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Wireless technologies to comprise 55 percent of connectivity IC shipments in 2018, IHS Markit says

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Driven by the colossal Internet of Things (IoT) opportunity, wireless technologies—including wireless local area network (WLAN), Bluetooth, cellular and low-power wireless—will account for 55 percent of connectivity integrated circuit (IC) shipments in 2018, according to a new report from business information provider IHS Markit.

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Over the next five years, wireless connectivity will play an increasingly crucial role in market segments including automotive and transportation, commercial and industrial electronics, communications, computers, consumer and medical.

“Massive IoT use cases requiring long battery life, deep coverage and mobility are fueling demand for cellular and low-power wireless,” said Julian Watson, senior principal analyst for IoT at IHS Markit. “WLAN, Bluetooth and Zigbee are already entrenched in the home automation and consumer electronics segments. And in the coming years, wireless is going to have a huge impact on industries such as healthcare, where providers will lean heavily on wireless connectivity to track and trace costly equipment across large sites and to monitor the condition of patients within domestic settings.”

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The IoT opportunity is also spurring competition among wireless technologies such as Bluetooth, Wi-Fi and Long Term Evolution (LTE) and challengers like long-range wide area network (LoRaWAN), Sigfox and Thread. “The diversity of IoT use cases requires multiple technologies, and because of this we’ll see competition between technologies intensify,” Watson said. “The end result is that connectivity technologies will either compete, complement or combine—and whatever is most cost-effective will win out.”

Five connectivity technologies to watch

In its new Connectivity Technologies report, IHS Markit identifies five connectivity technologies to watch:

5G

The move to 5G will trigger significant investment across the value chain from 2020 to 2030, with $2.4 trillion in capital expenditures during this time frame. 5G will start by addressing enhanced broadband uses cases, but industry, not humans, will be the chief 5G driver. Most growth in new subscriber connections will come from industrial use cases rather than consumer markets.

Narrowband IoT (NB-IoT)

NB-IoT enables connectivity in devices used in a wide array of applications such as utilities, digital sensor monitoring, agriculture, location-based services and smart cities. Strong NB-IoT deployment in China and Europe will continue, while LTE Cat-M1 will remain dominant in the US. Asia is projected to account for 88 percent of global NB-IoT connections in 2020.

LoRa

Despite intense competition from NB-IoT, LoRa is the low-power WAN (LPWAN) technology of choice for private networks and non-traditional service providers such as cable operators due to its accessibility and differentiation. LoRa has earned a leading role in the LPWAN market, with more than 32 million nodes shipped in 2017, growing to over 57 million nodes in 2018.

Bluetooth mesh

Bluetooth’s momentum and massive installed base gives it an advantage that will be hard for incumbent technologies like Zigbee to challenge. Although it is still perceived as a consumer technology, mesh technology will allow Bluetooth to cross over into commercial and industrial applications such as lighting and building automation, with an anticipated 392 million lighting and building automation device shipments in 2022.

802.11ax

As greater numbers of Wi-Fi–enabled devices are added into homes and enterprises, the 802.11ax standard will gain more prominence in the marketplace and is expected to become the de facto Wi-Fi standard in the next decade. The 802.11ax market will grow rapidly beginning in 2020, after the Wi-Fi alliance launches a certification program. 802.11ax chipset revenue is expected to reach $855 million in 2022.

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