5G RedCap technology is emerging as a potential game-changer for IoT device manufacturers, providing a seemingly viable pathway for migrating from LTE. Nevertheless, as per the insights of global technology intelligence firm ABI Research, the journey towards its extensive implementation might be fraught with difficulties.
Tailored as a befitting substitute for LTE Cat-4 and Cat-6, 5G RedCap is aimed at mid-range IoT devices that don't demand the complete spectrum of 5G capabilities. ABI Research anticipates that the revenues from IoT RedCap modules will hit $1.2 billion in the period from 2024 to 2029.
Notwithstanding the ostensibly rosy projections, the short-term uptake of 5G RedCap is beleaguered by hurdles.
Jonathan Budd, an Industry Analyst at ABI Research, remarks, "Although device OEMs are displaying a palpable enthusiasm for 5G RedCap, the IoT revenues are prone to remain constricted in the near term due to the exorbitant module prices. In 2024, 5G RedCap modules are slated to be priced around the $50 level, which, in certain instances, amounts to a threefold price hike compared to LTE Cat-4 modules."
This substantial price disparity presents a formidable impediment for manufacturers.
"Absent the immediate jeopardy of LTE network shutdowns, device OEMs are improbable to effectuate an upgrade, save for devices with extended lifespans," elucidates Budd. "The majority of IoT OEMs will refrain from paying for a technology that they don't presently require; as a replacement technology for LTE, the average selling prices (ASPs) of 5G RedCap modules must be slashed by at least 50% to render RedCap economically feasible for manufacturers."
The scenario takes an interesting turn with the advent of eRedCap modules in 2026. These are estimated to be merely 25% costlier than Cat-1 modules, with a price range of $10 to $15 per unit.
With a more pervasive 5G Standalone coverage anticipated by 2026, the migration towards eRedCap is expected to gather momentum at a swifter pace than that of 5G RedCap. ABI Research forecasts cumulative eRedCap sales of $615 million from 2026 to 2029, predominantly in the domains of security, telehealth, point-of-sale, and remote monitoring devices.
However, 5G RedCap has not been sidelined from the competition.
"Revenues from 5G RedCap are only projected to soar following the release of optimized second-generation chipsets in 2026. Paired with augmented manufacturing volumes, we ought to witness a 50% reduction in 5G RedCap module ASPs by 2027, instigating an additional wave of migration from LTE," Budd concludes.
This paper is from Ulink Media, Shenzhen, China, the organizer of IOTE EXPO (IoT Expo in China)
