The global mobile edge computing market was valued at USD 256 million in 2021. It is expected to reach USD 16,090 million by 2030, growing at a CAGR of 67.6% during the forecast period (2022–2030). A network architecture known as mobile edge computing offers IT and cloud computing capabilities at the edge of a cellular network. It provides an innovative choice for network operators struggling to satisfy customer requests for better coverage and more bandwidth. The primary benefits of moving relevant processing operations closer to the end user are a reduction in the amount of congestion experienced on the network and an improvement in the functionality of apps. An increase in data traffic and demand for low latency computing and improved Quality of Experience (QoE) drive the growth of the mobile edge computing market. In addition, the proliferation of smartphones in developing nations such as India and China due to the increase in demand for real-time access and social media growth and the rise in focus on delivering high bandwidth and low latency fuels the development of the mobile edge computing market.
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Widespread Adoption and Growth of Latency-Specific Applications
The global enterprise's propensity toward adopting AI influences the demand for data feed models, which possess low latency. With the advent of 5G, various enterprises across the globe are increasingly moving toward such solutions. In the industrial space, the increasing adoption of IoT is augmented by 5G operations, primarily driven by lower latency and network slicing features. A significant share of industrial IoT service providers and aggregators are offering 5G capable network offerings that are expected to adopt MEC over the coming years for handling the sheer amount of data in real time.
Carriers and original equipment manufacturers (OEMs) like cellular device manufacturers and in-building distributed antenna system (DAS) providers follow the 5G New Radio (5G NR) rules. This enables the adoption of more effective cloud solutions that rely on low latency, improving business efficiency and innovation through faster download speeds of broadband services. A survey conducted by the Business Performance Innovation (BPI) Network (May 2019), comprising 145 communications service providers (CSPs) globally, indicated that about 94% of the respondents expect growth in connected devices and mission critical IoT use cases that require low latency. Such increasing applications showcase a positive outlook for the market and are set further to leverage the adoption of MEC solutions during the forecast period.
Rising Application of 5G and Industrial IoT Services among End-user Industries
Industry 4.0 is creating new and exciting opportunities for deploying MEC platforms, which are present in the transition from legacy systems to smart components and machines, facilitating digital factories, and developing an ecosystem of connected plants and enterprises. IoT in industrial automation is expected to derive maximum benefit from 5G services. The functionality to support this segment is currently being defined in 3GPP, influenced by Industry 4.0 initiatives and industry bodies, such as 5G-ACIA. It will be a 5G-specific segment for local area use cases and private network deployments.
In the healthcare industry, IoT enables providers to monitor patient health through connected medical solutions remotely, along with real-time data collection and extended access to real-time monitoring and analysis. The healthcare sector is witnessing an increase in the deployment of 5G services. Energy and utility companies are driving the pack in actively improving business cases, services, and partnerships around 5G. According to Infosys, 56% of the energy and utility companies are defining use cases for 5G, and 20% have already established their 5G service portfolios along with the ecosystem partners.
Lack of a Common Security Framework
Due to the absence of a security framework, MEC is susceptible to the numerous dangers and pieces of hardware that lie in wait. This is the case with any network technology or architecture. A wide variety of threats and hazards could potentially occur in the MEC network. However, the most common attacks that hinder the market's growth can be narrowed down to compromised protocols, falsified information and logs, loss of policy enforcement, man-in-the-middle, and data loss.
Also, the MEC subscriptions that request handling UALCMP, CFSP, and entities are prone to attacks, such as DoS, DDoS, and relay forwarded at the edge level. Further, the OSS is subjected to spoofing and masquerading attacks that intend to acquire accessibility by pretending to be a legitimate entity. Moreover, the communication channels established in the access network formed between the user equipment and services are in an ad-hoc manner. The radio channels of these communications are established through an air interface. Attacks such as eavesdropping, Denial of Service (DoS), and Smurf are possible because of the open nature of the mobile network's links. These reasons are expected to slow the expansion of the market.
Expanding Need among Businesses to Deliver Quality of Experience
The amount of mobile data is exponentially increasing as the number of connected devices rises, increasing demand for telecom and network services. MNOs are under constant pressure to supply consumers with services of high quality because the demand for mobile data, mainly mobile video services, is growing rapidly. An operator can supply new services at the edge of mobile networks gratitude to the MEC network design. To create new kinds of context-aware and value-added services, operators use cutting-edge technologies like Network Functions Virtualization (NFV), virtualized RAN (vRAN), and SDN. Innovative applications are being created by application providers, MNOs, and infrastructure providers to take advantage of RAN capabilities. To enhance user experience and give operators the flexibility to better manage latency-sensitive services, MEC enables the deployment of services within the RAN. The proximity of the MEC components at the edge further contributes to improved experience quality. MNOs are heavily utilizing MEC technology to give Quality of Service (QoS) and Quality of Experience (QoE) to subscribers.
