Despite high ambitions for the smart manufacturing sector, mobile operators are currently secondary players in that market – and 5G isn’t guaranteed to give them a leg up, according to ABI Research.
Consequently, says ABI, the short-term opportunity in manufacturing is forecasted to be only $2.6 billion by 2022 in a new report.
Essentially, says ABI senior analyst Pablo Tomasi, the problem is that the manufacturing market has grown without mobiles so far, and will continue to do so unless operators can think and act beyond their traditional boundaries to develop new market strategies that will help them crack what is a well-entrenched sector.
“MSPs [mobile service providers] have a chance to enter the smart manufacturing market building from the ground up, gaining trust as partners, and proving that the value of their offering is beyond what is currently delivered in the market,” Tomasi said, but added that while 5G is a promising technology to help them do that, “alone [it] is not enough, and with doubts on what business model will support it, 5G’s ability to integrate with legacy technologies, and the actual results delivered in harsh factory environments, there is much uncertainty about whether 5G will be a game-changer for MSPs in manufacturing.”
Operators must understand their competitive position in the market, be patient, prepare for a long journey, and align their ambitions with what the sector wants, he said. Partnering with market leaders will be essential – the recently announced partnership between Orange and Siemens is an example of what should be a growing trend.
But 5G will not be in the factory for a few years, and to be successful, a wider alignment between industrial vendors and mobile operators is essential. Even the private LTE solutions currently available are only at a very early stage in manufacturing and still the lack the success stories needed to prove their value in the market.
“The manufacturing market looks for enhancements, not disruption, and for solutions, not technologies,” Tomasi said. “MSPs should tailor their offerings, including 5G, to these enhancements and solutions.”