Challenges and Flat Growth in the Cellular IoT Module Market for 2024

Recent insights from ABI Research highlight that 2024 is shaping up to be a tumultuous year for cellular IoT module vendors. Initial sales have transpired, yet the comprehensive impact will only become evident in April 2025 when complete annual reports are compiled. With a potential for a grim outlook, the situation seems to be deteriorating further.

Competition has intensified in the IoT landscape, leading to strategic divestments and the consolidation of key players. Jamie Moss, Research Director of IoT Hardware at ABI Research, points out that the market is grappling with the repercussions of overordering that occurred in 2021 and 2022. This was largely driven by device OEMs' attempts to navigate supply chain challenges following the COVID-19 pandemic and an ongoing chip shortage that led to significant operational challenges. The urgency to fulfill demand clouds the judgment on obtainable profit margins and turnover rates.

Throughout 2024, there were expectations that the backlog of OEM module inventories would start to decrease. However, the rebound toward normal sales has been sluggish, disappointing vendors anticipating an upturn. Some companies noted staggering declines of up to 50% in sales within their cellular module segments compared to 2023.

The forecast shows that around 426 million cellular IoT modules shipped worldwide in 2024, yielding around $5.6 billion in revenue, mirroring the market value of 2023. Despite this stagnation, Quectel—the market leader—emerged as a notable exception, fulfilling its 2023 revenue numbers by Q3 of 2024. Unlike many direct rivals, Quectel's diversified interests, including automotive and mobile broadband sectors, afford it a distinct advantage.

Moss elaborates on Quectel’s strategy, which hinges on amplifying shipment volumes and market share instead of focusing solely on profit margins—which have historically hovered around 3%. Meanwhile, newer entrants have attempted to carve out their niches, yet their influence on the broader cellular IoT module market remains minimal. Notably, vendors like Unionman from China are making headway, particularly in low-cost categories with meager turnover figures confined to the domestic market.

Ultimately, the market landscape is shifting, as stalwarts like u-blox have shifted strategies, opting to withdraw from the cellular module space and concentrating on other business lines. This scenario indicates that while the IoT sector overall remains vibrant, the cellular module segment is undergoing significant recalibration. The expectation is that this sector will eventually rebound into a state of normal, sustainable growth, but the current pressures may not allow all vendors to endure.

These findings are derived from ABI Research's comprehensive reports on M2M Embedded Cellular Modules and vendor share metrics, forming a part of their extensive IoT Hardware analytical service, which includes valuable data and expert insights.