The Internet of Things (IoT) has witnessed significant transformations throughout 2024, reflecting a broader trend towards enhanced connectivity and integration across various industries. According to a recent report from Berg Insight, global IoT connectivity revenues are projected to reach €14.2 billion by the end of 2024, marking a substantial increase of 12% from the previous year. As technology continues to evolve, the market is adapting to new standards and greater complexities, paving the way for an impressive future ahead.
Growth Trends in Cellular IoT
Berg Insight’s comprehensive analysis outlines ambitious estimates for the future of cellular IoT connectivity. By 2029, the report forecasts that the number of connected IoT devices will surge to 6.4 billion. This growth is anticipated to contribute to connectivity revenues that could reach €22.4 billion. As it stands, the total global number of cellular IoT subscribers has already expanded by 14% in 2024, reaching approximately 3.8 billion—around 30% of all mobile subscribers worldwide. This growth trajectory suggests a robust future for cellular IoT, with a compound annual growth rate (CAGR) of 11% expected over the next four years.
However, while the number of connected devices and subscribers continues to grow, the revenues generated from IoT connectivity are not experiencing a commensurate rate of increase. Specifically, while revenues increased by 12%, the average revenue per user (ARPU) has seen a decline, dropping from €0.33 to €0.30. This disparity raises questions about pricing strategies in the IoT space as more devices connect to networks without translating to higher revenue per connection.
Regional Insights and Market Leaders
When considering geographical breakdowns, China stands out as the leading market for cellular IoT connectivity services, boasting an impressive 1.42 billion connections. In fact, the Chinese market accounts for approximately 70% of the global IoT installed base. The country’s regulatory environment and proactive government policies have significantly contributed to this growth, with a focus on leveraging IoT technology to tackle pressing societal challenges like energy conservation, traffic management, and public safety.
China Mobile is the largest provider in this sector, followed by competitors China Telecom and China Unicom. Berg Insight attributes China’s lead in IoT adoption to government initiatives encouraging the private sector to invest in large-scale deployments, setting a precedent for other regions to follow. Major Western operators have also made notable strides with Vodafone leading the pack with 204 million connections. AT&T comes in second among Western operators with 143 million connections, followed by Deutsche Telekom and Verizon, each managing around 56-60 million connections.
The Role of IoT Managed Service Providers
IoT managed service providers are emerging as crucial players in the ecosystem, with many operating as mobile virtual network operators (MVNOs). These operators typically offer IoT connectivity services through a mix of roaming and local access agreements, often providing additional value-added services targeted at specific industries. Berg Insight’s report highlights several prominent managed service providers, including KORE, Soracom, and Tata Communications, which collectively managed over 200 million cellular IoT connections by the end of 2024, generating approximately €1.8 billion in annual revenues.
Future Considerations
The rapid expansion of IoT technologies and services signifies a pivotal shift in how businesses operate. As more devices become interconnected, industries are likely to experience increased efficiencies, enhanced data analytics, and improved customer experiences. However, the challenge remains for providers to find sustainable revenue models that align with the ongoing growth in connections. Monitoring price trends and adapting strategies will be essential for stakeholders looking to maximize their opportunities in the evolving IoT landscape.
As connectivity continues to play a crucial role in this transformation, the evolution of IoT standards and technologies will further shape the industry. Analysts anticipate that advancements in cellular technologies, especially the rollout of 5G networks, will unleash new capabilities and applications for IoT devices, ultimately leading to an even greater integration of IoT in our daily lives.
In summary, the trajectory of the IoT market demonstrates a promising future characterized by dramatic growth in device connectivity and revenues, albeit with challenges regarding revenue per user. The interplay between technological advancements, regulatory support, and market dynamics will be critical in determining how this sector evolves in the coming years.