Inventory stacking, a response to the Covid-19 pandemic, spurred growth in the cellular module market in 2021 and continued into 2022, recent findings from ABI Research show.
However, by 2023, this had reversed, resulting in a shipment decline of over 5% compared to 2022. Despite this, the rise of Cat-1bis has buoyed the market. According to a new report from ABI Research, forecasts indicate that Cat-1bis will replace nearly 70% of the Cat-1 market by 2029.
Historically, many Cat-1 IoT devices were designed with a single antenna, which sometimes required carrier approval for use on their networks. Given the widespread coverage of LTE networks, a single antenna was often sufficient.
Device OEMs and chipset vendors identified an opportunity to further reduce costs by developing a dedicated Cat-1bis chipset that utilises a single antenna for both sending and receiving functions. This innovation not only lowered power consumption but also reduced component costs. The Cat-1bis standard in 3GPP Release 13 formalises the previously informal use of single antenna Cat-1 devices, whereas the original Cat-1 specification in 3GPP Release 8 required two antennas.
Commenting on the new data, Dan Shey, Vice President, Enabling Platforms at ABI Research, said: “Like many new developments in the cellular IoT market, China is leading with deployment of Cat-1bis. Outside of China, Cat-1bis penetration is much lower since it is typically the replacement technology for new device designs. Regardless of region, based on the benefits of Cat-1bis relative to other cellular technologies, we see Cat-1bis becoming the number two technology choice for cellular IoT applications by 2029.”
Cat-1bis offers several benefits, including lower costs. Outside China, Cat-1bis modules are at least 30% cheaper, with even greater reductions within China. Network roaming is another advantage, as 4G roaming agreements are well-established, unlike the current challenges with NB-IoT and Cat-M. Additionally, the Cat-1bis standard formalises the use of a single antenna. The primary concern will be connection reliability for stationary applications. For battery-powered IoT applications, placing a Cat-1bis device where cellular coverage is poor could reduce battery life as single antenna devices struggle to connect to the network.
There is, however, another perspective on Cat-1bis in the market. Shey explained: “Presently, it is unclear if the chipset vendors will invest in new Cat-1bis chipsets. At Mobile World Congress and more recently at Asia Tech Expo, RedCap was being pushed not only by module suppliers but also by the device OEMs and the chipset community. 5G RedCap is creating an opening to drive 5G device volumes in the IoT domain. The calculus by the 5G supplier community is 5G capabilities – low latency, location granularity, and future-proofing against LTE sunsets will convince more customers to invest in these higher revenue products.”
With Cat-1bis representing a near-term opportunity and 5G RedCap a longer-term prospect, both technologies are attracting increased investment across the supply chain. Chipset vendors will be crucial in the development of modules and devices for both technologies. Qualcomm, Sequans, UNISOC, and ASR are supporting both; development outside China is primarily led by Qualcomm and Sequans.
There’s plenty of other editorial on our sister site, Electronic Specifier! Or you can always join in the conversation by commenting below or visiting our LinkedIn page.
