Low-Power Wireless Modules Set for Good Growth as Usage and Popularity Continue
El Segundo, Calif. (March 11, 2014)—The global market for low-power wireless modules serving up quick wireless turnkey solutions is poised to enjoy strong double-digit growth this year, spurred by wide adoption in applications such as residential automation as well as consumer electronics, according to a new report from IHS Technology (NYSE: IHS).
Revenue worldwide for the low-power wireless modules market will reach $1.40 billion this year, up a robust 14 percent from $1.23 billion in 2013. This will be the third consecutive year of expansion for the market in the double digits, to be repeated for a fourth and final time next year, after which growth moderates slightly to the mid and high single digits, as shown in the attached figure.
"Low-power wireless modules play an important role in the wireless ecosystem, providing a turnkey solution that includes a radio, microcontroller, nonvolatile memory and antenna—all in a small, affordable package," said Lee Ratliff, principal analyst for connectivity at IHS.
Modules are very popular in low-volume applications because they eliminate the high non-recurring development expenses associated with radio frequency (RF) design, verification and certification, Ratliff noted. Here modules can offer manufacturers a short cut around often lengthy development times.
But modules also find favor in devices that ship in millions of units, Ratliff added, because they simplify manufacturing and increase flexibility. A single module design, for instance, can be reused across multiple product SKUs, easing the headache of supporting numerous unique RF designs while reducing supply chain complexity and risk.
Modules can also give life to an old product by upgrading the wireless performance without changing the overall hardware design of the product.
Where growth resides: application markets that matter
The fastest-growing markets for low-power wireless modules in the years to come will be in sports and fitness monitoring, with a compound annual growth rate (CAGR) of 49 percent. Other important markets of note are consumer electronics with a CAGR of 36 percent, automotive with 32 percent and residential automation with 30 percent, IHS data show.
All told, the underlying growth in the use of low-power wireless technologies in these markets will be the primary reason for the increase in shipments of low-power wireless modules. A secondary reason for expansion is the high rate of module use in rapidly growing technologies like Bluetooth Smart, EnOcean, ZigBee RF4CE and Z-Wave.
An important trend in the adoption of low-power wireless technology is the move away from proprietary protocols, Ratliff observed. Proprietary protocols made up 88 percent of module shipments in 2011, but they will only account for about 50 percent by 2018.
The falloff is driven by a growing trend among commercial buyers wishing to avoid being locked into a single vendor and to achieve interoperable communications across diverse systems, and by consumers wanting devices to communicate with mobile platforms like smartphones, tablets and laptops.
Bright prospects down the road
The market for low-power wireless modules will be robust from 2011 to 2018 and well beyond, IHS forecasts, because the factors that lead to manufacturers choosing modules are unlikely to change considerably in the next five to 10 years. And while each application has a volume break where modules start to lose their appeal, the break point may be lowered in the future by evolving product development trends, given the market's long tail. Many applications will never approach even that reduced volume break, IHS believes.
For their part, some high-volume, price-sensitive applications will continue to choose modules to allow manufacturing flexibility and design reuse among multiple SKUs, which will also be helpful to preserving vigor in the low-power wireless module market. As an example, one has to look no further than the success of Wi-Fi modules in high-volume applications—and to deduce the same for lower-power wireless modules and their attendant applications.
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