Wi-Fi IoT integration drives a vibrant Chinese Wi-Fi ecosystem.
Global technology intelligence market firm ABI Research forecasts that the Chinese Wi-Fi IoT market will continue to grow at a CAGR of 29% from 252 million connections in 2021 to 916.6 million in 2026.
The COVID-19 pandemic had highlighted the prospects of remote working to the world, and the importance of having a reliable office and home network. IoT is relied heavily by enterprises, such as the manufacturing segment, for various applications like remote monitoring and management of work processes, predictive maintenance, and asset tracking. Wi-Fi serves as an enabler in connecting these IoT devices and sensors, supporting both broadband and narrowband IoT applications. Remote working has also driven consumer demand for cohesive home environments, which stimulates the growth of smart home applications, enabled by IoT devices connected over Wi-Fi connectivity.
The increasing demand for Wi-Fi-enabled applications and the advent of new standards such as Wi-Fi 6, Wi-Fi 6E, and Wi-Fi 7 has created the need for new software and hardware components such as Wi-Fi chipsets and devices that can support the latest standards.
“To meet the surging Wi-Fi demand, the Chinese market been ramping up manufacturing capabilities through support plans provided by the government and the emergence of new vendors to ease the strain felt from the global chip shortage,” says Andrew Zignani, Research Director at ABI Research.
China’s continued rapidly growing economy and aspiring demographics is making a key contribution to global demand and consumption of Wi-Fi-enabled services such as smart home applications.
To meet the growing demand for Wi-Fi components and devices, the Chinese government has launched several initiatives, including “Made in China (MIC) 2025”, which provides financial subsidies, loans, and technical guidance to local manufacturing vendors.
“New and existing vendors are also venturing into the Wi-Fi supply chain. One example is TP-Link, a Chinese manufacturer of networking products like routers and modems. TP-Link recently revealed to have established a team for the research and development of Wi-Fi 6 chipsets, specifically targeting the smart home vertical,” Zignani explains.
In support of the Wi-Fi IoT market, Chinese software company, Tuya Inc, has also developed and released its first Wi-Fi 6 module for IoT end devices, the AXBU module.
ABI Research forecasts that the global Wi-Fi IoT market would grow from approximately 2.3 billion connections in 2021 to 6.7 billion connections by 2026. This could be compared against the Chinese forecasts mentioned above, where the Chinese Wi-Fi IoT market is expected to reach 916.6 million in 2026. With a population strength of around 1.4 billion, China alone makes up approximately 40% of the global Wi-Fi IoT market. This indicates the strong prospects for the Chinese Wi-Fi ecosystem, where Wi-Fi-enabled applications and services would be driven by the proliferation of IoT.
“The Wi-Fi connectivity ecosystem in China is seeing a number of applications being developed across multiple verticals, such as in the manufacturing, education, transport, and healthcare sector. Wi-Fi can complement 5G and 4G by supporting shorter-range connectivity for indoor settings. Growth and momentum in the Chinese Wi-Fi connectivity ecosystem is expected to accelerate over the next 5 to 10 years.”