5G and Cellular-Based IoT Networks: Market Trends and Security
Market OverviewAt first, there was the internet, then mobile devices came along, and then devices became “connected”, launching the IoT networks revolution. Gartner predicts that in 2019 we’ll witness 14.2 billion connected things in use, and that this number will nearly double in the next couple of years, totaling in 25 billion by 2021. This rapid growth is made possible by several factors, all maturing at roughly the same time:
- Reduced cost of devices and connectivity modules
- Reduced cost of communication, storage and analytics
- Transition in architecture from gateway-based topologies (devices connect to a gateway, the gateway connects to the cloud) to device-to-cloud direct communication topologies.
IoT NetworksThese technologies include U-LPWA unlicensed low power wide area networks (such as Sigfox and LoRa) as well as cellular licensed LPWAN technologies such as LTE-M, NB-IoT and 5G once available. By the end of 2020 it is expected that the number of cellular-based IoT devices will surpass U-LPWA to become the dominant wide area technology, and by 2022 70% of the wide area IoT devices would be cellular-based (1.5 billion devices in 2022 vs. 400 million in 2016). By 2022, the NB-IoT market size is expected to reach $8.2B with CAGR of 91.3%.
Vertical Use CasesNB-IoT based applications are spread across multiple domains and use cases:
- Smart Cities: Smart parking management, waste management, street lights…
- Logistics and Asset Tracking: Containers, vehicles, devices.
- Transportation: Connected cars.
- Energy: Smart metering including water, gas, and electricity.
- Smart Buildings: Alarm systems, access control, HVAC
- Smart Home: Multiple sensors
- Wearables: people tracking, animal tracking, health monitoring
- Agriculture: Environmental monitoring, pollution monitoring
Complexity of the Cellular IoT Value ChainThe IoT value chain includes 4 key players:
- Device manufacturers and solution providers
- System integrators
- IoT network operators and service providers
- Actual end customers (network users)
- Device Manufacturers and Solution Providers: Represent the lowest level of the value chain, the commodity. This end of market encompasses almost any piece of electronic equipment that can be connected- from refrigerators to light bulbs. Advancements in technology and lower costs of connectivity modules will ensure that prices this will continue to be an extremely competitive market, dominated by huge electronics manufacturers. One caveat is, that in the journey to slash costs (and maintain the slimmest of margins) security and assurance will be swept aside in favor of “time to market” considerations. So, instead of more robust devices we’re expected to see more rudimentary devices flooding the global markets, facilitating cyber breaches and subsequent attacks.
- System Integrators: Moving from the commodity to the corporate and government world, systems integrators are an integral part of the value chain. Similar to the role large SI played in “digital transformation” projects of the past 20 years, modern SIs will facilitate the adoption of large-scale IoT deployments, such as safe and smart cities.
- IoT Network Operators and Service Providers: IoT service providers play a crucial role in this eco-system. They are the actual backbone of the IoT, much like cellular providers were the infrastructure that enabled the mobile revolution 2 decades ago, or the cloud providers 10 years ago. IoT network operators and service providers are a combination of these two- both enabling the communication, the massive storage required and the analytics layer to monetize it. The actual constellation changes- sometimes these are the telco operators that own and operate the networks (such as 3G/4G, LoRa, NB-IoT and 5G networks), other times they are the providers of dedicated IoT cloud services, and sometimes a combination of them both.
- End- Users: As is the case with IoT these are also multi-faceted. End-users could be actual consumers, electronic companies providing IoT services, municipalities consuming (and delivering) IoT services, corporates and governments. What is certain that just like the 2 great movements that preceded it (mobile, cloud) we will all be soon be dependent on the IoT eco-system functioning well and without interferences to manage our daily lives.