Cellular Modem Market By Product Type (USB Modems, Embedded Modems); By Application (Telecommunications, Automotive, IoT, Consumer Electronics); By End User (Telecom Providers, Automotive Industry, IoT Service Providers, Consumer Electronics Manufacturers); By Geography, Segment Revenue Estimation, Forecast, 2026–2032

Cellular Modem Market Report Description, 2026–2032

Embedded Connectivity Is Shifting Modem Demand from Accessory Purchases to Product-Level Integration

The Global Cellular Modem Market was valued at USD 4.80 billion in 2025 and is projected to reach USD 8.00 billion by 2032, expanding at a CAGR of 7.5% during 2026–2032, according to Strategic Market Research.

The forecast reflects a clear shift in how cellular connectivity is used: instead of being added as an external accessory, modems are increasingly built directly into vehicles, machines, and connected devices. A cellular modem is a hardware component that connects devices to mobile networks such as 4G and 5G using a SIM card, converting radio signals into digital data for internet access without fixed-line connections.

 

IoT Is the Fastest-Growing Application as RedCap Fills the Gap Between Low-Power LTE and Full 5G

Telecommunications was the largest application in 2025, accounting for 35% of revenue (USD 1.68 billion), driven by mobile broadband, enterprise routers, and fixed wireless access. IoT accounted for a smaller USD 1.44 billion (30% share) but is the fastest-growing segment with a 9.3% CAGR.

Growth in IoT is being supported by 5G RedCap (Release 17), which fills the gap between low-power LTE-M/NB-IoT and full 5G modems by reducing complexity, power use, and antenna requirements for mid-range devices.

Adoption is already underway. Ericsson reported 14 operators had commercially launched RedCap by mid-2026, with 42 operators across 27 countries investing in it. The global IoT base reached about 4.5 billion connections in 2025, with 2.6 billion in broadband and critical IoT use cases.

Key suppliers are moving quickly: Quectel has released commercial RedCap modules, while Vodafone, Ericsson, and Qualcomm have tested RedCap on live 5G networks for routers, payment terminals, and wearables.

This shift is accelerating embedded modem demand by enabling cost-effective upgrades for devices like industrial cameras, smart meters, gateways, and monitoring systems that would otherwise remain on LTE.

 

Industrial IoT and Remote Operations Drive Cellular Modem Demand

Growth in the cellular modem market is strongly driven by industrial IoT, where machines, sensors, meters, and control systems are connected to mobile networks without relying on fixed-line infrastructure. This enables remote monitoring and reduces the need for on-site operations across industries.

A key use case is manufacturing, where modems transmit real-time data such as temperature, vibration, energy use, and machine status. This helps factories detect faults early and manage equipment remotely, including older industrial systems that use interfaces like RS232, RS485, and Modbus.

Demand is also rising in remote and hard-to-wire locations such as oil and gas fields, power plants, pipelines, and utility networks. Cellular connectivity allows operators to centralize monitoring and reduce routine site visits. In transport and logistics, modems support vehicle tracking, fuel monitoring, and cargo visibility, while utilities use them for smart meters and grid infrastructure.

Across all sectors, buyers now prioritize reliability, security, and remote management over raw speed. Features like rugged design, dual-SIM failover, VPN support, and over-the-air updates are becoming standard requirements.

Pre-certified modems are also gaining traction because they reduce development time and simplify regulatory approval, making them attractive for industrial retrofits and faster product launches.

Looking ahead, growth will be supported by 5G, edge computing, and AI-enabled devices, which expand use cases such as video monitoring, predictive maintenance, and autonomous systems. However, adoption can be limited by network coverage gaps, cybersecurity risks, and certification complexity.

 

Telecommunications Leads Current Revenue, but IoT Service Providers Are Gaining Purchasing Influence

Telecom providers were the largest end-user group in 2025, generating USD 1.63 billion, or 34% of the market. They influence modem selection for fixed wireless access, enterprise routers, and connected devices because products must meet operator requirements such as network bands, certification, and device management standards.

IoT service providers generated USD 1.34 billion (28% share) and are the fastest-growing segment at 9.1% CAGR. Their growth is driven by enterprises preferring managed connectivity services instead of handling hardware, SIMs, and network integration themselves. A 2025 Verizon survey found that 87% of enterprises value operator integration support for IoT, while 43% cite cybersecurity as a key challenge.

Overall, competition is shifting from upfront modem cost to total deployment value. Devices that reduce certification effort, support remote management, and ensure long-term network compatibility are becoming more attractive than lower-cost alternatives.

