Even if IoT hits 20bn devices by 2020 mobile operators still won't care
Data-sipping chips worth tiny fraction of global subscription revenue
LPWAN Forum Cloudy data-crunchers and mobile operators will take over the Internet of Things by 2020 even though there's comparatively little money in it.
So said Nick Hunn of independent consultancy Wifore at LPWan Forum London on Thursday.
By following the money and taking a broad view of the terms "IoT" and "value", Hunn painted a downbeat, if not entirely bleak, picture of where the Internet of Things is headed over the next few years.
Why are mobile operators interested in IoT? "Fear of missing out," said Hunn, who accused them of dropping the ball on networking standards and therefore being "desperate to appear relevant" with no clear successor to GPRS on the horizon as standards-setting bodies concentrate on building ever-fatter pipes for smartphones.
As for following the money, Hunn was coldly logical as he described how mobile contracts for M2M data "still sit at $100 [annually] and above", while South Korean telco SK Telecom offers 100KB per month for a princely $0.30.
"100KB is a helluva lot of data. We probably only need 10KB a month for our purposes," Hunn said as he explained how, in his view, IoT data contract prices will drop to levels of around $2 a year in the rest of the developed world, following SK Telecoms' lead.
Is this a good thing? Yes, for IoT customers – but not really for the telcos. The GSMA (whose head of IoT is very insistent that IoT is "not vapourware") estimates that global mobile subscriber revenue, excluding M2M/IoT, will hit $3.7tn by 2020. Taking an estimate of 20 billion connected IoT devices by 2020, each sipping data at 20 cents a month (Hunn's estimate of IoT contract prices in four years' time), gives $48bn a year of global revenue – a whopping 1.3 per cent of global mobile subscriber revenue.
On the topic of prices generally, Hunn also had a pop at the cost of cellular modems inserted into IoT gadgets. With current prices at about $10 per modem, he reckoned: "We've got to get that cost down to a dollar. The cellular industry likes things to be backwards compatible so they put a lot of crap into the silicon."
On the future of the IoT industry, Hunn also predicted that the current crop of tech dreamers will lose out to established "cloud and analytics people taking over that space" via a brief pause with LPWAN operators.
All in all, IoT folk are living in very interesting times – and those times, as some Nobel Prize-winner once rasped, are a-changin'. ®