satellite iot forecast 2019 2025 - rethink...satellite iot forecast 2019-2025 authored by alex...

Bristol & Exeter House, Lower Station Approach, Temple Meads, Bristol BS1 6QS Phone: +44 (0)117 329 1480 Email: [email protected]

R E T H I N K T E C H N O L O G Y R E S E A R C H

Satellite IoT Forecast 2019-2025

Authored by Alex Davies

Reaching $5.9bn by 2025, with 30.3mn devices, fight with LPWAN will start turning bloody towards end of period

Companies mentioned in this report: Actility, Amazon, Astrocast,

Eutelsat, Fleet Space Technologies, Globalstar, GOMSpace, Hiber,

hiSky, Inmarsat, Iridium, John Deere, Kepler Communications,

Kinesis, Lacuna Space, LoRa Alliance, Myriota, NanoAvionics,

Orbcomm, SES O3B, Sigfox, Sky and Space Global (SAS), SpaceX

(Tesla), Swarm Technologies.

Total LPWAN Connections

Total LPWAN Revenue ($)

“L e a d i n g t h e w a y w i t h i n d e p e n d en t t h ou g h t a n d n o r e g u r g i t a t e d a n a l y s i s ”

Executive Summary

Copyright © 2019 Rethink Research, All rights reserved.

2

Contents 2

Graphs 3

Introduction 4

The Current Marketplace 6

Comparison to LPWAN 8

Device Growth 10

Global Market 12

Global Revenue by Sector 13

Use Cases 15

Agriculture 17

Industrial 18

Utility 19

Automotive 20

Enterprise 21

Logistics 22

Summary 23

Regional Markets 24

North America 24

Latin America 25

Europe West 26

Europe East and CIS 27

MENA 28

APAC 29

Summary 30

Methodology 31

About Rethink 32

Contents


3

Satellite IoT Devices 10

Revenue Breakdown 11

Global Revenue by Macroeconomic Sector – 2019 12

Global Revenue by Macroeconomic Sector – 2025 13

Global Revenue by Sector 13

Global Revenue by Sector – 2019 14

Global Revenue by Sector – 2025 14

Revenue by Region – Agriculture 17

Share of Global Total Market - Agriculture 2025 18

Revenue by Region – Industrial 18

Share of Global Total Market - Industrial 2025 19

Revenue by Region – Utility 19

Share of Global Total Market - Utility 2025 20

Revenue by Region – Automotive 20

Share of Global Total Market - Automotive 2025 21

Revenue by Region – Enterprise 21

Share of Global Total Market - Enterprise 2020 22

Revenue by Region – Logistics 22

Share of Global Total Market - Logistics 2025 23

Revenue by Sector – Global 23

Revenue by Sector - North America 24

Share of Global Total Market - North America 2025 24

Revenue by Sector - Latin America 25

Share of Global Total Market - Latin America 2025 25

Revenue by Sector - Europe West 26

Share of Global Total Market - Europe West 2025 26

Revenue by Sector - Europe East & CIS 27

Share of Global Total Market - Europe East & CIS 27

Revenue by Sector – MENA 28

Share of Global Total Market – MENA 28

Revenue by Sector – APAC 29

Share of Global Total Market – APAC 29

Revenue - Regions Summary 30

Share of Global Total Market - Regions 2025 30

Graphs


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The global market for IoT-focused satellite services, focused on end-

device connectivity hardware and the annual connectivity fees

charged, will grow to $5.9bn in 2025, after taking off in the 2021-2022

period. Incumbent satellite providers will be pressured by a new

wave of startups that are leveraging the recent advances in smaller

satellite technologies, but many of these new entrants are going to

strike out or be absorbed by their larger and entrenched rivals.

The costs of entry to this market are much smaller than just a few

years ago, thanks to improvements in the launch technologies as well

as miniaturization of the satellites themselves, with Low Earth Orbit

(LEO) designs now weighing just 10kg and some not larger than two

shoeboxes. LEO networks are able to provide lower power consump-

tion for end devices, and they can be deployed in a modular fashion,

expanding as more customers or funding becomes available.

