Reduced Capability (RedCap) aims to provide a cheaper alternative to full 5G, offering a natural replacement for the LTE categories on which manufacturers of mid-range IoT devices frequently rely. 5G RedCap offers comparable throughput performance to LTE Cat-4 and LTE Cat-6, while enhanced RedCap (eRedCap) delivers equivalent throughput performance to LTE Cat-1 and Cat-1bis. ABI Research, a global technology intelligence firm, expects devices in Remote Monitoring and Control, Video Surveillance and Security, and Fixed Wireless Terminals to be the first to migrate to 5G RedCap. Between 2024 and 2029, approximately 50 million RedCap module shipments are forecast across these application segments, equating to 58% of the IoT RedCap market.

“RedCap is mostly considered as a replacement technology, to provide an affordable migration pathway from LTE. 5G RedCap is drawing interest across the IoT value chain, with Video Surveillance and Fixed Wireless Terminal Routers and Gateways dominating the first device launches in 2024,” explains Jonathan Budd, Industry Analyst at ABI Research. “Devices with lifecycles upwards of eight years are more likely to migrate to 5G RedCap in the near term. Doing so allows manufacturers to future-proof their devices, offsetting some uncertainty surrounding 4G network longevity. There is also strong interest in 5G RedCap from auto OEMs in China and Europe to connect entry-level vehicles.”

In the long term, eRedCap represents the greater market opportunity in terms of unit shipments for the IoT; launches of the first eRedCap chipsets by 2026 should drive another wave of migration from devices with a strong affinity to LTE Cat-1, including those in POS and Telehealth. Interest in 5G RedCap is not confined to the IoT, and many of the devices launched to date are for Mobile Broadband and Fixed Wireless Access applications. For the IoT specifically, most device launches fell within two areas. First, the domain of Fixed Wireless Terminals includes routers and gateways to enable business-critical connectivity fallback in industrial and retail settings, and second, IP cameras for video surveillance.

China and North America will move aggressively on RedCap and are expected to account for approximately 80% of RedCap shipments in 2029. “With accelerated 5G Standalone rollouts and the expectation of more imminent phasing out of LTE networks, China and the United States are likely to lead the early RedCap module shipments for IoT markets,” concludes Budd.

These findings are from ABI Research’s 5G RedCap for IoT application analysis report. This report is part of the company’s IoT Hardware & Devices research service, which includes research, data, and ABI Insights. Based on extensive primary interviews, Application Analysis reports present an in-depth analysis of key market trends and factors for a specific technology.