Cellular IoT Modules Hit 612 Million Shipments as Memory Costs Squeeze the Market
Cellular IoT module shipments reached 612 million units in 2025, up 33 percent from the year before, according to new figures from analyst firm Berg Insight. The jump shows how fast factories, vehicles, and utility grids are being wired for always-on connectivity. Yet the same report flags a tougher road ahead as component prices swing and high-end modules lose momentum.
The numbers land at a tense moment for the industry. Connections are still climbing, but the cheap modules that fueled volume growth now face thin margins, while the smart modules that add AI features are being hit by a memory shortage. The result is a market that is growing in units but splitting in value.
Shipments up 33 percent, revenue up 19 percent
Berg Insight said annual cellular IoT module revenues grew 19 percent to 5.6 billion US dollars in 2025, even as unit growth ran hotter at 33 percent. The gap between the two rates tells the story: more modules shipped, but each one sold for less. Price competition among Chinese suppliers has been fierce, and that pressure is not letting up.
The firm tracks modules that carry SIM cards and connect devices to mobile networks. These sit inside everything from e-bikes and asset trackers to point-of-sale terminals and energy meters. A 33 percent annual increase means roughly one in every thirteen people on Earth now accounts for a new cellular IoT module each year.
The first slowdown in AI-enabled modules
A more worrying signal came from the high end. Industry trackers noted that AI-embedded cellular IoT module shipments fell 17 percent year over year in the first quarter of 2026, the first decline after twelve straight quarters of growth. These are the modules with built-in neural processing that can run models at the edge without a cloud round trip.
The drop suggests that adding AI to a module costs more than many buyers want to pay right now. Enterprises that rushed to pilot smart sensors are pausing before scaling. When the economy tightens, the optional smart features are the first to be stripped from a bill of materials.
Memory shortage hits the premium tier
Counterpoint Research points to a concrete culprit: LPDDR4 memory supply constraints and rising memory costs are squeezing high-end cellular IoT modules. The advisory firm cut its 2026 module growth forecast to 4 percent year over year, down from 8 percent estimated in late 2025.
LPDDR4 is the low-power memory used in phones and connected devices. When phone makers ramp production, they soak up supply and leave less for IoT builders. The memory tax hits hardest on modules that pair a cellular radio with a capable chipset, exactly the category that was growing fastest.
Connections still climbing toward 5.4 billion
Despite the module wobble, the number of active cellular IoT connections keeps rising. IoT Analytics said connections grew 13 percent in 2025 and projects 5.4 billion connections in 2026, with a compound annual growth rate near 14.3 percent through the decade. More connections does not always mean more modules sold in a given quarter, because devices are lasting longer in the field.
That distinction matters for investors. A stable installed base with slow replacement can look like stagnation to a module vendor even as the network grows. The win now is in services and subscriptions layered on top of the hardware, not in the one-time chip sale.
IoT SIM control goes self-service
A related thread this month is SIM management. IoT Tech News highlighted new IoT SIM control tooling launched around July 15 that lets fleet operators switch carriers and manage profiles remotely. That flexibility matters when a global deployment crosses borders and needs to dodge roaming fees. Multi-carrier eSIMs let a device pick the best network without a physical swap, a feature that pairs with the module volume growth above.
Self-service control also cuts support tickets. An operator can reassign thousands of devices to a cheaper plan from a dashboard instead of mailing new cards. As module counts climb into the hundreds of millions, that kind of management plane becomes as important as the silicon inside the device.
5G and edge reshape the mix
The shift toward 5G modules is slow but steady. High-bandwidth use cases like video surveillance and autonomous guided vehicles need the throughput that older cellular standards cannot give. Edge computing pushes inference closer to the sensor, which is exactly where the AI-enabled modules above would fit if their cost comes down.
The blend of 5G, edge, and AI is the direction the whole category is pointing, even if 2026's numbers are dominated by cheaper 4G parts. Vendors are betting that once memory costs ease, the smart module returns to growth and pulls the rest of the market up with it.
Europe pushes next-generation IoT policy
Regulators are also shaping the field. The European Commission's next-generation Internet of Things program notes that more than 41 billion IoT devices were expected to be in use by 2025, a scale that raises questions about spectrum, security, and standards. Brussels wants common rules so devices from different makers can talk to each other and stay patchable.
The policy angle is not abstract. Critical infrastructure operators worry that a flood of cheap, unmaintained sensors creates openings for attackers. A recent journal volume on IoT security argued that rapid expansion of connected systems in power, water, and transport has raised real concerns about network reliability and protection.
Where the growth actually is
Berg Insight and others see the steady demand in industrial and vehicular deployments rather than flashy consumer gadgets. Logistics firms track trailers and containers to cut empty miles. Utilities deploy smart meters that report usage every few minutes. Farmers put soil sensors in fields to time irrigation.
These uses share a trait: they save money or meet a rule, so buyers keep buying even when budgets tighten. That is why module volumes stayed positive even as the AI-premium tier stumbled. The ordinary applications are carrying the market.
What to watch in the second half
The back half of 2026 will test whether memory costs ease and whether AI modules find a price that sticks. If LPDDR4 supply recovers, the premium tier could rebound. If not, vendors will keep shipping lean modules and pushing intelligence up to the cloud or to a gateway box.
Our AI coverage explains the models now running at the edge, and our Battery Tech coverage covers the cells that keep these devices alive for years. Connectivity is only half the equation; the other half is what runs on it and what powers it.
The original data comes from Berg Insight and IoT Analytics.