 

Automotive Demand Is Supported by Long Product Lifecycles, Safety Functions and Continuous Data Services

Automotive applications generated USD 0.96 billion in 2025, representing 20% of market revenue, and are forecast to grow at 8.4% annually. The automotive industry accounted for a closely aligned USD 1.01 billion, or 21%, by end user and is expected to expand at 8.3%.

Vehicles increasingly rely on cellular modems for core functions such as emergency calling, telematics, diagnostics, software updates, navigation, infotainment, and subscription services. Because these systems must integrate with vehicle electronics, antennas, and security platforms, embedded modems are the preferred choice. Although automotive development cycles are long, successful designs can generate revenue across multiple vehicle model years.

Regulation is also a key driver. In the European Union, all new passenger and light-commercial vehicle models approved after March 31, 2018, must include 112-based eCall, which automatically sends crash data such as location and vehicle identification to emergency services.

As Europe moves from legacy networks to 4G and 5G, next-generation eCall systems are increasing demand for updated cellular modems. These systems automatically send crash data to emergency services and also enable services like remote diagnostics, insurance tracking, roadside assistance, and predictive maintenance.

Automotive suppliers must meet strict requirements for long product lifecycles (often 10+ years), strong security, and long-term software support. As a result, reliability and backward compatibility are key factors in winning automotive design contracts.

 

Consumer Electronics and USB Products Face Integration and Substitution Pressure

Consumer electronics accounted for USD 0.72 billion (15%) of application revenue in 2025, while consumer electronics manufacturers contributed USD 0.82 billion (17%) of end-user demand. Both segments show the slowest growth, with CAGRs of 5.7% and 5.8%.

Demand is mainly driven by connected devices such as laptops, tablets, wearables, and portable routers. Qualcomm’s Snapdragon X75 modem platform supports smartphones, PCs, vehicles, and IoT devices, showing how modem technology is increasingly shared across product categories.

However, growth is limited because many devices can rely on Wi-Fi or smartphone hotspot sharing instead of built-in cellular connectivity. As a result, cellular modems are mainly used only when mobility, security, or always-on connectivity is essential.

USB modems also face slower growth since they are being replaced by embedded solutions that offer easier setup, better reliability, and automatic connectivity. This shift supports stronger growth in embedded modems (8.7% CAGR) compared to USB modems (5.5%).

 

Regional Performance Will Be Shaped by Network Readiness and Certification Requirements

North East Asia is the largest regional market for cellular modems, driven by its strong IoT base and early 5G rollout. It accounts for about 70% of global cellular IoT connections in 2025 and roughly 38% of modem revenue. Growth is supported by large-scale manufacturing and high IoT adoption in China, Japan, and South Korea, with China’s 5G adoption expected to reach 88% by 2030, sustaining demand for advanced embedded modems.

North America holds around 27% market share in 2025 and is expected to grow at a 7.8% CAGR through 2032. Demand is led by industrial, enterprise, automotive, and fixed wireless applications, where certified and managed connectivity solutions are critical. Verizon’s enterprise focus on RedCap, eSIM, and network slicing highlights continued investment in next-generation modem technologies.

Europe accounts for about 22% of the market in 2025, growing at a 7.4% CAGR. Growth is driven by industrial IoT expansion, connected-vehicle regulations, and initiatives such as Vodafone’s RedCap trials and the EU eCall mandate, which continue to shape modem requirements and adoption.

Latin America and the Middle East and Africa together make up the remaining 13% share in 2025. Growth is slower, at 7.1% and 6.9% CAGR respectively, due to uneven 5G rollout. With Latin American 5G adoption projected at 53% by 2030 and the Middle East and North Africa still heavily reliant on 4G, demand remains focused on LTE and multimode modems, with gradual migration toward 5G.

 

Competition and Migration Dynamics Will Define Supplier Positioning

Competition includes modem chipset makers, module suppliers, industrial connectivity vendors, and connectivity platform providers. Qualcomm leads the chipset segment with Snapdragon modem-RF platforms such as the X75 and X70, which are used in smartphones, PCs, automotive systems, fixed wireless equipment, and industrial IoT devices to enable 5G and LTE connectivity.

Quectel is a major IoT module supplier offering LTE, 5G, RedCap, and low-power wide-area modules for applications such as smart metering, industrial automation, payment equipment, asset tracking, and vehicle telematics. Telit Cinterion provides cellular modules and connectivity services across LTE-M, NB-IoT, LTE, and 5G, targeting automotive and industrial customers with device-management and lifecycle-support capabilities.

u-blox focuses on cellular modules and global navigation satellite system positioning solutions used in asset tracking, industrial monitoring, fleet systems, and automotive equipment. Its combination of cellular connectivity and location technology supports equipment in which positioning, movement data, and remote communication must operate together.