The global mobile edge computing market is segmented by component and end user
By component, the global mobile edge computing market is segmented into hardware, software and services.
The hardware segment accounts for the largest market share and is expected to grow at a CAGR of 40.7% during the forecast period. The mobile edge computing infrastructure being recognized as a niche latency-sensitive application in the AR domain is expected to gain traction and generate market demand for hardware solutions. These infrastructure resources empower the AR system by maximizing throughput by leveraging the intelligence to the edge hardware rather than relying on the core network and thereby offloading computation-intensive tasks.
Software and services are the fastest growing segment in the global mobile edge computing market. Multiple IoT devices are available inside a MEC-based ecosystem, which decreases the need for specialized software that operates and performs in accordance with the MEC design. The demand for software that can provide distributed processing, multi-level load balancing, and content synchronization is accelerating the expansion of the software market. Additionally, solution providers like Verizon have started to provide software development kits to their clients, allowing internal teams to design programs tailored to the company's needs and objectives. In addition, these businesses provide pre-designed software compatible with an existing MEC architecture and ensure appropriate processing power, all of which contribute to the expansion of the market.
By end user, the global mobile edge computing market is segmented into media and entertainment, automotive, manufacturing, government, and other end-users.
The media and entertainment segment accounts for the largest market share and is expected to grow at a CAGR of 69.3% during the forecast period. Cloud gaming is an emerging technology across the industry that allows users to stream high-end games across hand-held devices, such as laptops, tablets, and mobiles, with fast network connectivity, eliminating the need for a dedicated gaming console/PC. The platform is still weak in terms of internet speed, making it impossible to play games with particularly ultra-low latency. On the other hand, mobile edge computing relies upon several small data hubs deployed in closer physical proximity instead of one sizeable faraway server to solve the issue. Gamers can save device processing power for a speedier gaming experience because the device won't have to transfer data to a central server, process it, and return the information. These kinds of variables are driving the expansion of the segment.
By region, the global mobile edge computing market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World.
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Asia-Pacific is the largest shareholder in the global mobile edge computing market and is expected to grow at a CAGR of 65% during the forecast period. In recent years, the Asia-Pacific region has transitioned from MEC (Mobile Edge Computing) environments that are small-scale and lab test environments to early deployments of the technology. This is especially true when providers relocate time-sensitive and secure applications from the cloud to the edge to improve response times. With its 5G commercial launch under its belt, China Mobile has set out its 5G enterprise strategy, placing cloud services at the center. China Mobile would build cloud infrastructure across the country, including "a large number" of edge computing nodes. China's 5G rollout is fueling growth in emerging high-tech industries, including mobile edge computing, which processes data closer to devices in real-time than a cloud processor thousands of kilometers away.
North America is expected to grow at a CAGR of 74.8%, generating USD 5,490 million during the forecast period. North America is home to the three major cloud service providers, Microsoft's Azure, Web Services, and Google Cloud. This region is also considered the hub for all major technological innovations, such as 5G, autonomous driving, IoT, blockchain, gaming, and artificial intelligence. This part of the world is known for being one of the first to adopt newly developed technologies. Currently, many emerging technologies are heavily reliant on data. Data centers and the cloud are nearing capacity due to vast data creation, processing, and transmission. These infrastructures would not be able to meet the expectations of their clients, given the current volume of newly generated and used data. The most important of all the relevant factors for the firm will be latency. Low latency could stop an organization's whole functioning because most businesses depend on real-time data access and processing. Edge computing has assisted infrastructure developers in addressing this issue. With the maturation of new technologies, edge computing is anticipated to have a substantial impact.
Several European countries, including the United Kingdom, are currently putting 5G technology through its paces in the testing phase. For instance, Vodafone's trial 5G at the MediaCity UK tech hub is rolling out tests in other areas, such as Glasgow, Birmingham, Liverpool, Bristol, Cardiff, London, and Manchester. Other prominent vendors, like Telia and EE, are also actively testing the technology in the United Kingdom, making them potential market buyers. The UK has faced its next wave of digital transformation due to the adoption and deployment of advanced and innovative digital technologies, such as the internet of things (IoT), cloud computing, artificial intelligence (AI), and 5G, and increased development. Adopting new technologies like augmented reality and the internet of things relies on the availability of 5G networks. France has recognized the importance of 5G and initiated several initiatives to develop the technology. By 2020, the European Union (EU) expects to have invested USD 3 billion in this sector. It also plans to direct a significant amount of investment towards mobile edge computing, as edge computing will be the enabler for the true potential of 5G.
The global mobile edge computing market’s major key players are SK Telecom Co. Ltd, Nokia Corporation, Telefonaktiebolaget LM Ericsson, Saguna Networks Ltd, AT&T Inc., Huawei Technologies Co. Ltd, ADLINK Technology Inc., SMART Embedded Computing (Artesyn Embedded Technologies), ZephyrTel Inc. (ESW Capital Group Company), and Quortus Limited.