While terrestrial LPWAN networks have taken hold, they have not

achieved the sorts of footprints first promised by the most enthusias-

tic marketers. While much of the nanosatellite marketing can be cri-

tiqued in the same fashion, there are vast swathes of the earth that do

not have LPWAN coverage but could make use of these low-cost sat-

ellite networks.

For the incumbent satellite providers, IoT-focused customers could be

a nice way to improve their margins, especially in the increasingly cut

-throat broadband and broadcast satellite market. For the nanosatel-

lite startups, these are hugely lucrative opportunities for companies

that don’t have to take on anywhere near the level of capex burden

that the incumbent satellite network operators have been saddled

with.

However, this market is still around 3x smaller than the terrestrial

LPWAN market, according to Riot Research’s recent market forecast,

Introduction


5

despite higher hardware and connectivity revenues per device.

While some of the industries involved do overlap with LPWAN,

these satellite devices will not compete directly with LPWAN de-

ployments all that frequently, due to their use cases having much

better tolerances and allowances for the power consumption of the

end device.

Connectivity is often said to be between 10% and 20% of the total

cost of ownership (TCO) for an application, and because of this,

higher value applications are likely going to drift towards satellite or

non-LPWAN cellular options, as these applications are going to be

able to justify or settle for having to swap batteries out when needed.

The unlicensed spectrum LPWAN (U-LPWAN) markets also have to

solve the global roaming problem quickly, in order to counter the

marketing narrative from the satellite community – that satellite is

the only way to get truly global coverage.

While there are an estimated 2.5mn satellite IoT devices deployed

currently, we expect that 2021 will see a major jump in deployed de-

vices, as the first few startups begin launching their constellations

and supporting live customers. When viewed on a graph, this pre-

sents as an initial bump that slows the next year, before a period of

prolonged growth settles in.

Because of the scalability of nanosatellites, more units can be added

to a constellation to support more devices, should the maximum

throughput threshold be met. However, there will be some wasted

resources, as many of these startups will be competing directly with

each other. Should a startup fail, they will be adding to the cloud of

space junk orbiting the earth – as it is not clear how easily another

operator could take over these communications assets, in the wake of

a bankruptcy.

By 2025, we expect there to be some 30.3mn Satellite IoT devices de-

ployed globally, growing at a CAGR of just under 40%. We expect

this growth to begin to flatten off in around 2027, due in part to the


6

spread of terrestrial rivals for Satellite IoT connectivity, and improve-

ments in fixed and local networks that can be used as alternatives for the

global satellite ones.

In terms of usage, we

have identified key

use cases within the

three main elements

of the global econo-

my – Agriculture, In-

dustry, and Services.

We expect Agricul-

ture to grow from

18% of initial demand

to 26% by the end of

the forecast period,

with Industry grow-

ing from 20% to 32%,

and Services dimin-

ishing from 62% of initial demand to 42%. The respective CAGR for

each sector is 48.8%, 51.4%, and 31.2%.


7

Methodology

The data collected for the report was drawn from a series of inter-

views with operators, equipment vendors, silicon designers, and de-

vice manufacturers. It draws on Rethink Technology Research’s

deep knowledge of the markets, as well as Riot Research’s expertise

in the IoT. Public documents and filings, and private confessions,

have been combined with and used to corroborate the forecast.

Riot Research maintains a demographic model that charts a range of

criteria that help us profile countries. This ranges from population

projections, landmass usage and urban population data, household

income and spending, broadband internet and mobile usage,

transport infrastructure and usage, and national productivity and

economic data.

This demographic model formed the basis of initial projections, for

the key regions and countries we were interested in. From this, we

can then determine the value of each of the vertical market and val-

ue chain classifications, which are modeled through the period.

These adjustments are based on our research and experience with

the sectors and other markets, and are intended to create a top-level

view of the sector.


