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18 May 2013

Breakthroughs with M2M: moving beyond the false starts

Filed under: collaboration, Connectivity, Internet of Things, leadership, M2M, standards — David Wood @ 10:06 am

Forecasts of machine-to-machine wireless connectivity envision 50 billion, or even one trillion, wirelessly connected devices, at various times over the next 5-10 years. However, these forecasts date back several years, and there’s a perception in some quarters that all is not well in the M2M world.

HeronTowerThese were the words that I used to set the scene for a round-table panel discussion at the beginning of this month, at the Harvey Nash offices in high-rise Heron Tower in the City of London. Participants included senior managers from Accenture Mobility, Atholl Consulting, Beecham Research, Eseye, Interskan, Machina Research, Neul, Oracle, Samsung, Telefonica Digital, U-Blox, Vodafone, and Wyless – all attending in a personal capacity. I had the privilege to chair the discussion.

My goal for the discussion was that participants would leave the meeting with clearer ideas and insights about:

  • Obstacles hindering wider adoption of M2M connectivity
  • Potential solutions to these obstacles.

The gathering was organised by Ian Gale, Senior Telecoms Consultant of Harvey Nash. The idea for the event arose in part from reflections from a previous industry round-table that I had also chaired, organised by Cambridge Wireless and Accenture. My online notes on that meeting – about the possible future of the Mobile World Congress (MWC) – included the following thoughts about M2M:

MWC showed a lot of promise for machine-to-machine (M2M) communications and for connected devices (devices that contain communications functionality but which are not phones). But more remains to be done, for this promise to reach its potential.

The GSMA Connected City gathered together a large number of individual demos, but the demos were mainly separated from each other, without there being a clear overall architecture incorporating them all.

Connected car was perhaps the field showing the greatest progress, but even there, practical questions remain – for example, should the car rely on its own connectivity, or instead rely on connectivity of smartphones brought into the car?

For MWC to retain its relevance, it needs to bring M2M and connected devices further to the forefront…

The opening statements from around the table at Harvey Nash expressed similar views about M2M not yet living up to its expected potential. Several of the participants had written reports and/or proposals about machine-to-machine connectivity as long as 10-12 years ago. It was now time, one panellist suggested, to “move beyond the false starts”.

Not one, but many opportunities

An emerging theme in the discussion was that it distorts perceptions to talk about a single, unified M2M opportunity. Headline figures for envisioned near-future numbers of “connected devices” add to the confusion, since:

  • Devices can actually connect in many different ways
  • The typical data flow can vary widely, between different industries, and different settings
  • Differences in data flow means that the applicable standards and regulations also vary widely
  • The appropriate business models vary widely too.

Particular focus on particular industry opportunities is more likely to bring tangible results than a general broad-brush approach to the entire potential space of however many billion devices might become wirelessly connected in the next 3-5 years. One panellist remarked:

Let’s not try to boil the ocean.

And as another participant put it:

A desire for big volume numbers is understandable, but isn’t helpful.

Instead, it would be more helpful to identify different metrics for different M2M opportunities. For example, these metrics would in some cases track credible cost-savings, if various M2M solutions were to be put in place.

Compelling use-cases

To progress the discussion, I asked panellists for their suggestions on compelling use-cases for M2M connectivity. Two of the most interesting answers also happened to be potentially problematic answers:

  • There are many opportunities in healthcare, if people’s physiological and medical data can be automatically communicated to monitoring software; savings include freeing up hospital beds, if patients can be reliably monitored in their own homes, as well as proactively detecting early warning signs of impending health issues
  • There are also many opportunities in automotive, with electronic systems inside modern cars generating huge amounts of data about performance, which can be monitored to identify latent problems, and to improve the algorithms that run inside on-board processors.

However, the fields of healthcare and automotive are, understandably, both heavily regulated. As appropriate for life-and-death issues, these industries are risk-averse, so progress is slow. These fields are keener to adopt technology systems that have already been well-proven, rather than carrying out bleeding-edge experimentation on their own. Happily, there are other fields which have a lighter regulatory touch:

  • Several electronics companies have plans to wirelessly connect all their consumer devices – such as cameras, TVs, printers, fridges, and dishwashers – so that users can be alerted when preventive maintenance should be scheduled, or when applicable software upgrades are available; a related example is that a printer could automatically order a new ink cartridge when ink levels are running low
  • Dustbins can be equipped with sensors that notify collection companies when they are full enough to warrant a visit to empty them, avoiding unnecessary travel costs
  • Sensors attached to roadway lighting systems can detect approaching vehicles and pedestrians, and can limit the amount of time lights are switched on to the time when there is a person or vehicle in the vicinity
  • Gas pipeline companies can install numerous sensors to monitor flow and any potential leakage
  • Tracking devices can be added to items of equipment to prevent them becoming lost inside busy buildings (such as hospitals).

Obstacles

It was time to ask the first big question:

What are the obstacles that stand in the way of the realisation of the grander M2M visions?

That question prompted a raft of interesting observations from panellists. Several of the points raised can be illustrated by a comparison with the task of selling smartphones into organisations for use by employees:

  • These devices only add business value if several different parts of the “value chain” are in good working order – not only the device itself, but also the mobile network, the business-specific applications, and connectivity for the mobile devices into the back-end data systems used by business processes in the company
  • All the different parts of the value chain need to be able to make money out of their role in this new transaction
  • To avoid being locked into products from only one supplier, the organisation will wish to see evidence of interoperability with products from different suppliers – in order words, a certain degree of standardisation is needed.

At the same time, there are issues with hardware and network performance:

  • Devices might need to be able to operate with minimal maintenance for several years, and with long-lived batteries
  • Systems need to be immune from tampering or hacking.

