Cellular IoT gateway shipments projected to reach eight million by 2023

The cellular internet of things (IoT) gateway market is ramping up quickly, with more than 3.4 million shipped globally in 2018 with a total market value of more than $920m, according to analysis from mobile market research specialist Berg Insight.

Berg defines cellular IoT gateways as standalone devices for connecting machines to a mobile telecoms network. These include general-purpose cellular gateways, routers and modems that are enclosed in a chassis and have at least one input/output port. It excludes trackers, telematics devices and other specialised device.

If the market grows at the 18.5% compound annual growth rate (CAGR) that Berg predicts, annual shipments will reach eight million in 2023.

Its analysis also showed that North American suppliers dominate the cellular IoT gateway and router market, with the largest suppliers worldwide being Cradlepoint, Cisco, Sierra Wireless, CalAmp and Digi International. Combined, these five were calculated to have generated almost $500m in annual revenues from cellular IoT gateway and router sales in 2018, accounting for a market share of 53.3%.

Other key suppliers included 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 North American market is dominated by a handful of major suppliers, largely because of entry barriers in the form of carrier certifications required for cellular devices in the region. By contrast, the European and Asia Pacific markets were revealed to be fragmented, with a large number of small and medium-sized players that generate annual revenues ranging from $3-10m.

“North America experienced the fastest growth globally during 2018, driven by deployments in the public safety, transportation and retail sectors”, said Berg Insight senior analyst Fredrik Stalbrand.

“The region has also been subject to significant merger and acquisition activity in recent times. Deal activity has been low over the past decade, but has picked up since the beginning of 2018. Several players continue to have inorganic growth as a strategy and further consolidation can be expected among IoT gateway vendors in 2019-2020.”

Examples of recent deals cited in the Global cellular IoT gateway market report include Lantronix’s purchase of Maestro Wireless Solutions in July 2019 and Digi International’s announced acquisition of Opengear in November 2019. In Europe, Westermo acquired remote access specialist Virtual Access in November 2019, expanding the company’s presence in the utilities sector.