8

Just who should buy this report and what will it do for them?

This report is for anyone at C-Suite and strategy level who is trying

to cost a major IoT application, using a network for collection. This

report shows that you must now consider satellite as well as both li-

censed and unlicensed LPWAN. It will help you understand which

technology is the best way to collect your data, and if you are in Agri-

culture, Industry, and Services, it is likely to be via on of the new

Low Earth Orbit satellite networks.

There are multiple types of satellite and a massive number of new

market entrants, and this report will help you understand each of

them, what they are capable of sensing from space, and how you are

likely to be charged for using satellites to collect IoT data.

This is a sprint to around 2027 with the market growing at 40%

CAGR each year, because satellite is such a strong option, outweigh-

ing the benefits of LPWAN in key circumstances.

And if you are one of the early market users of this technology, you

are likely to be able to attract low pricing and massive reach using

satellite IoT, as there are new entrants using nano-satellites, vying for

market share with older, established satellite players and larger satel-

lites. The price cutting will be brutal. There will be a race for each of

them to collect enough business to balance their initial cost base.

This is a 33 page report with comprehensive graphs and diagrams

showing how this market will break into different value layers, and

who we expect to take the market lead.

The full report can be purchased via our e-commerce store.

https://rethinkresearch.biz/store/category/riot-research/


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Riot Research: Forecasting the elements of the IoT

Riot Research is the forecasting service attached to Riot (our Rethink IoT

service). Riot is a weekly publication which highlights and analyses all

the important events in IoT, and Riot Research is the monthly forecast

attached to the service looking at AI, Cloud Security, LPWANs and low

power networks as well as sensors, actuators and chip markets.

Riot has been published for 4 years, but the Riot Research forecasts were

introduced this year.

Riot consists of two parts:

1) Circa 10 long-form articles which discuss and analyse the week's

events and disruptions in IoT including Around the Web—A curation of

news which affects the IoT with links to sources.

2) A monthly forecast focused on IoT technologies

Here are some sample titles of reports we have produced recently:

• IoT Security Revenue — Forecast to 2023

• Smart Home as a Service — Forecast to 2023

• AI: Show me the Money—Forecast to 2023

• LPWAN Revenue Key Opportunities —Forecast to 2023

Subscription Costs

Annual 1-5 User license - $1,850 (A group license permits up to 5 users).

Annual corporate license - $3,700 (unlimited distribution inside your or-

ganization).


10

Alex Davies—Principal Analyst and Editor of Riot

[email protected]

+44 (0)117 329 1480

Philip Hunter—Research Fellow at Rethink Research

[email protected]

+44 (0)208 682 0862

Peter White—Co-founder and CEO

[email protected]

+44 (0)117 925 7019

Caroline Gabriel - Research Director

[email protected]

+44 (0)207 450 1230

www.rethinkresearch.biz

RIOT RESEARCH MAIN CONTRIBUTORS

RETHINK LEADERSHIP

https://rethinkresearch.biz


11

Rethink is a thought leader in quadruple play and emerging wireless

and IoT technologies. It offers consulting, advisory services, research pa-

pers, plus three weekly research services; Wireless Watch, a major influ-

ence among wireless operators and equipment makers; Faultline, which

tracks disruption in the video ecosystem, and OTT video. Riot Riot fo-

cuses on enterprise transformation and disruption, from the combina-

tion of IoT technologies with emerging cloud computing and AI applica-

tions.

About Rethink Technology Research

NEED MORE INFORMATIO N?

Natalia Szczepanek (Marketing and Client Relations Manager)

[email protected]

+44 (0)117 925 7019


12

Bristol & Exeter House Lower Station Approach

Temple Meads Bristol

BS1 6QS United Kingdom

Tel. +44 (0) 1173 291480 Tel. +44 (0) 1179 257019

www.rethinkresearch.biz

Published July 2019

satellite iot forecast 2019 2025 - rethink...satellite iot forecast 2019-2025 authored by alex...

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