Berg Insight has released new findings about the market for cellular IoT gateways, routers and modems. More than 3.4 million cellular IoT gateways were shipped globally during 2018, at a total market value of approximately $921 million. Growing at a compound annual growth rate (CAGR) of 18.5 per cent, annual shipments are expected to reach 8.0 million in 2023. Cellular IoT gateways are standalone devices intended for connecting machines to a cellular network. These include general-purpose cellular gateways, routers and modems that are enclosed in a chassis and have at least one input/output port. Trackers, telematics devices and other specialised devices are excluded from this report.
North American vendors dominate the cellular IoT gateway and router market. Cradlepoint, Cisco, Sierra Wireless, CalAmp and Digi International are the largest vendors worldwide. Combined, these five vendors generated close to $500 million in annual revenues from cellular IoT gateway and router sales during 2018, accounting for a market share of 53.3 per cent. Other important vendors include Multitech Systems, Systech and Encore Networks in the US, InHand Networks, Robustel and NetComm in the Asia-Pacific region, and HMS Networks, Advantech B+B SmartWorx, Matrix Electrónica, NetModule, Eurotech, Westermo and Option in Europe.
The European and Asia Pacific markets are fragmented with many small and medium sized players that generate annual revenues in the range of $3–10 million. The North American market is dominated by a handful of major vendors, largely due to entry barriers in the form of carrier certifications required for cellular devices in the region.
“North America experienced the fastest growth globally during 2018, driven by deployments in the public safety, transportation and retail sectors”, Fredrik Stalbrand, senior analyst, Berg Insight, said. The region has also been subject to significant merger and acquisition activity in recent time. “Deal activity has been low over the past decade but has picked up since the beginning of 2018,” Stålbrand added. He mentions as examples the recent deals such as Lantronix’ purchase of Maestro Wireless Solutions in July 2019 and most recently Digi International’s announced acquisition of Opengear in November 2019. In Europe, Westermo acquired the remote access specialist Virtual Access in November 2019, expanding the company’s presence in the utilities sector. “Several players continue to have inorganic growth as a strategy and further consolidation can be expected among IoT gateway vendors in 2019–2020,” Stalbrand concluded.