IoT analyst firm Berg Insight released a report forecasting that 5G will make its first appearance in the IoT market in late 2020. The initial 5G cellular IoT modules will become available to developers this year, enabling early adopters to create the first IoT devices based on the standard.
Based on the experience of previous introductions of new standards, 5G will however not be an instant hit. By 2023, Berg Insight forecasts that 5G will account for just under 3 percent of the total installed base of cellular IoT devices.
“5G still has some way to go before it can become a mainstream technology for cellular IoT”, says Tobias Ryberg, Principal Analyst and author of the report. “Just like 4G when it was first introduced, the initial version of 5G is mostly about improving network performance and data capacity. This is only relevant for a smaller subset of high-bandwidth cellular IoT applications like connected cars, security cameras and industrial routers. The real commercial breakthrough will not happen until the massive machine type communication (mMTC) use case has been implemented in the standard.”
mMTC is intended as an evolution of the LTE-M/NB-IoT enhancements to the 4G standard. Since NB-IoT has only just started to appear in commercial products, there is no immediate demand for a successor.
Over time, fifth generation mobile networks will however become necessary to cope with the expected exponential growth of IoT connections and data traffic.
The report also identified homeland security as an area where 5G cellular IoT can have a major impact already in the early 2020s.
“5G enables the deployment of high-density networks of AI-supported security cameras to monitor anything form security-classified facilities to national borders or entire cities”, says Mr. Ryberg. “How this technology is used and by whom is likely to become one of the most controversial issues in the next decade.”
Last week, the analyst form also estimated that the global number of cellular IoT subscribers increased by 70 percent during 2018 to reach 1.2 billion. Growth was driven by exceptional adoption in China, which accounted for 63 percent of the global installed base. By 2023, Berg Insight now projects that there will be 9.0 billion IoT devices connected to cellular networks worldwide.
“China is deploying cellular IoT technology at a monumental scale”, said Tobias Ryberg, Principal Analyst and author of the report. “According to data from the Chinese mobile operators, the installed base in the country grew by 124 percent year-on-year to reach 767 million at the end of 2018. The country has now surpassed Europe and North America in terms of penetration rate with 54.7 IoT connections per 100 inhabitants.”
The Chinese government is actively driving adoption as a tool for achieving domestic and economic policy goals, at the same time as the private sector implements IoT technology to improve efficiency and drive innovation. Berg Insight believes that the role of the government is the main explanation for why China is ahead of the rest of the world in the adoption of IoT.
Like other advanced economies, the country has widespread adoption of connected cars, fleet management, smart metering, asset monitoring and other traditional applications for cellular IoT. It has also given rise to new consumer services enabled by connectivity like bike sharing.
The most distinctive characteristic of the Chinese IoT market is however the way that the government is systematically using new technology to implement its vision for urban life in the 21st century.
