In 2011, Cisco famously stated in a white paper what later became IoT gospel, circulated endlessly and uncritically: The world will have 50 billion connected devices by 2020.
Fast forward to March 2019. We all cringe — realizing how wildly optimistic the industry was and how gullible we were.
Since 2011, market predictions for connected devices have been repeatedly adjusted. The 2020 outlook now ranges from 20 to 30 billion connected devices, about half of Cisco’s rosy forecast.
Don’t get me wrong. I’m hardly suggesting that market growth for IoT devices has stalled. Au contraire, it is growing steadily. But a few unresolved issues prevent this segment from racking up its next “trillions.” Oft-cited alibis for the slow growth of IoT are security — or lack of thereof — and fragmentation among IoT products.
IoT products built on diverging connectivity technologies, communication protocols and system-level applications remain problematic. The insecurity of devices is a lingering concern.
Viability of Cellular IoT
Connectivity choices for IoT products include: broadly available short-range solutions such as Wi-Fi and Bluetooth Low Energy; mesh technologies including ZigBee, ZWave; and Low-Power Wide-Area Network (LPWAN) that allows communication over large distances using minimal power. These LPWAN technologies are divided into licensed (LTE-M, NB-IoT and EC-GSM) and unlicensed (SigFox, LoRa and others).
Of all, those who promote cellular IoT (LTE-M, NB-IoT, etc.) are banking on their long-term viability. They claim that cellular connectivity specifications “can cut the fragmentation of IoT” and might even settle the security issues. They say IoT applications such as smart metering, automotive, home automation, agriculture, and asset tracking will benefit from using cellular infrastructure in licensed spectrum, across bandwidth and power operating points.
But here's the thing. Cellular IoT, too, comes with its own challenges, including the complexity of billing and provisioning for cellular network operators. Every chip company selling modem ICs into cellular IoT devices must worry how their customers — device manufacturers — expect to make money on IoT.
Chip designers mired in building reliable cellular IoT modems might not have had time to ponder this business-model conundrum. But they should all ask this question: Who is going to pay how much to do what so that who can make how much money?
Assume manufacturers of automobiles, refrigerators, containers and maybe thermostats all want their products connected to the Internet — so they can send new features or fix bugs over the air. Maybe they want to track their assets, or plan to develop new business by monitoring the health of connected devices on the field.
The mystery we have yet to solve is who’s willing to pay the cellular IoT connectivity fees that underwrite these blessings.
One thing is clear. A consumer with a brand-new fridge gives little thought — even nowadays — to the joy of connecting his or her icebox to the Web. This is why the appliance company is the likely party footing the connectivity bill.
Here’s the rub. Most appliance manufacturers have never been mobile phone suppliers. They don’t talk the lingo of the mobile world. Could they negotiate a reasonable data plan for their refrigerators with mobile network operators? Conversely, are mobile network operators — who don’t know Frigidaire from an ice-fishing hut — prepared to offer fridge-makers a deal they can’t refuse, in hopes of joining (cold) hands in the humanitarian cause of IoT device proliferation?
Another lingering question: Are mobile network operators planning to waive roaming charges for appliances makers? After all, fridge makers want to sell their appliances not regionally, but nationally. Similarly, what happens if a fridge owner moves, taking his Frigidaire to a part of the country where the same data plan doesn’t work?
Just when he got used to talking with his vegetable bin.