by Nic Stirk
In the wireless industry talk about embedded/connected devices, and the associated M2M communications they require, is a hot topic of conversation. Estimates of the number of connected devices the world will see in the coming years is truly mind boggling, and are actually so large as to lose relevance. Kind of like the amount of money required to bailout a bank, how am I supposed to internalize a number with more than nine zeros behind it?
Compounding the problem is the fact that, unlike bank bailouts, a tidal wave of embedded devices has yet to materialize. In the US the three largest wireless carriers announced their respective embedded device connections for the first time for 2Q10 (http://bit.ly/aMY026). In 3Q10 AT&T came in first place with 8.5 million connections. Verizon was in second place with 7.9 million connections. Sprint did not report this figure for 3Q10, but took the third spot with around 1.9 million connections in 2Q10.(Interestingly,Sprint has pointed out that ARPU for connected devices is significantly lower than for traditional subscriptions, but the cost is also significantly lower, resulting in higher margins.)
A recent blog post by David Pringle goes a long way toward explaining the disconnect between forecasts and reality (http://bit.ly/dBIyVV). As he deftly points out, the basic infrastructure currently in place is adequate to facilitate the anticipated explosion in connected devices. But there are two obstacles that stand in the way. The first is cross-border compatibility, “The way the telecoms market is structured and regulated, on a nation-by-nation basis, means some of these embedded solutions could be difficult to implement in some markets and the industry could struggle to scale.”
The second issue is trust. The data generated by billions of devices has the potential to create both positive and negative effects on society. Without the proper safeguards in place, adoption by both businesses and consumers will be limited.
These barriers highlight the need for connected device platforms that enable easy on-boarding and device management and, importantly, have the flexibility to allow seamless cross-boarded connectivity. At the same time carriers need to educate consumers and regulators on how this information will be used, and how it will be protected.