IoT Will Snag 28% of the Wireless Chip Market by 2021

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Chipmakers, particularly those that specialize in multi-protocol wireless integrated circuit (IC) solutions, will be busy over the next few years.

Anticipating massive growth, the Internet of Things (IoT) will account for 28 percent of the wireless chip market by 2021, predicts technology analyst firm ABI Research. As the IoT spreads its web of connections to smart homes, wearables and beacons, device makers will increasingly turn to chips that can handle more than one wireless connectivity standard.

The shift has already started.

ABI Research analyst Andrew Zignani noted in a statement that, last year “witnessed a growing trend toward the development of multiprotocol connectivity SoCs [system-on-chips] for the IoT, some of which support both Bluetooth Smart and 802.15.4.” Intended for low-power, comparatively low-bandwidth wireless personal area networks, the IEE’s 802.15.4 standard is one of among several connection technologies IoT device makers are exploring.

Earlier this week, ABI Research predicted that the market for ZigBee, Thread and other 802.15.4-based technologies would grow by leaps and bounds, attaining a compound annual growth rate (CAGR) of 60 percent between 2016 and 2021. By then, 802.15.4 will be supported by more than 28 percent of connected devices, excluding smartphone and consumer electronics.

Competing technologies like Bluetooth Low Energy (LE) will also be a major draw for device vendors. ABI Research expects a CAGR of 34 percent for Bluetooth LE device shipments between 2016 and 2021.

And don’t count Wi-Fi out. Wireless sensors and other power-sipping IoT devices using the HaLow standard (802.11ah) will help Wi-Fi find a home in nearly half (47 percent) of all connected devices by 2021.

The Wi-Fi Alliance unveiled the Wi-Fi HaLow moniker in January during the Consumer Electronics Show (CES) in Las Vegas. “Wi-Fi HaLow is well suited to meet the unique needs of the Smart Home, Smart City, and industrial markets because of its ability to operate using very low power, penetrate through walls, and operate at significantly longer ranges than Wi-Fi today,” said Edgar Figueroa, president and CEO of the Wi-Fi Alliance, in a statement at the time.

Going forward, supporting multiple wireless technologies may be the best bet for chipmakers pursuing the IoT opportunity.

“Devices that incorporate multiprotocol chipsets will be more futureproof,” continued Zignani. “While a product might utilize Bluetooth in the short term, a device manufacturer may want to switch to Thread in the future or have the ability to talk to multiple connectivity protocols once deployed.”

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.