The IoT market for reduced capability (RedCap) 5G modules will be driven initially by applications for remote monitoring and control, video surveillance and security, and fixed wireless terminals. Sales of these will contribute around 50 million shipments between 2024 and 2029, equivalent to 58 percent of the total RedCap shipments in the period, reckons ABI Research. It puts the total RedCap IoT module market at about 86.2 million units over the period.
The IoT sector is to pile in on 5G-based RedCap shortly; as it stands, interest in RedCap is mostly for mobile broadband and fixed wireless access (FWA) applications. But RedCap is positioned as a stripped-down and cheaper alternative to regular 5G, with more traditional 4G-LTE capabilities, and holds notable appeal in the IoT market. ABI calls it a “natural replacement for the LTE categories on which… mid-range IoT devices frequently rely”.
As a frame of reference, RedCap offers comparable throughput performance to LTE Cat-4 and LTE Cat-6; enhanced RedCap (eRedCap) delivers equivalent throughput performance to LTE Cat-1 and Cat-1bis. Most RedCap IoT devices can be categorised in two areas, says ABI Research: as FWA terminals, including routers and gateways, for business-critical connectivity fallback in industrial and retail settings; and as IP cameras for video surveillance.
There is also strong interest in RedCap from automotive manufacturers in China and Europe to connect entry-level vehicles, it says. In the longer term, eRedCap offers a greater market opportunity in terms of IoT unit shipments, says ABI Research. The first RedCap chipsets, arriving “by 2026”, should drive “another wave of migration from devices with a strong affinity to LTE Cat-1”. These will include point-of-sale (POS) and telehealth devices, also.
Jonathan Budd, industry analyst at ABI Research, said: “5G RedCap is drawing interest across the IoT value chain, with video surveillance and FWA terminals dominating the first device launches in 2024. Devices with lifecycles upwards of eight years are more likely to migrate to 5G RedCap in the near term. Doing so allows manufacturers to future-proof their devices, offsetting some uncertainty surrounding 4G network longevity.”
China and North America will move aggressively on RedCap and are expected to account for approximately 80 percent of RedCap shipments in 2029, the company reckons. Budd says: “With accelerated [standalone 5G; 5G SA] rollouts and the expectation of more imminent phasing out of LTE networks, China and the US are likely to lead the early RedCap module shipments for IoT markets.” ABI Research has a new report with more information.
