The freezing of the NB-IoT core standard has enabled a large number of enterprises to quickly participate in the construction of the industrial chain. After nearly two years of promotion, the LoRa Alliance has also formed a relatively complete industrial ecosystem. It can be said that the current low-power wide-area network industry prototype Already formed, we can conduct a preliminary analysis through the industrial economic method. “Structure-behavior-performance†is the classic analytical framework of industrial economics. Of course, the simple three words are only highly concise for industrial analysis, and there are too many influencing factors behind it. The author intends to conduct a preliminary analysis of the low-power wide-area network industry through a series of articles, with the structure-behavior-performance analysis framework. This paper first sorts out the market structure of low-power wide-area networks and analyzes corporate behavior and market performance. .
Classic industrial economic analysis framework
Friends who have been exposed to economics must be impressed with the “structure-behavior-performance†of the classic analysis framework of the industrial economy. This analysis model was created by Harvard economists Bain, Scherer and others to observe the benign development of an industry. the process of.
Due to changes in the external environment, the structure of a particular industry has changed. This market structure determines the behavior of the company in the market, and the corporate behavior determines the economic performance of the market in all aspects. Specifically, it includes:
Market structure - changes in external environmental factors have a potential impact on the industry in which the company is located, including changes in the industry's competitive landscape, changes in product demand, changes in market segments, changes in marketing models, etc.
Corporate behavior - refers to changes in the company's external impact and market structure, and possible countermeasures, including the integration of relevant business units, expansion and contraction of business, transformation of operational methods, and management changes. change;
Market Performance - The change in business profit, product cost, market share, etc. in the event of changes in the external environment.
Although the “structure-behavior-performance†analysis model was formed in the 1940s, it is still a good analytical framework for the modern industry.
Crisscrossed low-power wide-area network market structure
Compared with traditional industries, the industrial ecology of the Internet of Things is relatively large, and it needs to be analyzed from two dimensions: vertical industrial chain and horizontal technical standards. For the low-power wide-area network, from the vertical perspective, the complete industrial chain from the "bottom chip-module-terminal-communication equipment-operator-platform-application" has been formed; from the horizontal perspective, every link of the industrial chain There are vendors with different technical standards such as NB-IoT, LoRa, Sigfox, ZETA, and Ingenu. Therefore, this industry is criss-crossed, and the study of market structure is more complicated. We need to distinguish the vertical and different industrial chain links and the horizontal and different technical standards to form a competitive pattern, and thus conduct a comprehensive analysis of the market structure.
One of the most typical indicators of industrial structure is market concentration. The so-called market concentration is the ratio of the top vendors in a certain market to the overall market share of the industry. Generally, the top 4-8 manufacturers are selected. This index reflects to a large extent whether the link forms a highly monopolistic pattern. For example, the current four companies account for more than 90% of the total market share, and the field is divided by a few, and the oligopoly situation is obvious.
We select two technical standards, NB-IoT and LoRa, which have formed a relatively complete industrial ecology, and make a general estimate of the market concentration of each link. The size of the concentration is reflected in the length of the corresponding rectangular frame in the following figure. The longer the length, The higher the concentration, the shorter the length and the smaller the concentration.
We can conduct specific analysis from different levels of the industry chain:
In the field of underlying chips, it is well known that Huawei Haisi, Qualcomm, Intel, MTK, ZTE Microelectronics, Datang, Spreadtrum and other manufacturers have already developed R&D plans and implementation steps for NB-IoT chips. Participation, can not form the first 2-3 monopoly market, but because there are not many manufacturers in this field, it will not form a large number of market participants, the market concentration will remain below 50%; and in LoRa In the camp, the current RF chip supply is concentrated in a Semtech manufacturer, occupying the majority of the market share, resulting in a market concentration of more than 80%.
In the module segment, due to the advantages of channel, technology and scale, the shipment volume of many NB-IoT modules should be in the hands of the original 2G/3G/LTE module product line. This group is relatively large. Coupled with some new manufacturers entering the field, it is unable to form a high degree of market concentration; in the LoRa module group, the original manufacturers are mostly small and medium-sized enterprises, in the case of more and more LoRa applications, Many manufacturers entered the market, making the entire market relatively competitive and the market concentration is low.
In the terminal link, since the low-power wide-area network communication technology is required by a large number of industries and consumer terminals, and the types of terminals are various, and it is impossible to form a market in which a small number of enterprises have large-scale terminals, the terminal market is extremely dispersed and the market is concentrated. The degree is low.
In the communication equipment and platform, Huawei, Ericsson, ZTE, Nokia and other communication equipment manufacturers are the core participants and promoters of the NB-IoT standard. In the cellular communication market, these mainstream equipment manufacturers occupy the majority of the market. In the commercial use of NB-IoT, it is inevitably occupying the vast majority of shares. It can be said that the market concentration in this link is relatively high, possibly reaching more than 80%. For LoRa, there are a large number of SMEs involved at the beginning. The development and production of LoRa base station equipment and management platform, there are many manufacturers with the overall solution capability, so it can not form high market concentration, and the sharing mode launched by China LoRa Application Alliance (CLAA) initiated by ZTE in China is To a certain extent, the concentration of equipment and platforms will be increased, but the high concentration of NB-IoT in this aspect will still not be achieved.
In the carrier sector, mainstream operators are very clear that they will deploy and operate the NB-IoT network. That is to say, the future NB-IoT network operation will still be concentrated in the hands of the three major operators, so the market concentration in this field is 100%; for LoRa network operations, due to the diversified needs of various government and enterprise users, there may be many forms of operators in the future, including CLAA's cross-regional cloud network operators and industry-level network operations. Commercial and enterprise private network operators, etc., so the market concentration is very low.
As for the application, whether it is NB-IoT or LoRa network, it has to face thousands of diverse application needs. The application of these Internet of Things cannot form hundreds of millions of homogenous application services in the traditional communication era, but the fragmentation features are prominent. There are also many different needs in the same industry, so the application link will not form a high market concentration situation.
In summary, it is very obvious that many links in the industrial chain of NB-IoT have a high degree of market concentration. It can be seen that this field is more dominated by giants; the chip link in LoRa industry chain forms a high degree of market concentration, and other links Both are the form of a large number of participants. Of course, the formation of these market structures is also formed by multiple factors such as the external environment, barriers to entry, and product differentiation. Under the existing market structure, the enterprises participating in it will conduct competition and cooperation in different ways. The article analyzes corporate behavior and market performance.
The "market structure - corporate behavior - market performance" analysis framework has been used as a classic model for industrial economic research. The author conducts a preliminary study on the market structure of the low-power wide-area network (LPWAN) industry from the two dimensions of industry chain and technical standards. It is found that the vertical and horizontal angles of this industry form a complex market structure, and the prospects in the domestic market are optimistic. The market structure of IoT and LoRa is quite different. The various market structures have a great impact on the competition, cooperation, price, products and other behaviors of the enterprises involved in them, and these behaviors lead to the final performance of the entire industry.
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