IoT value chain revenue to exceed $20bn by 2025

• The total addressable revenue for mobile operators in IoT will be over $200bn by 2025. The total revenue of solutions supported by traditional cellular (e.g. 2G, 3G, 4G) and LPWA (e.g. NB-IoT, LoRa) is forecast by Analysys Mason to reach $201bn in 2025.
• Spend on connectivity will be $28bn in 2025, just 14% of this total addressable market.
• Mobile operators and other players in the value chain are seeking additional incremental value by offering other components of the value chain in addition to connectivity; hardware and applications.
• For new LPWA networks, connectivity will generate a much lower share of the total spend than for IoT solutions using traditional cellular.
• For traditional cellular (e.g. 2G, 3G, 4G) the application component generates 72% of the value in 2025, with hardware contributing 11% and connectivity 17%. The application layer is a big opportunity for all players in the value chain and mobile operators are developing solutions to take a greater role in the applications component.
• For LPWA, the largest share of revenue is generated by hardware, 49%, with applications contributing 43% and connectivity only eight percent. LPWA networks address high-volume sectors (such as smart metering), so large volumes of devices will be deployed.
• For traditional cellular the biggest market is Automotive (connected car). The total value chain will reach $63bn in 2025. Application will be 76% of the total value, connectivity will constitute 19% and the remainder will be hardware related revenue.
• For LPWA the biggest markets are Utilities and Smart Buildings.
  • The Utilities market will generate $21bn in 2025. Hardware constitutes 55.5%, applications 38.5% and connectivity six percent.
  • The Smart Building market will grow to $17bn in 2025. Hardware will comprise 55.7%, applications 39.6% and connectivity 4.7% of total revenue.

The report also highlights how geographic split of the revenue differs significantly for traditional cellular and LPWA.

• Emerging Asia–Pacific (principally China) will be the largest individual region generating 24% of traditional cellular revenue in 2025. China has driven cellular IoT adoption in many sectors.
• Developed regions (including Western Europe, Central and Eastern Europe, Developed Asia-Pacific and North America) will generate the largest share of LPWA network revenue throughout the forecast period, contributing just over 75% of total revenue in 2025.