1 Global Embedded Modem Market Size (Value) and CAGR (2024-2033)
In 2024, the global Embedded Modem market was valued at USD 292.01 million, with a CAGR of 7.24% from 2024 to 2033.
An Embedded Modem, a critical component in modern communication infrastructure, offers quick network access for applications with limited data transmission requirements. These modems are equipped with a data pump, Data Access Arrangement (DAA), and modem code, and may optionally include a controller, Internet protocol stack, and SDRAM. The number of chips varies depending on the application’s specific needs, including any additional functions required. Beyond the functionalities of a standard modem, Embedded Modems are characterized by their small size, convenience, and flexibility, making them ideal for embedding in terminal equipment.
Figure Global Embedded Modem Market Size (M USD) and CAGR 2024-2033
2 Drivers of the Embedded Modem Market
The Embedded Modem market is propelled by several key drivers that are shaping its growth and expansion. One of the most significant drivers is the increasing demand from key regions, particularly Asia-Pacific. The rollout of 5G services in countries like China, South Korea, and Japan, along with the implementation of the Regional Comprehensive Economic Partnership (RCEP), have further catalyzed the growth of the Internet of Things (IoT) and communication sectors, thereby driving the demand for Embedded Modems.
Another pivotal driver is the growing demand from key applications and potential industries. The IoT sector is experiencing a surge in growth, with a wide array of smart electronic devices connecting to the internet, forming a global network that enables machine-to-machine and human-to-machine communications. Embedded Modems play a crucial role in providing connectivity, often through cellular networks or machine-to-machine connections, simplifying the design process for PCB designers and allowing them to focus on product specifics.
The automotive industry is also a significant contributor, with the development of intelligent connected vehicles. The trend towards electrification, networking, intelligence, and sharing in the automotive sector has led to the integration of modems in vehicles, turning them into ‘smartphones on wheels’ and opening up new possibilities for remote vehicle management and data access.
3 Challenges in the Embedded Modem Market
One of the most pressing issues is the fluctuation in raw material prices. The primary raw materials for Embedded Modem products, such as chips, electronic components, and PCBs, have been subject to supply chain disruptions.
Security challenges also pose a significant threat to the Embedded Modem market. As embedded systems become more prevalent in daily life, they are increasingly vulnerable to security threats. Ensuring the security of these systems is a complex task, particularly due to the limited hardware and software implementation options available to embedded designers. Many embedded devices, such as routers and modems, reuse the same cryptographic keys in their firmware, which is a major security concern. The availability of hacking tools for embedded systems on the internet has made these devices more susceptible to attacks, such as those on PDAs, mobile phones, and modems. This has made it imperative for manufacturers to prioritize security to prevent technological disasters.
Additionally, the market is becoming more competitive, which could potentially hinder growth. The downstream applications of Embedded Modems cover a broad range of industries, including communication, IoT, industrial, and automotive. The sustained and rapid growth of these industries is attracting more competitors, leading to increased market competition. This could adversely affect the product prices, gross profit margins, and market shares of existing companies in the industry.
4 Global Embedded Modem Market Size and Share by Type in 2024
Controller Based Modems are designed to operate independently of a host computer. They do not require a host operating system to function, which provides a higher level of redundancy. These modems are equipped with their own microcontroller and memory, as well as DSP memory, to run the supervisory code. This standalone approach ensures that the modem’s operation is not affected by the host computer’s status, making it ideal for applications where reliability and uptime are critical.
In 2024, the Controller Based Modem segment is projected to have a market value of 204.5 million USD. This type of modem is particularly useful in industrial settings where continuous operation is necessary, and the risk of host system failure could lead to significant downtime. The robustness and autonomy of Controller Based Modems make them a preferred choice for applications such as industrial automation, where they can manage critical communication tasks without relying on a host system.
Non-Controller Based Modems, also known as software-controlled or win-modems, are more cost-effective and space-efficient. They leverage the host computer’s resources, including memory and processing power, to run the supervisory code. This design reduces the need for additional hardware components, making them smaller and less power-consuming.
The market value for Non-Controller Based Modems in 2024 is forecasted to be 87.51 million USD. These modems are widely used in consumer electronics and other applications where cost and space are significant considerations. However, their performance can be affected by the host computer’s workload, and they are more dependent on the host’s operating system.
Table Global Embedded Modem Market Size and Share by Type in 2024
Type | Market Size (M USD) 2024 | Market Share 2024 |
Controller Based Modem | 204.50 | 70.03% |
Non-Controller Based Modem | 87.51 | 29.97% |
5 Global Embedded Modem Market Size and Share by Application in 2024
The automobile industry is a significant driver of the Embedded Modem market, with a forecasted market value of 70.61 million USD in 2024. Embedded modems in vehicles provide internet access directly from the car, enabling features such as remote vehicle start, locking/unlocking, remote car diagnosis, and vehicle tracking. These modems allow car owners to manage these functions through a smartphone app provided by the automaker. The development of intelligent connected vehicles is pushing the demand for embedded modems, as more automakers integrate modems into their vehicles to enhance the driving experience and provide advanced connectivity features.
The communication industry, which includes telecommunications equipment, services, and wireless communication, is another major application area. In 2024, this segment is expected to have a market value of 108.07 million USD. Embedded modems are used in various communication devices such as set-top boxes, electronic point-of-sale (EPOS) terminals, digital video recorders, digital televisions, and remote monitoring systems. They enable these devices to distribute information and connect to the internet, enhancing their functionality and user experience.
The Internet of Things (IoT) is a rapidly growing field that is transforming various industries. In 2024, the IoT segment of the Embedded Modem market is forecasted to be worth 48.63 million USD. Embedded modems for IoT applications are designed to provide connectivity to the internet, often through cellular networks or machine-to-machine connections. They are small in form factor and require minimal power to operate, making them ideal for IoT devices. These modems support standard AT commands, simplifying communications with IoT application host controllers and reducing the development burden on firmware developers.
