90% of industry’s net adds now coming from connected cars, IoT: Chetan Sharma

The internet of things, driven by connected cars, is clearly now the U.S. wireless industry’s growth center, according to new research from Chetan Sharma Consulting, which reported that fully 90% of the sector’s net customer additions in the first quarter of this year came from connected cars and IoT devices.

“This means that while there is a healthy smartphone sales pipeline, it is for the existing subs and as such net adds for the phone business is tapering off and we can expect that new net adds will continue to be dominated by the connected devices segment,” the firm wrote in a new report on the wireless industry in the first quarter.

The firm also added some context about the growth of the IoT and connected cars sector: “In 2014, 61% of the accounts added were phones. Cars accounted for 12% and the IoT 18%. Tablets are at 9%,” the firm wrote, noting that, in 2015 and 2016 the phone category declined while connected cars and the IoT grew significantly. “In 2017, non-phone category again dominated with connected vehicles leading the field for the first time in history. While the ARPUs from such net adds is quite low compared to postpaid net adds, it does reflect the changing dynamics in the industry.”

Added Chetan Sharma: “There was a sharp decline of tablet net adds, biggest in the history and it doesn’t bode well for the category. It means that consumers are starting to wean off the cellular connection for the tablets because Wi-Fi is good enough where they can just tether when they need a connection.”

Regardless, the new figures from Chetan Sharma for the U.S. wireless industry in the first quarter reflect the fact that most customers already own a smartphone, and carriers are increasingly hoping to insert their cellular connections into other kinds of devices.

That’s not a surprise considering AT&T and Verizon have both embarked on major IoT efforts centered around their new low-power, wide-area network technologies including LTE M. T-Mobile and Sprint too are chasing the sector with their respective IoT networks and services.