2025-2026 Outlook for Cellular IoT Modules Market: Growth in 2025, Challenges Ahead

The cellular IoT modules market is currently experiencing strong growth, with a significant structural shift towards ultra-low-cost cellular IoT devices. This shift is reshaping vendor economics and design choices globally. The dominance of LTE Cat.1 bis technology in China and India is driving volumes, leading to an alignment of hardware roadmaps and certifications with these ecosystems. However, emerging DRAM constraints surrounding smart modules could potentially slow down high-end industrial digitalization and favor simpler architectures or non-cellular alternatives. Additionally, the early migration to U.S. 5G RedCap technology indicates a more regionally fragmented cellular IoT technology landscape in the future.

Key insights from marketing analysts at Techno Systems Research Co., Ltd. (TSR) highlight the accelerating unit growth in the cellular IoT market, with revenues remaining relatively flat. China, India, and LTE Cat.1 bis are key drivers of this growth, with Europe also witnessing spot-demand for NB-IoT technology. However, DRAM supply disruptions are expected to impact high-end IoT modules, particularly smart modules, between 2026-2027. The market is expanding beyond industrial and commercial applications to include various consumer-type uses. Efforts are also underway to reform the supply chain to address geopolitical concerns, with Chinese suppliers currently dominating the market.

In terms of overall shipments and revenue, the cellular IoT module market is projected to reach 544 million units and USD 3.93 billion in revenue in 2025. Shipments are expected to grow by 23% in 2025, driven by factors such as market expansion in India, new use cases in China and Europe, and recovery from inventory corrections in Western markets. Despite this growth, pricing pressure from China and India, as well as the increasing adoption of LTE Cat.1 bis and NB-IoT technologies, will limit overall revenue growth in 2024–2025. Shipments are forecasted to slow down to 8.8% in 2026, with India and China remaining key demand drivers, while European NB-IoT shipments are expected to decline as penetration peaks. DRAM shortages and rising component costs may negatively impact demand for 4G/5G and smart modules.

The new use cases driving growth in the cellular IoT market include regulatory-driven demand for e-bike trackers in China and emergency traffic light systems in Spain using LTE Cat.1 bis and NB-IoT technologies, respectively. Smart home applications, particularly in China, are also on the rise, with devices such as air conditioners, home appliances, and outdoor IP cameras utilizing LTE Cat.1 bis connectivity over Wi-Fi due to its low prices and data tariffs.

LTE Cat.1 bis technology continues to see global expansion, representing 63% of total cellular IoT module shipments in 2025. Cellular LPWA technologies, on the other hand, are expected to gradually decline, with LTE Cat.M shipments set to recover from oversupply in 2026. 5G adoption remains niche in the cellular IoT market, accounting for just 0.4% of total shipments. However, broader adoption of 5G RedCap and eRedCap technologies is anticipated in 2027–2028, driven by U.S. operators’ transition plans to all-5G networks.

Overall, the cellular IoT market is experiencing significant shifts in technology and market dynamics, with the migration to 5G expected to accelerate in the coming years. As Chinese vendors dominate the market share in both cellular module and chipset segments, the industry is witnessing a significant transformation towards low-cost technologies and regional variations in cellular IoT technology adoption.