IoT will overtake smartphones in 2018

Connected devices are changing rapidly and IoT, as a category, is about to get bigger than smartphones, says a report.

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Credit: Ericsson

The Internet of Things will become a bigger connected-device category than smartphones in 2018, telco equipment maker Ericsson says in its latest report.

The Swedish company reckons that IoT will grow globally at a CAGR of 23 percent during the period 2015 to 2021, it says on its website.

CAGR, or Compounded Annual Growth Rate, is the annual growth rate over the period.

That would make IoT a 16 billion unit player by 2021. For comparison, the entire smorgasbord of connected devices will number 28 billion by then, Ericsson says in the report (PDF), published this week.

5G take-up will be faster than 4G was, it thinks. One major reason for that speed-up is that “5G development is being driven by new use cases,” the report explains. “Greater capacity will allow more devices to be connected,” Ericsson says. “And lower energy requirements will extend device battery lives more than ten times what we see today.” The as yet unratified 5G tech is expected to be available by 2020, pundits believe.

Ericsson is forecasting 150 million 5G subscriptions worldwide by the end of 2021.

But it’s in IoT, and in particular cellular IoT, that Ericsson, an equipment maker, is understandably bullish on. It reckons cellular IoT is going to have the biggest growth of “the different categories of connected devices,” it says. Cellular IoT will get to 1.5 billion devices by 2021, it claims. There are currently about 400 million IoT devices fed by cellular as of the end of 2015, Ericsson says.

The company sees two kinds of IoT markets: The first, “massive IoT connections” includes “smart buildings, transport logistics, fleet management, smart meters and agriculture.” Those kinds of small data traffic-requirement, and low outlay and running cost-required connections, are suited to wide area networks via a common gateway. In other words, although Ericsson doesn’t actually say it, those applications don’t really need cellular connections.

The second market, which it terms “critical IoT connections,” includes “traffic safety, autonomous cars, industrial applications, remote manufacturing and healthcare, including remote surgery,” Ericsson says.

That market would be well suited to LTE. Cost, however, is the stumbling block for cellular. While the sensors are cheap and getting cheaper, the rest of it, such as mobile bandwidth isn’t. Cellular costs. Ericsson says that by limiting LTE modems specifically to IoT, thus reducing complexity, it will reduce costs and provide the low latency pipes that this genre needs.

Connected cars will drive a lot of the IoT connections, it believes.

Mobile data traffic continues to grow. Ericsson says it saw data traffic grow by 60 percent between Q1 2015 and Q1 2016. The firm projects mobile traffic to grow 12 times between 2015 and 2021. The CAGR is around 45 percent.

North America leads growth in data traffic per smartphone. In 2021, monthly smartphone data per active subscription in North America will be 22 GB of use.

Video will drive the majority of it.

I wrote about Ericsson’s February 2015 Mobility Report. It reckoned then that mobile video would grow about 45 percent annually through 2020. It now thinks that category will grow 55 percent per year through 2021. More than it thought, in other words. Video will ultimately make-up two-thirds of all mobile data, Ericsson says.

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