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China's Overbearing Share of Smart Meter Connections Portends Future Issues for Its IoT Competitiveness

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News provided by

ABI Research

18 Oct, 2016, 14:53 GMT

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Smart Meter Connections to Dwarf All Other China IoT Markets at 63% Connection Share

OYSTER BAY, New York, Oct. 18, 2016 /PRNewswire/ -- Smart meters are China's largest IoT application segment thanks to China's massive investments in its utility infrastructure. ABI Research finds that more than 45% of China's IoT connections today stem from smart meters. When measured by cellular and fixed line connections, more than 63% are smart meters, with that percentage expected to climb over the next five years. The net result may mean lopsided investments in IoT that eventually undercut China's competitiveness in the global market.

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China's meter, module, and gateway vendors—including Holley Metering, Kaifa Technology, and Wasion Group for electricity, gas, and water meters, as well as Neoway, SIMCom, and ZTE for cellular modules— will benefit from local utilities sourcing from local Chinese OEMs. ABI Research also expects proprietary LPWA technologies to play a role, with LoRa to be the likely winner; though, this is highly dependent on how other vendors position themselves to appeal to Chinese markets. But there is a downside to such market dominance, which is the region's lack of investment in two critical IoT services markets.

"Concentrated IoT investment may mean other application segments do not get the attention deserved, particularly in advanced analytics and professional services," says Dan Shey, Managing Director and Vice President at ABI Research. "If China's goal is to modernize industries, IoT is a strategic technology sector, but it dictates investments in the specific IoT application markets serving those industries."

Advanced analytics and professional services both require a vibrant, competitive market. Investment in advanced analytics needs to be broad-based, because each connected machine and object is unique in the data that defines its attributes and operation. Professional services, meanwhile, command a broad range of applications/development, systems integration, solutions/hardware design services, and strategic consulting services.  A healthy supply of system integrators and value-added resellers providing professional services is critical for filling in the IoT solution gaps. In both service segments, if the IoT opportunity is far smaller in the non-smart meter segments, lack of competition will limit innovation and solution quality.     

"The bright side could be more opportunities for non-Chinese firms to fill in for lack of local suppliers and skill sets," concludes Shey. "The growing population in China's urban centers means opportunities for smart city services integration beyond metering markets, particularly in autonomous driving. China's aging population also portends growth in smart home, patient monitoring, and aging-in-place services. But all of these opportunities are at the mercy of China's fragmented regulatory environment, which already hinders market access to foreign fleet telematics and smart meter vendors."

These findings are from ABI Research's IoT Market Tracker - Worldwide (https://www.abiresearch.com/market-research/product/1025384-iot-market-tracker-worldwide/). This report is part of the company's IoT, IoE & M2M sector (https://www.abiresearch.com/market-research/practice/ioe-enterprise-m2m/), which includes research, data, and analyst insights.

About ABI Research

ABI Research stands at the forefront of technology market research, providing business leaders with comprehensive research and consulting services to help them implement informed, transformative technology decisions. Founded more than 25 years ago, the company's global team of senior and long-tenured analysts delivers deep market data forecasts, analyses, and teardown services. ABI Research is an industry pioneer, proactively uncovering ground-breaking business cycles and publishing research 18 to 36 months in advance of other organizations. For more information, visit www.abiresearch.com.

Contact Info:
Mackenzie Gavel
Tel: +1.516.624.2542
pr@abiresearch.com

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