The industrial sector is also a key application area for Embedded Modems, with a market value of 37.91 million USD in 2024. Embedded modems are used in industrial automation, production control, and intelligent instrumentation, improving production efficiency and the level of automation. They enable remote monitoring and control of industrial equipment, facilitating better management and optimization of industrial processes.
Table Global Embedded Modem Market Size and Share by Application in 2024
Application | Market Size (M USD) 2024 | Market Share 2024 |
Automobile Industry | 70.61 | 24.18% |
Communication Industry | 108.07 | 37.01% |
IoT | 48.63 | 16.65% |
Industrial | 37.91 | 12.98% |
Others | 26.79 | 9.17% |
6 Global Embedded Modem Market Size by Region in 2024
The Americas, including the United States, Canada, and Mexico, are a significant market for Embedded Modems, with a forecasted value of 92.60 million USD in 2024. The United States is the largest market in this region, driven by its advanced technology sector and high demand for connected devices. Canada and Mexico also contribute to the market, with growing adoption of IoT and industrial automation technologies. The region’s strong economic base and focus on innovation make it a key area for the deployment of Embedded Modems in various applications, from automotive to communication.
Europe is another major market, with a forecasted value of 69.44 million USD in 2024. Countries such as Germany, France, the UK, Italy, and Spain are leading the adoption of Embedded Modems. The region’s emphasis on industrial manufacturing and its push towards smart cities and digital transformation are driving the demand for reliable connectivity solutions. The automotive industry in Europe is also a significant contributor, with many European car manufacturers integrating advanced connectivity features into their vehicles.
The Asia-Pacific region is the largest market for Embedded Modems, with a forecasted value of 119.70 million USD in 2024. China, Japan, South Korea, India, and Southeast Asia are the key markets in this region. The rapid economic growth, coupled with the early adoption of 5G and IoT technologies, has positioned Asia-Pacific as a leader in the Embedded Modem market. The region’s manufacturing base and focus on innovation are driving the demand for Embedded Modems in various industries, including automotive, communication, and IoT.
Figure Global Embedded Modem Market Size by Region in 2024
7 Major Players in Global Embedded Modem Market
7.1 Digi International
Company Profile:
Digi International, established in 1985 and headquartered in the USA, is a leading global provider of IoT connectivity products, services, and solutions. With a strong focus on the industrial market, Digi International helps customers create next-generation connected products and deploy critical communications infrastructures in demanding environments. The company’s products are designed to connect computer networks with sensors on large-scale equipment and machines, an area broadly described as the “industrial internet of things.”
Business Overview:
Digi International’s main business involves providing comprehensive IoT solutions that include hardware, software, and services. The company’s extensive portfolio of technologies, paired with design, integration, and manufacturing expertise, results in unparalleled performance, simplicity, and user experience. Digi International has helped customers connect over 100 million things and is continuously expanding its reach.
Product Offered:
Digi International offers a range of products, including Digi XBee Cellular Modems, which provide pre-certified embedded cellular connectivity for rapid deployment. The Digi XBee 3 Cellular LTE-M/NB-IoT modem is particularly notable for its compact size, flexibility, and low power consumption, making it ideal for IoT devices and gateways.
Recent Financial Data:
In 2022, Digi International reported a value of 59.31 million USD, with a gross margin of 36.45%.
7.2 Thales Group
Company Profile:
Thales Group, founded in 1893 and headquartered in France, is a multinational company that designs and builds electrical systems and provides services for the aerospace, defense, transportation, and security markets. With over 81,000 employees across five continents, Thales is a global technology leader investing in digital and “deep tech” innovations such as Big Data, artificial intelligence, connectivity, cybersecurity, and quantum technology.
Business Overview:
Thales Group’s business is diverse, covering a wide range of sectors from aerospace to security. The company’s focus on innovation and technology has enabled it to maintain a leading position in its markets. Thales is particularly known for its advanced solutions in IoT connectivity, which are designed to provide reliable and secure communication for various applications.
Product Offered:
Thales offers the mPLS63-W Performance LTE Cat.1 IoT Modem Card, a plug-and-play solution that simplifies global cellular connectivity. This modem card provides instant access to LTE Cat.1 networks with 3G/2G fallback, making it suitable for applications such as vending machines, point of sale terminals, transportation solutions, and industrial automation.
Recent Financial Data:
In 2022, Thales Group reported a value of 33.73 million USD, with a gross margin of 37.84%.
7.3 Multi-Tech
Company Profile:
Multi-Tech, established in 1970 and headquartered in the USA, is a leading global supplier of Internet of Things (IoT) devices, services, and solutions. The company’s main sales regions are North America, Europe, and Asia, where it provides a wide range of products and services to meet the growing demand for connected devices.
Business Overview:
Multi-Tech’s business is centered around leveraging sensor and connectivity technology to bring systems and processes into the future. The company’s extensive portfolio of technologies, combined with its design, integration, and manufacturing expertise, results in unparalleled performance and user experience. Multi-Tech is dedicated to helping businesses accelerate their digital transformation with innovative IoT technologies.
Product Offered:
Multi-Tech offers a variety of products, including the mDot™ LoRa® module and the Dragonfly™ Nano cellular embedded modems. The mDot™ module provides significantly longer range and improved radio performance compared to traditional wireless solutions, making it an ideal embedded IoT solution. The Dragonfly™ Nano modems are the industry’s smallest form factor, end device approved devices that support a complete IoT operating system.
Recent Financial Data:
In 2022, Multi-Tech reported a value of 27.14 million USD, with a gross margin of 29.79%.