LTE Router/Gateway Market to Reach $1.9 Billion in 2022

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A new report from International Data Corporation (IDC) presents IDC's inaugural forecast for the worldwide LTE router/gateway market for the period 2018–2022. It follows the release of IDC's initial forecast for 5G carrier network infrastructure in November 2018.

While LTE macro networks have been in place for several years in the consumer market, LTE is seeing stronger uptake as a way to provide reliable failover or as a primary WAN connectivity solution in the enterprise. Heightened demand is fed by new enterprise applications requiring cost-effective ways to connect to the cloud or, in another instance, internally across a geodispersed private network.

"The app-driven economy continues to change how enterprises architect networks, given the mission-critical nature of network connectivity. As such, we expect enterprise network, IT, and IoT practitioners to lean more heavily on LTE routers as an incremental connectivity option for existing wired connections, or even as the primary connection depending on the use-case," said Rohit Mehra, vice president, Network Infrastructure, at IDC.

While IDC sees LTE router/gateway suppliers benefitting from these trends, the supplier landscape remains largely fragmented. IDC has observed a number of leading suppliers begin to distance themselves in revenue and growth metrics; however, differentiation will remain challenging as the market matures. Early-stage markets often require thought leadership and ecosystem development to ignite stronger growth patterns. As such, IDC observes three main use cases that LTE router/gateway suppliers are moving to address:

• Branch connectivity: Products designed for stationary, onsite functionality are often integrated with LTE, WiFi, and wired functionality. In addition, solutions often incorporate enhanced security features (e.g., firewall, threat management). An overarching software-defined component, often delivered from the cloud, can be incorporated to deliver enhanced management and coordination.
• Mobile connectivity: Mobile LTE routers are often affixed to vehicles, rail systems, or other "on the move objects" that require connectivity. An emerging use case is for public safety networks, including first-responder networks, where cellular connectivity can meet the stringent demand for mission-critical communications.
• Internet of Things/M2M: These solutions, which can be gateways, often offer a base feature such as protocol conversion but may incorporate the advanced features included in branch and mobile solutions as well.

Worldwide, IDC expects the LTE router/gateway market to grow from approximately $804.2 million in 2018 to $1.9 billion in 2022 at a compound annual growth rate (CAGR) of 27.4%. Regionally, North America will remain the largest consumer of LTE routers/gateways, but Asia/Pacific, including Japan and China, will grow the fastest over the forecast period supported by continued expansion and/or densification of macro LTE networks in the region.

"The enterprise LTE appliance market is seeing rapid uptake globally, prompting incumbent suppliers and new players to seek differentiation to demonstrate value. Some are focusing on the software layer, or wireless SD-WAN, while others are leaning on their technology heritage in addressing IoT requirements. Whatever the strategy, branch, mobile, and IoT are emerging as the three main use cases for LTE routers and gateways," said Patrick Filkins, senior research analyst, IoT and Mobile Network Infrastructure.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and engages the most influential technology buyers.