Global IoT connection technology market forecast by type in 2025

As the number of global IoT deployments continues to increase, the compound annual growth rate of global IoT endpoints from 2016 to 2021 is growing at a high rate of 19.4%. IDC estimates that the number of IoT endpoint installations in 2021 will reach 36.1 billion, indicating that the IoT market has great development opportunities. In addition, IDC's research report also puts forward the driving forces and potential resistance of the IoT market.

1. Driving force

1. Device capacity and bandwidth requirements

Expectation: As the deployment of the Internet of Things increases day by day, various devices need to be connected, and the networks of low-bandwidth sensors are dominant in various fields. In this case, LPWAN (Low-Power Wide-Area Network) technology is very suitable for connecting and aggregating sensor data at a low cost.

Impact: LPWAN connections will compete with cellular technologies, so cellular technology vendors will need to establish innovative and flexible pricing mechanisms for large-scale deployments to maintain a competitive advantage.

2. Deployment of 5G networks

Assumption: Many IoT deployments require real-time communication with low latency and the ability to accommodate large amounts of data traffic. 5G networks are expected to be launched to the public in 2019-2020, and AT&T and Verizon in the United States did some early tests in 2017. 5G networks will have faster speeds, larger communication pipes, wider coverage, lower power consumption, and lower latency.

Impact: The emergence of 5G networks is expected to be a boon to cellular communications in the IoT and help cellular communications providers maintain a stronger competitive advantage over LPWAN.

Potential resistance

1. Spectrum and service quality

Expected: For organizations that are considering establishing connected endpoints, the most important thing is to weigh the cost value of various connectivity options against the quality of service. Users of licensed spectrum can guarantee that the service will operate at a specific frequency, but unlicensed spectrum, such as LoRa Technology and Sigfox operators, will find it difficult to guarantee the quality of service.

Impact: Despite the attractive advantages of LPWAN solutions, the poor quality of service of unlicensed spectrum and unique technologies, such as Sigfox and LoRa, will lead end users to use unlicensed spectrum for non-critical applications, which will become a resistance to the development of LPWAN in the near term. However, LPWAN connectivity is an emerging high-growth area. Narrowband IoT and another LPWAN technology have completed 3GPP LPWA certification, and commercial solutions are expected to be launched in 2017.

2. The need for standard setting

Expectation: Although progress has been made in developing standards, relevant organizations have not yet seen actual results in providing and promoting open and data protocols. IDC's research points out that the initial standard protocols designed specifically for the Internet of Things have attracted great interest in the market, and multiple standard organizations are actively developing and marketing their own standards to create the next Internet of Things standard.

Impact: Although it is unclear whether one or more IoT protocols will emerge in the market, this will enable the global IoT market to plan the added value of IoT solutions and achieve the expected benefits for businesses and consumers.