The downstream applications of the Industrial Internet are extensive and lte m2complex in granularity. Industrial Internet forms a comprehensive interconnection of people, machines and things by building networks, platforms and security systems. Industrial Internet is the most complex application scenario among wireless communication modules, with many links and complex processes. In the field of industrial Internet, the module has a wide range of applications and can now be used commercially in vertical industries such as smart factory, remote driving, smart port and smart power. The terminals cover all kinds of industrial routers, industrial flat panel terminals, AGVs, drones, power DTUs, etc.

The industrial Internet market is huge. Thanks to the promotion of policy, capital and technology, the industrial Internet is in the primary development stage but has a broad prospect. By 2020, the value added of China's industrial Internet core industry will reach 652 billion yuan, and the average annual compound value added rate of the core industry scale will remain at about 20% in the next five years. According to Abbey research, by 2023, the global industrial Internet cellular module market will reach 270 million, while the industrial Internet and cellular module market will reach 80 million.

Competition pattern:East rises and west falls, concentration increases.

The replacement of overseas is the general trend

Foreign manufacturers have an early start in development, and domestic manufacturers can accelerate to catch up. Overseas companies mainly through the wireless network communication module manufacturers to provide including Telit, Sierra Wireless, U-Blox; domestic economic market competition manufacturers to carry out including major carriers and so on.

In recent years, domestic manufacturers module business revenue growth rate is significantly higher than overseas manufacturers, there is a clear trend to accelerate the catch-up. According to Counterpoint, overseas module manufacturers still dominate the market in 2017H, with four manufacturers - Telit, Sierra Wireless, Gemalto and U-Blox - accounting for 77% of total shipments. In Q3 2021, the top five manufacturers in the global cellular IoT module market were all from China, with Telit, Guangzhou and Tong having 31.6% and 9.6% market share, respectively.

With the cost advantage and engineer bonus, as well as the support of the huge domestic market, domestic replacement is an inevitable trend, bullish domestic, module manufacturers to increase their global market share. iot modules are highly standardized, the technology of the product depends mainly on the chip used, the technical barriers are relatively low. In addition, the Iot industry space is huge, the number of participating manufacturers is increasing, and competition is becoming more intense, especially in the process of rapid growth in product volume, often take a price cut to grab market share. Due to high overseas labor costs, R&D and operation costs, overseas manufacturers cannot compete with domestic manufacturers. Statistics on the gross and net profit margins of listed companies from 2016-2020 reveal that the gross profit margins of overseas listed companies are generally higher than those of domestic listed companies. However, they cannot afford the high costs. In recent years, both telit and serria wireless have incurred losses. We believe that with the eastward shift of the 5G industry chain, foreign manufacturers may gradually withdraw from the communication module market in the future, while domestic manufacturers are expected to benefit from the global expansion.

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By:Alexis