5G RedCap technology offers IoT device manufacturers an affordable migration path from LTE. However, the road to widespread adoption may face challenges, as highlighted by global technology intelligence firm ABI Research.
Designed as a natural replacement for LTE Cat-4 and Cat-6, 5G RedCap targets mid-range IoT devices that do not require the full capabilities of 5G. ABI Research forecasts that IoT RedCap module revenues will reach $1.2 billion from 2024 to 2029.
Despite the promising outlook, short-term adoption may be hindered by pricing issues.
According to Jonathan Budd, Industry Analyst at ABI Research, “While device OEMs are interested in 5G RedCap, IoT revenues may be limited in the short term due to high module pricing. In 2024, 5G RedCap modules are expected to sell at around $50, representing a significant premium compared to LTE Cat-4 modules.”
This pricing disparity poses a challenge for manufacturers.
“Most IoT OEMs may not upgrade immediately unless necessary, especially for devices with longer lifecycles,” explains Budd. “To make RedCap economically viable for manufacturers, 5G RedCap module prices need to decrease by at least 50% as a replacement for LTE.”
The introduction of eRedCap modules in 2026 adds another dimension to the landscape. These modules are projected to be only 25% more expensive than Cat-1 modules, priced between $10 and $15 per unit.
With more widespread 5G Standalone coverage expected by 2026, the migration to eRedCap is anticipated to gather momentum more quickly than 5G RedCap. ABI Research estimates cumulative eRedCap sales of $615 million from 2026 to 2029, particularly in security, telehealth, point-of-sale, and remote monitoring devices.
However, 5G RedCap remains competitive.
“The surge in 5G RedCap revenues is expected following the release of optimized second-generation chipsets in 2026. With increased manufacturing volumes, 5G RedCap module prices are projected to halve by 2027, driving further migration from LTE,” concludes Budd.
(Photo by Blocks Fletcher)
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