The global number of industrial IoT connections will increase from 17.7 billion in 2020 to 36.8 billion in 2025, representing an overall growth rate of 107%, Juniper Research found.
The research identified smart manufacturing as a key growth sector of the industrial IoT market over the next five years, accounting for 22 billion connections by 2025.
The research predicted that 5G and LPWA (Low Power Wide Area) networks will play pivotal roles in creating attractive service offerings to the manufacturing industry, and enabling the realisation of the ‘smart factory’ concept, in which real-time data transmission and high connection densities allow highly-autonomous operations for manufacturers.
5G to maximise benefits of smart factories
The report identified private 5G services as crucial to maximising the value of a smart factory to service users, by leveraging the technology to enable superior levels of autonomy amongst operations.
It found that private 5G networks will prove most valuable when used for the transmission of large amounts of data in environments with a high density of connections, and where significant levels of data are generated. In turn, this will enable large-scale manufacturers to reduce operational spend through efficiency gains.
Software revenue to dominate industrial IoT market value
The research forecasts that over 80% of global industrial IoT market value will be attributable to software spend by 2025, reaching $216 billion. Software tools leveraging machine learning for enhanced data analysis and the identification of network vulnerabilities are now essential to connected manufacturing operations.
Research author Scarlett Woodford noted: “Manufacturers must exercise caution when implementing IoT technology, resisting the temptation to introduce connectivity to all aspects of operations. Instead, manufacturers must focus on the collection of data on the most valuable areas to drive efficiency gains.”
Operator‑billed revenue from 5G connections will reach $357 billion by 2025, rising from $5 billion in 2020, its first full year of commercial service, according to Juniper Research.
By 2025, 5G revenue is anticipated to represent 44% of global operator‑billed revenue owing to rapid migration of 4G mobile subscribers to 5G networks and new business use cases enabled by 5G technology.
However, the study identified 5G networks roll-outs as highly resilient to the COVID-19 pandemic. It found that supply chain disruptions caused by the initial pandemic period have been mitigated through modified physical roll-out procedures, in order to maintain the momentum of hardware deployments.
5G connections to generate 250% more revenue than average cellular connection
The study found that 5G uptake had surpassed initial expectations, predicting total 5G connections will surpass 1.5 billion by 2025. It also forecast that the average 5G connection will generate 250% more revenue than an average cellular connection by 2025.
To secure a return on investment into new services, such as uRLLC (Ultra-Reliable Low-Latency Communication) and network slicing, enabled by 5G, operators will apply this premium pricing for 5G connections.
However, these services alongside the high-bandwidth capabilities of 5G will create data-intensive use cases that lead to a 270% growth in data traffic generated by all cellular connections over the next five years.
Networks must increase virtualisation to handle 5G data traffic
Operators must use future launches of standalone 5G network as an opportunity to further increase virtualisation in core networks. Failure to develop 5G network architectures that handle increasing traffic will lead to reduced network functionality, inevitably leading to a diminished value proposition of its 5G network amongst end users.
Research author Sam Barker remarked: “Operators will compete on 5G capabilities, in terms of bandwidth and latency. A lesser 5G offering will lead to user churn to competing networks and missed opportunities in operators’ fastest-growing revenue stream.”
A new study from Juniper Research has found the total value of the CPaaS (Communications-Platform-as-a-Service) market will reach $25 billion in 2025; rising from $7 billion this year. CPaaS platforms provide a centralised management service for outbound communications including SMS, OTT business messaging, RCS and voice services.
CPaaS market success
The new study predicted that, despite enabling new capabilities, over 95% of CPaaS revenue will be attributable to SMS in 2020 owing to the ubiquity of SMS amongst mobile subscribers. However, by 2025, SMS will drop to 70% of revenue, as alternative rich media messaging solutions gain traction in the CPaaS space.
The research forecasts that RCS Business Messaging will be the second highest source of CPaaS revenue over the next five years; accounting for 15% of global revenue by 2025. It highlights the ability to support multiple communication technologies as being critical for CPaaS vendors; helping them to increase the value proposition of their platforms for brands and enterprises, by providing a centralised management service for multiple outbound mobile communication technologies.
CPaaS vendors must implement payment capabilities
The research identified payment capabilities as key to maximising the value of CPaaS services for both mobile subscribers and CPaaS service users over the next five years. It predicts that growth of rich media messaging technologies, such as RCS, will provide the perfect platform to grow mobile payments over messaging channels as the number of RCS-capable mobile subscribers grows over the next five years.
Research author Sam Barker remarked, “‘CPaaS vendors must demonstrate the additional value their platforms can provide to brands and enterprises, with payments services being the primary way by which CPaaS vendors can increase their market appeal”.
