Imagine a scenario where groundbreaking 5G technology can revolutionize industries, but the key component to unlock its full capabilities, specialized IoT devices, is still lagging behind. This reality is what the private 5G market faces today. The advancement of the private 5G industry is hampered by the delayed availability of IoT devices, particularly RedCap devices, despite standards for these devices being established over two years ago. Based on the “Mobile Experts Readiness Wheel,” the current situation can be compared to a car with a flat tire; although networks, spectrum, and edge computing are ready, the device immaturity is stalling progress.
Device Readiness: A Hindrance to Market Growth
The Lag in IoT Device Availability
Despite significant strides in network development, spectrum allocation, and edge computing capabilities, the private 5G market is stalling due to the slow emergence of IoT devices. The essential RedCap devices are a case in point—they are crucial for specific applications but remain largely unavailable two years after their standards were set. This lag has resulted in an unbalanced ecosystem where infrastructure is ready, but the lack of suitable devices creates a bottleneck. This scenario is analogous to a “wheel with a flat tire,” as described in the “Mobile Experts Readiness Wheel.” It vividly illustrates the disparity between the readiness of network components and the unavailability of necessary devices.
The impact of this lag is far-reaching, affecting industries that rely on advanced IoT applications, such as manufacturing, logistics, and smart cities. These sectors require tailored IoT solutions to capitalize on 5G capabilities fully. The current focus of IoT module suppliers on high-volume applications like asset tracking exacerbates the issue. While asset tracking is projected to ship over 4 billion units annually by 2034, these devices are primarily designed for wide-area networks, leaving niche private cellular applications underserved. The delay in device availability means that industries eager to adopt 5G technologies must either wait or incur significant costs in developing customized solutions.
Subsidizing Development for Faster Progress
A potential solution to address the device readiness gap involves network vendors and managed service providers (MSPs) subsidizing the development of specialized IoT devices. This approach could help bridge the profitability gap that discourages IoT module suppliers from investing in niche applications. Currently, IoT module suppliers prioritize high-volume markets where the return on investment is more assured. This focus leaves sectors such as private cellular networks, which might require customized modules for specific applications like automating a seaport, without the necessary device support.
By shouldering some of the development costs, network vendors and MSPs can stimulate the creation of specialized IoT modules, incentivizing suppliers to expand their product offerings. This subsidy-based model could accelerate the availability of devices, which would enable private 5G networks to support a broader range of applications sooner rather than later. It also addresses the complexities associated with different air interface standards, frequency bands, and MIMO and duplex variations in IoT modules, which are significant barriers for device manufacturers. This collaborative approach promises to unlock new revenue streams for all stakeholders and drive future high volumes within the IoT market.
Collaboration and Innovation: The Way Forward
Building Industry Coalitions
The overarching trend in the private 5G market points to a need for greater collaboration and innovative business models to overcome current bottlenecks. Industries must work together to address the readiness issue of IoT devices. Forming coalitions among companies within the 5G ecosystem is one approach that could generate effective solutions. By pooling resources and sharing expertise, these coalitions can tackle the problem of device immaturity more efficiently than any single entity could manage alone.
Such collaborative efforts could lead to the standardization of development processes and harmonization of regulatory requirements, lowering the barriers for IoT module suppliers to enter niche markets. These coalitions could also advocate for incentives and funding from governmental bodies, further supporting the development of specialized devices. As a result, the collective effort would create a more robust and faster-growing private 5G market, enabling industries to reap the benefits of advanced IoT applications without prolonged delays.
Innovative Business Models
Exploring innovative business models can help overcome the challenges facing the private 5G market. By developing new ways to subsidize and incentivize the creation of specialized IoT devices, stakeholders can ensure that the necessary components are available to take full advantage of 5G technology. This collaborative effort promises to drive the private 5G market forward, enabling industries to achieve the transformative potential of advanced IoT applications.