Counterpoint Research highlighted a pandemic-induced demand for connected devices was wearing-off, as it reported a five per cent year-on-year drop in Q2 cellular IoT module shipments for segments outside of automotive and telematics.
In its latest report on the market, which excludes telematics and embedded automotive, the analyst company pointed to lower demand and weaker global economic sentiment as significant factors impacting the sector.
It noted outside of smart metres and point of sale (POS) devices most areas experienced a “sharp drop” in shipments.
Modules for smart metres, POS and asset trackers accounted for around 56 per cent of the entire market in Q2, it added. The top three use cases made-up 43 per cent of shipments in Q2 last year.
Geographically, the company pointed to India as the only country to book quarterly shipment growth.
Discussing Q2, the analyst company’s associate director Mohit Agrawal said: “many of the module players experienced shipment declines as the market shrunk for the first time since the start of covid-19. The pandemic-induced demand for connected devices is wearing off while the digital transformation efforts in industrial and other key verticals are yet to translate into shipments”.
In the market’s future prospects, Counterpoint senior research analyst Soumen Mandal noted: “The adoption of 5G technology has been slower than expected, primarily due to its higher costs, coverage issues and maturity of the 5G device ecosystem. The forthcoming 5G RedCap [reduced capacity] has the potential to become the industry’s game changer by offering a more affordable solution.”
For the whole year Counterpoint is forecasting the sector to be broadly flat compared to 2022.