Is IoT at Risk of Stalling?

The wide-area IoT connectivity battle which has been brewing for a couple of years is heating up. Early last month at CES, Ericsson announced the release of “the first complete cellular low-power wide-area (LPWA) solution” to AT&T. At the same time, the Wi-Fi Alliance branded 802.11ah as Wi-Fi HaLow targeting applications in smart home, connected car, digital healthcare, industrial, retail, agriculture, and smart cities. These are but two samples of the competition between a great variety of technologies that has left the market largely confused. This is dangerous as confused markets run the risk of stalling. The risks increases with increased ambiguity on the value proposition and use cases of the technology. Nowhere is this more pronounced than in IoT where there are many barriers to adoption ranging from financial and economical considerations to technical and regulatory.

Wide-area technologies optimize power consumption to provide field-economical connectivity for devices. This is unlike the data-optimized technologies prevalent in consumer devices powered by LTE, Wi-Fi and Bluetooth. The value proposition of wide-area connectivity center on low-cost information from sensors that optimize process and procedures.

Cellular technologies have the coverage but are power guzzlers because they are designed for data. TEMs and MNOs are taking these technologies on a path to optimize power consumption. Given the deployed infrastructure, this is an important competitive advantage, but how much of current infrastructure can be leveraged is an important factor in their market and technology strategies.

On the other hand, many private networks have been deployed to cater to market verticals. These networks leverage short and medium range technologies. An example is Wi-SUN which is based on 802.15.4g and designed for applications in smart utilities. This sector relies on unlicensed spectrum and optimizes the technology to match the application requirements. The key issue here is the incumbency power of ecosystem players and their hold on the value chain.

Finally, there is the emerging LPWA sector which bears some similarity to cellular in terms of deployment scenario. However, unlike cellular, these technologies are power optimized and they operate in unlicensed spectrum making them viable for private networks. SigFox, LoRa, Weightless, RPMA and a host of other technologies that make up this sector have taken different approaches to market development. The LPWA is working to validate different business models. For example, SigFox is betting on a service provider play, while LoRa focuses on developing a viable ecosystem that’s key for volume scalability. The key in this sector is market readiness and viability of approach to market.

With so many options, market confusion is not unjustified as every player is elbowing for a slice of market. In this battle, information becomes critical. Marketing hype overtakes logical arguments to obscure facts and injects a good dose of fiction. This inevitably leads the market to stall with innovation being the first casualty. But it does not have to be this way!

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* For more information on wide area IoT connectivity, download Xona Partners’ executive summary and/or contact me.