The oft-heralded and repeatedly delayed insurgence of IoT will have to wait as a global pandemic crushes many of the industries that could benefit from increased connectivity, ABI Research analysts said this week. The rapid reversal is significant because the convergence of 5G, networks especially suited for IoT, and device proliferation was expected to bolster the technology before the pandemic hit.

The ripple effect of tightened spending across almost every industry and market will impact IoT for much of the year, and that’s assuming the pandemic eases this summer. There are some bright spots, however, particularly for enterprises with the resources to invest, the analyst firm said during a webinar on the pandemic’s impact on IoT.

“The remote capabilities that IoT has to offer is significant in terms of its value, especially in times like these,” said Michela Menting, research director at ABI Research. There will be an increased demand for security in remote management and monitoring for proper lifecycle management, IoT device onboarding, and zero-touch provisioning, she explained. 

“COVID-19 has of course had an impact, and in the short term primarily related to manufacturing delays both in the semiconductor industry and the industries those devices serve,” Menting said. “Markets such as automotive, industrial IoT, as well as 5G equipment for example, they’ll continue to suffer a little bit longer during the predicted recession even when manufacturing is 100%.”

The eSIM market, for example, which is heavily dominated by the automotive industry, will likely suffer the greatest short-term impacts, said Phil Seely, research director at the firm. Car manufacturing has declined considerably since the pandemic began and although every vehicle coming off the assembly line isn’t equipped with eSIM it will still precipitate a marked decline, he said.

“We do expect a reduction of approximately 15%-20% within the automotive segment year on year” and that will translate to an overall eSIM market reduction of 10%-15%, Seely predicted. Other impacted markets include asset tracking and smart meters, according to the firm.

Enterprises are shifting strategic priorities to focus on efforts that can deliver revenue or notable benefits in the next six to 12 months, Seely added. “This is undoubtedly going to lead to some delay as it relates to planned eSIM integration rollouts, as ultimately new product developments and launches are pushed back somewhat.” 

The eSIM market will eventually pick back up because enterprises are “still keen to use connectivity to future proof their businesses and they’re looking towards cellular” to achieve those goals, he said. 

ABI Research remains confident in the long-term opportunities for “end-to-end chip-to-cloud security and the combination of cellular enablement paired with a secure chipset alongside a platform, which will form the basis from which security at the design phase will and can be implemented,” Seely said.

“Despite COVID-19, it is important to note that enterprise ambitions remain largely unchained. They are still looking to leverage cellular connectivity to help with global expansion strategies,” he said. 

“COVID-19 has forced most enterprises into what I would call a mitigation mode. This has resulted in a temporary shift in focus, a temporary shift in terms of development roadmaps and budgets, but this will be a shorter term impact and eSIM will be a key technology to ultimately help enterprises realize their strategic ambitions.”

Once the pandemic is over, IoT will also play an important role in transforming the supply chain, explained Adarsh Krishnan, principal analyst at ABI Research. “As the supply chain evolves, the demand for IoT and [artificial intelligence] to enable asset visibility across the supply chain becomes even more important,” he said.

Prior to the pandemic, the ongoing trade war between the United States and China was already forcing companies to reassess their supply chain and suppliers in impacted regions. ABI Research now expects that process of diversification to accelerate even further to limit business risk and the impact of future disruptions to the supply chain.

“IoT technologies could help build the trust and reliability for new partners and suppliers. It’s going to be an important aspect,” Krishnan said. “The integration of asset visibility data across the value chain among multiple stakeholders will become key to reduce supply chain [challenges].”

Economic markers, including the trade of physical goods, cargo shipments, and dramatic job losses portend a rough period ahead for IoT, but ABI Research remains confident that the technology will rebound and accelerate once the crisis ends.