Industrial specialists such as Digi, RAD, PUSR, and Ezurio compete through rugged devices, protocol support, pre-certification, remote management, security features, and simplified system integration. Their positioning shows that commercial value is increasingly tied to deployment reliability and lifecycle management rather than modem hardware alone.

The principal forecast constraint is migration complexity. Ericsson reported that 80 operators had completed 3G shutdowns and 46 had turned off 2G by the end of 2025. These closures stimulate replacement demand, but they also force customers to redesign products, recertify devices, replace deployed equipment, and manage mixed network conditions across countries.

LTE is therefore likely to coexist with RedCap and full 5G throughout the forecast period. Suppliers that provide multimode fallback, dual-SIM support, long-term software maintenance, remote configuration, and consistent hardware form factors are best positioned to convert network transition into sustained revenue rather than one-time replacement sales.

 

Source Summary

Customers and End Users

• Vodafone, Ericsson, and Qualcomm live-network RedCap test covering portable routers, payment devices, wearables, and lower-power equipment.

• Verizon Business enterprise IoT survey covering investment drivers, integration requirements, security concerns, RedCap intentions, and eSIM adoption.

• Verizon commercial USB modem offering used to confirm the continued availability of external plug-and-play modem products.

• Digi industrial application materials covering modem use in utilities, transportation, agriculture, smart cities, and remote monitoring.

 

Government, Regulatory and Standards Bodies

• 3GPP Release 17 and RedCap technical materials covering reduced-complexity 5G device specifications.

• 3GPP non-terrestrial-network documentation covering Release 17 support for satellite-connected cellular systems.

• GSMA SGP.32 and eSIM resources covering remote provisioning and IoT-oriented eSIM architecture.

• European Union eCall guidance covering mandatory installation, transmitted data, and system operation.

• PTCRB certification guidance covering cellular interoperability, performance testing, and operator-specific requirements.

 

Companies and Suppliers

• Qualcomm Snapdragon X75 announcement covering 5G-Advanced readiness and applications across vehicles, PCs, industrial IoT, and fixed wireless access.

• Quectel RedCap product announcements covering commercially available industrial 5G modules.

• Telit Cinterion, Digi International, and Nokia integration announcement covering field-replaceable RedCap modem deployment in routers.

• u-blox technical material covering LTE availability and the commercial effects of 2G and 3G network shutdowns.

• PUSR technical materials covering cellular modem operation, industrial protocol conversion, legacy-equipment connectivity, and manufacturing applications.

• RAD industrial connectivity materials covering rugged devices, cybersecurity, redundancy, and remote operational requirements.

• Ezurio technical guidance comparing pre-certified cellular modems with modules for IoT product development.

• AweSeed industrial modem materials covering connectivity requirements across geographically distributed operations.

 

Independent or Technical Sources

• Ericsson Mobility Report data covering cellular IoT connections, RedCap operator activity, regional concentration, and network sunsets.

• GSMA regional mobile-economy evidence covering China, Latin America, Europe, and the Middle East and North Africa.

 

Report Coverage Table

Report Attribute	Details
Forecast Period	2026 – 2032
Market Size Value in 2025	USD 4.8 Billion
Revenue Forecast in 2032	USD 8.0 Billion
Overall Growth Rate	CAGR of 7.5% (2026 – 2032)
Base Year for Estimation	2025
Historical Data	2019 – 2024
Unit	USD Million, CAGR (2026 – 2032)
Segmentation	By Product Type, By Application, By End User, By Geography
By Product Type	USB Modems, Embedded Modems
By Application	Telecommunications, Automotive, IoT, Consumer Electronics
By End User	Telecom Providers, Automotive Industry, IoT Service Providers, Consumer Electronics Manufacturers
By Region	North America, Europe, Asia-Pacific, Latin America, Middle East & Africa
Country Scope	U.S., Canada, UK, Germany, France, Italy, China, Japan, South Korea, India, Brazil, Mexico, Saudi Arabia, UAE, South Africa
Market Drivers	Rising deployment of connected IoT devices across industrial and consumer environments.Expansion of cellular connectivity in connected vehicles, telematics, and fleet-management platforms.Growing adoption of embedded modems in smart devices, industrial equipment, and remote-monitoring systems.Ongoing expansion of 4G LTE and 5G network coverage across developed and emerging markets.
Customization Option	Available upon request