This represents a growth of 130% over the next 4 years. The research identified the industrial sector as a key driver of this growth. It forecast that this expansion will be driven by the increasing use of private networks that leverage cellular networks standards.
Industrial sector to account for a total of 60 billion IoT connections
The research found that the industrial sector, including manufacturing, retail and agriculture, will account for over 70% of all IoT connections by 2024. It anticipated that the emergence of cost-efficient private cellular networks would be a key driver of growth over the next 4 years, and expects that the recent increase in demand for private LTE networks will carry forward to private 5G networks as the cost of the technology decreases over the next 2 years.
The research forecast that the number of industrial IoT units in service will grow 180% over the next 4 years. Research co-author Sam Barker noted, “Industrial networks will need to scale rapidly as industrial IoT users adopt new technologies to expand the services available on their networks. However, IoT platforms must ensure that the security processes can scale alongside this network growth.”
Growing networks raise new security concerns
The research noted that the increasing complexity of private IoT networks will mean that platforms must implement steps to maximize security in all layers of the IoT ecosystem, including devices, connectivity and the platform itself.
The research urged vendors to implement security procedures that are highly scalable and can cope as network architectures become increasingly complex. It suggested two key areas of focus; the use of network segmentation to mitigate the risks of lateral movement cybersecurity attacks and ensuring that the lifecycle management of network assets is properly maintained.
The total number of 5G connections will reach 1.5 billion globally by 2025, rising from only 5 million in 2019, according to Juniper Research. This is an annual average growth of 150% over the next 6 years.
The new study forecast that the US and South Korea will be the fastest adopters of 5G, with 75% of all 5G subscribers attributable to these two countries by the end of 2020. It found that aggressive pricing strategies and extensive device support have enticed over 5 million subscribers to 5G networks globally in 2019.
US & South Korea, the 5G leaders
The research found that pricing strategies from operators in the US and South Korea have aimed to rapidly migrate users to 5G networks by offering low cost connectivity. However, it warned that this strategy will prolong operators’ primary goal of securing a return on their substantial 5G investment.
Conversely, the research noted that operators in other regions, such as Europe, have focused on maximizing early 5G revenue by applying premium pricing over 4G subscriptions. It urged operators in these regions to expand geographical 5G coverage via basestation rollouts in order to maximise the value proposition of 5G and justify the premium pricing.
Number of 5G connections: What will boost uptake
Additionally, the research forecast that the significant number of 5G-supporting devices will further increase the immediate adoption of 5G connectivity. It noted that early launches of FWA (Fixed Wireless Access) routers will provide operators with an immediate platform to launch broadband services that leverage 5G networks as a last mile solution.
Research author Andrew Knighton remarked, “We expect 5G to be used for over 5 million broadband connections by the end of 2020. Operators will need to provide 5G whose bandwidth and latency matches or exceeds current Internet services. Otherwise, they risk missing out on this valuable new revenue stream.”
A new report from Juniper Research found that facial recognition hardware, such as Face ID on recent iPhones, will be the fastest growing form of smartphone biometric hardware. This means it will reach over 800 million in 2024, compared to an estimated 96 million in 2019.
The new research, Mobile Payment Authentication: Biometrics, Regulation & Forecasts 2019-2024, however notes that the majority of smartphone facial recognition will be software-based, with over 1.3 billion devices having that capability by 2024.
This is made possible by advances in AI, with companies like iProov and Mastercard offering facial recognition authentication that is strong enough to be used for payment and other high-end authentication tasks.
Juniper Research recommends that all vendors embrace AI to drive further developments of capabilities and therefore increase customer acquisition.
Fingerprints to lead remote commerce authentication
The research also found that despite the ubiquitous nature of selfie cameras, fingerprint hardware will remain a dominant element in biometric payments, as sensors expand to emerging markets. Juniper Research anticipates over 4.6 billion smartphones worldwide will have fingerprint sensors installed by 2024, although their usage for payment will be significantly lower than this.
This expansion of biometric capabilities will bring the technology to more eCommerce platforms, as retailers seek to meet enhanced security requirements. Originally envisioned for contactless payment use, the report expects over 60% of biometrically-authenticated payments in 2024 will be for authorizing remote payments.
As the longest running biometric modality, fingerprint payments will take the lead in this market as standards coalesce around the technology more easily than for facial recognition payments.
“Many consumers are now used to making fingerprint-based biometric payments, both for contactless and remote payments,” remarked research author James Moar, a Lead Analyst at Juniper Research. “That familiarity and continued inclusion in smartphones will make it hard to displace in many markets.”