Chinaâ€™s smart meter growth could spell future IoT problems
October 26, 2016
China's overbearing share of smart meter connections portends future issues for its IoT competiveness, according to ABI Research. The country’s smart meter connections are looking to dwarf all other China IoT markets at 63 per cent connection share.
Smart metering is China's largest IoT application segment thanks to its massive investments in its utility infrastructure. The survey found that more than 45 per cent of China's IoT connections today stem from smart meters.
When measured by cellular and fixed line connections, more than 63 per cent are smart meters, with that percentage expected to climb over the next five years. The net result may mean lopsided investments in IoT that eventually undercut China's competitiveness in the global market.
China's meter module, and gateway vendors – including Holley Metering, Kaifa Technology and Wasion Group for electricity, gas and water meters, as well as Neoway, SIMCom and ZTE for cellular modules – will benefit from local utilities sourcing from local Chinese OEMs.
ABI also expects proprietary LPWA technologies to play a role, with LoRa to be the likely winner; though, this is highly dependent on how other vendors position themselves to appeal to Chinese markets. But there is a downside to such market dominance, which is the region's lack of investment in two critical IoT services markets.
"Concentrated IoT investment may mean other application segments do not get the attention deserved, particularly in advanced analytics and professional services," said Dan Shey, managing director at ABI Research. "If China's goal is to modernise industries, IoT is a strategic technology sector, but it dictates investments in the specific IoT application markets serving those industries."
Advanced analytics and professional services both require a vibrant, competitive market. Investment in advanced analytics needs to be broad-based, because each connected machine and object is unique in the data that define its attributes and operation. Professional services, meanwhile, command a broad range of applications, development, systems integration, hardware design services and strategic consulting services.
A healthy supply of system integrators and value-added resellers providing professional services is critical for filling in the IoT gaps. In both service segments, if the IoT opportunity is far smaller in the non-smart meter segments, lack of competition will limit innovation and quality.
"The bright side could be more opportunities for non-Chinese firms to fill in for lack of local suppliers and skill sets," said Shey. "The growing population in China's urban centres means opportunities for smart city services integration beyond metering markets, particularly in autonomous driving. China's aging population also portends growth in smart home, patient monitoring and aging-in-place services. But all of these opportunities are at the mercy of China's fragmented regulatory environment, which already hinders market access to foreign fleet telematics and smart meter vendors."
• Wasion Group, a Chinese smart metering, smart power distribution and energy management company, has deployed Rethink Robotics' Sawyer on its assembly line for manufacturing single-phase energy meters. Wasion is moving forward with smart manufacturing initiatives by leveraging smart, collaborative Sawyer robots that are easy to deploy and can meet the precision specifications for the companies' factories.
Wasion produces 35 million units of various smart metering, power and energy management equipment annually. With a diversified product portfolio, its production lines need to accommodate a variety of products in lower volumes. The company has been vigorously looking for highly flexible automation to optimise production in a highly customised environment, enabling the company to meet changing market demands and expedite delivery.
"We see smart manufacturing as a significant driver of our company's growth," said Liao Qianzhong, general manager of Wasion Group’s production centre. “We are just beginning to introduce this level of automation into our manufacturing processes, and we are pioneering the practice in China. Deploying Rethink Robotics' smart, collaborative robots will enable us to speed up our production and migrate to smart manufacturing. We have already seen positive results from our initial deployment of Sawyer, and we also see tremendous potential for wider use in our operations."