Cellular M2M Shipments by Air Interface

5G is the first 3GPP-standardized technology to support the IoT from the outset. So why did LTE account for nearly three quarters of all cellular IoT modules shipped in 2021, a share set to increase to more than 90% by 2026? To be clear, all cellular IoT will become 5G in time. But what about 5G actively driving demand for new IoT connections? The IoT is a market of efficiency, that thrives off the maximal availability and affordability of mature technologies. 5G is not there yet, nor will be for some years to come. Connected cars, and fixed wireless terminal applications are the low-hanging fruit for 5G, being markets that hunger for raw throughput.

For other IoT applications 5G’s utility is more nuanced, in manufacturing and healthcare for example, where time-critical services benefit from low latency, especially in private networks. But these are sectors that do not adopt technologies on a whim and require extensive industry testing first. For most other use cases, established and yet-to-be established, LTE is “good enough”, just as Wi-Fi has been. And herein lies 5G’s problem. It needs to be as available and as affordable as LTE, and is likely to receive no premium for its abilities above and beyond LTE. LTE-M and NB-IoT have become part of the 5G standard and will constitute an inherited market without technology migration, becoming 5G mMTC. But otherwise, markets must anticipate NR RedCap in 3GPP release 17, and low-cost RedCap in Release 18 - which may yet cause their own confusion and hesitation for device OEMs - for 5G to stand up to the mainstream use of LTE in the IoT.