicom 5G RedCap Technology White Paper" and stated that it will focus on typical RedCap scenarios such as industrial control, energy and electricity, video surveillance, and vehicle networks, actively fill the gap in low-priced products in the industry, and form a key segmented scenario product system with price advantages, creating 5G flagship products that can both meet user needs and have high cost-effectiveness.

China Telecom announced that its IoT open laboratory has completed 5G RedCap laboratory technology verification with Huawei and built the world's first open laboratory with 5G R17 standard RedCap joint testing capabilities. The multi-scenario laboratory verification of RedCap technical features provides technical empowerment support for China Telecom's multiple industry private network tests, and has become a high-quality platform for 5G To B innovation incubation and ecological construction in the RedCap field.

At the same time, relevant equipment manufacturers including Huawei, ZTE, China Information and Communications Technology Group, Ericsson, Nokia Bell, etc. have also completed the key technical functions and field performance tests of 5G base stations supporting RedCap; in terms of chips and modules, mainstream chip manufacturers such as Qualcomm, Unisoc, MediaTek and leading domestic and foreign wireless module suppliers are actively participating in and promoting the development of RedCap, and have started related research and development work in advance, including the currently launched Snapdragon X35; in terms of industry applications, RedCap has won the favor of many vertical industries, and industries such as manufacturing, electricity, smart cities, and security have invested heavily to promote the definition and adaptation of RedCap in specific scenarios, technologies and product solutions.

With the close collaboration of the industry chain, the RedCap industry has now taken shape, and the industry generally expects that RedCap will be commercialized in the second half of this year.

Large-scale commercial use is a protracted battle, and there is still a long way to go before it can take over the main role.

It has become a social consensus that the Internet of Things is the "main battlefield" for 5G applications, especially for applications in various industries of the national economy. Most 5G connections come from IoT terminals. After several years of development, 5G industry applications have blossomed and achieved remarkable results, paving the way for the application of the Internet of Things in various industries.

At present, my country's Internet of Things has formed a rapid development trend. As of August last year, the number of mobile Internet of Things connections exceeded the number of mobile phone users for the first time, achieving "things surpassing people". However, the development of 5G Internet of Things seems to be still in its early stages. Compared with other forms of Internet of Things connections, the scale of 5G Internet of Things connections is not enough to support it to become the "protagonist".

The latest data from market research firm Juniper Research predicts that the number of global 5G IoT connections will be 17 million in 2023, and is expected to increase to 116 million by 2026. As a key link between high-speed and low-speed scenarios, RedCap can leverage the advantages of 5G networks and support access to a large number of industry application scenarios, but its large-scale commercial use is a "long-term" process.

First, although RedCap will achieve a significant cost reduction relative to high-performance 5G terminals, the corresponding application scenarios also put forward some higher requirements for the design of chips and modules, such as a significant reduction in size, which to a certain extent increases the R&D cost of chip modules. Therefore, the price of RedCap modules is expected to be around 200 yuan in the early stage of commercial use, and it is expected to be on par with the current Cat.4 after large-scale commercial use, and drop to around 60 to 80 yuan. Therefore, RedCap will inevitably have to go through the test of time and shipments before it can get rid of its "supporting role" status.

In terms of network coverage, although my country has built the world's largest 5G network, compared with the 4G network with more complete coverage, the depth of 5G network still needs to be improved, especially in special scenarios such as indoors.

In addition, the Internet of Things is a long-tail market, involving operators, equipment manufacturers, chip and module manufacturers, application manufacturers, etc. Although the RedCap industry has taken shape, the collaboration of all parties in the industry chain still needs time to run in, and it is even more necessary to create an open and cooperative industry ecosystem.

A previous report released by Counterpoint showed that 5G RedCap modules will be available in 2024, RedCap will begin to be used on a large scale by 2027, and its shipments will exceed 4G Cat.4 by 2029. This should be a relatively reasonable expectation.