Counterpoint: The shipment volume of cellular IoT modules in the Chinese market in the first three quarters of 2024 increased by 25% year-on-year.

According to Counterpoint's latest "Global Cellular IoT Module and Chip Tracking Report," in the first three quarters of 2024, the shipment volume of cellular IoT modules in the Chinese market increased by 25% year-on-year. The main driver of this growth is the 4G Cat 1 (bis) network standard modules, which doubled in shipment volume during this period and increased their share of total shipments from 40% to 64%. Due to the improved construction of the 4G network in China and the influence of market competition in recent years, 4G Cat 1 (bis) has become the best choice for most medium-low speed application scenarios, even replacing the lower-cost NB-IoT modules in some scenarios. At the same time, the shipment volume of eMBB 5G modules also increased by 73%. Although 5G Redcap has garnered attention in 2024, its shipment volume did not meet industry expectations due to relatively high pricing and unclear application scenarios. In 2020, with the maturity of 4G infrastructure and the commercialization of 5G, the Ministry of Industry and Information Technology (MIIT) of China issued guidance policies, officially starting the 2G/3G network shutdown work, which became a turning point for the rapid development of the 4G Cat 1 industry. In 2024, MIIT issued multiple documents, clarifying key development indicators for cellular IoT, especially for 5G and 5G Redcap. For example, it is expected that by the end of 2027, there will be 100 million IoT connections on 5G. The guidance documents also proposed the development direction for cellular IoT applications, highlighting three key areas: industrial digitalization, smart social governance, and intelligent civilian life. These areas will generate more demand in applications such as high-precision positioning, smart grids, smart sensors, smart homes, healthcare, and automotive. The integration of IoT and AI is also a key area worth exploring. Cellular IoT has evolved beyond just data transmission. With the increasing application of AI and improved edge computing capabilities, more advanced functions will be introduced, significantly enhancing the overall value of the IoT industry. With strong support from regulatory authorities, 2025 will be a key year for the development of cellular IoT towards the next stage of 5G. Unlike the mature development of the 4G IoT ecosystem, the widespread application of 5G IoT not only relies on the expansion of downstream applications but also requires support from network infrastructure. According to the MIIT's plan, by the end of 2027, the number of 5G base stations per ten thousand people will increase from the current approximately 30 to 38. Continuous coverage of 5G Redcap networks also needs to be further strengthened. In addition, in the most important industrial scenarios for 5G applications, the construction of virtual private networks and standalone private networks will be a key focus in the coming years. Therefore, the development of 5G and 5G Redcap depends on network operators playing a role in driving the overall development of the 5G industry as integrators of capabilities. As a crucial link between networks and applications, IoT modules have been promoted by various operators using different strategies. For example, China United Network Communications has lowered the cost of 5G modules through customized chip frequency bands, with shipments exceeding 200,000 in the first three quarters of 2024, leading in the CPE device area. China Mobile Limited may continue to implement aggressive sales strategies. This strategy has previously successfully enabled them to occupy a 9.2% market share in global module shipments in the third quarter of 2024. During the rapid development of the 4G IoT, module and chip manufacturers played a leading role. In contrast, in the development process of 5G IoT, network operators will play a more critical role. Counterpoint Research predicts that the shipment volume of 5G and 5G Redcap modules in China will increase by 42% year-on-year in 2025, marking the highest expected growth rate for network standards.