Companies and organisations generally need assurance, before making the investments required to adopt M2M technology, that:

  • They have a clear idea of likely ongoing costs – they don’t want to be surprised by needs for additional expenditure, system upgrades, process transformation, repeated re-training of employees, etc
  • They have a clear idea of at least minimal financial benefits arising to them.

Especially in a time of uncertain financial climate, companies are reluctant to invest money now with the promise of potential savings being realised at some future date. This results in long, slow sales cycles, in which several layers of management need to be convinced that an investment proposal makes sense. For these reasons, panellists listed the following set of obstacles facing M2M adoption:

  • The end-to-end technology story is often too complicated – resulting in what one panellist called “a disconnected value chain”
  • Lack of clarity over business model; price points often seem unattractive
  • Shortage of unambiguous examples of “quick wins” that can drum up more confidence in solutions
  • Lack of agreed standards – made worse by the fact that standardisation processes seem to move so slowly
  • Conflicts of interest among the different kinds of company involved in the extended value chain
  • Apprehension about potential breaches of security or privacy
  • The existing standards are often unsuitable for M2M use cases, having been developed, instead, for voice calls and video connectivity.

Solutions

My next question turned the discussion to a more positive direction:

Based on your understanding of the obstacles, what initiatives would you recommend, over the next 18-24 months, to accelerate the development of one or more M2M solution?

In light of the earlier observation that M2M brings “not one, but many opportunities”, it’s no surprise that panellists had divergent views on how to proceed and how to prioritise the opportunities. But there were some common thoughts:

  1. We should expect it to take a long time for complete solutions to be established, but we should be able to plan step-by-step improvements
  2. Better “evangelisation” is needed – perhaps a new term to replace “M2M”
  3. There is merit in pooling information and examples that can help people who are writing business cases for adopting M2M solutions in their organisations
  4. There is particular merit in simplifying the M2M value chain and in accelerating the definition and adoption of fit-for-purpose standards
  5. Formal standardisation review processes are obliged to seek to accommodate the conflicting needs of large numbers of different perspectives, but de facto standards can sometimes be established, a lot more quickly, by mechanisms that are more pragmatic and more focused.

To expand on some of these points:

  • One way to see incremental improvements is by finding new business models that work with existing M2M technologies. Another approach is to change the technology, but without disrupting the existing value chains. The more changes that are attempted at the same time, the harder it is to execute everything successfully
  • Rather than expecting large enterprises to lead changes, a lesson can be learned from what has happened with smartphones over the last few years, via the “consumer-led IT”; new devices appealed to individuals as consumers, and were then taken into the workforce to be inserted into business processes. One way for M2M solutions to progress to a point when enterprises would be forced to take them more seriously is if consumers adopt them first for non-work purposes
  • One key to consumer and developer experimentation is to make it easier for small groups of people to create their own M2M solutions. For example, an expansion in the reach of Embedded Java could enable wider experimentation. The Arduino open-source electronics prototyping platform can play a role here too, as can the Raspberry Pi
  • Weightless.org is an emerging standard in which several of the panellists expressed considerable interest. To quote from the Weightless website:

White space spectrum provides the scope to realise tens of billions of connected devices worldwide overcoming the traditional problems associated with current wireless standards – capacity, cost, power consumption and coverage. The forecasted demand for this connectivity simply cannot be accommodated through existing technologies and this is stifling the potential offered by the machine to machine (M2M) market. In order to reach this potential a new standard is required – and that standard is called Weightless.

Grounds for optimism

As the discussion continued, panellists took the opportunity to highlight areas where they, individually, saw prospects for more rapid progress with M2M solutions:

  • The financial transactions industry is one in which margins are still high; these margins should mean that there is greater possibility for creative experimentation with the adoption of new M2M business models, in areas such as reliable automated authentication for mobile payments
  • The unsustainability of current transport systems, and pressures for greater adoption of new cars with hybrid or purely electric power systems, both provide opportunities to include M2M technology in so-called “intelligent systems”
  • Rapid progress in the adoption of so-called “smart city” technology by cities such as Singapore might provide showcase examples to spur adoption elsewhere in the world, and in new industry areas
  • Progress by weightless.org, which addresses particular M2M use cases, might also serve as a catalyst and inspiration for faster progress in other standards processes.

Some take-aways

To wind up the formal part of our discussion, I asked panellists if they could share any new thoughts that had occurred to them in the course of the preceding 120 minutes of round-table discussion. Here’s some of what I heard:

  • It’s like the early days of the Internet, in which no-one had a really good idea of what would happen next, but where there are clearly plenty of big opportunities ahead
  • There is no “one correct answer”
  • Systems like Arduino will allow young developers to flex their muscles and, no doubt, make lots of mistakes; but a combination of youthful vigour and industry experience (such as represented by the many “grey hairs” around the table) provide good reason for hope
  • We need a better message to evangelise with; “50 billion connected devices” isn’t sufficient
  • Progress will result from people carefully assessing the opportunities and then being bold
  • Progress in this space will involve some “David” entities taking the courage to square up to some of the “Goliaths” who currently have vested interests in the existing technology systems
  • Speeding up time-to-market will require companies to take charge of the entire value chain
  • Enabling consumerisation is key
  • We have a powerful obligation to make the whole solution stack simpler; that was already clear before today, but the discussion has amply reinforced this conclusion.

Next steps

A number of forthcoming open industry events are continuing the public discussion of M2M opportunities.

M2M World

With thanks to…

I’d like to close by expressing my thanks to the hosts of the event, Harvey Nash, and to the panellists who took the time to attend the meeting and freely share their views:

18 March 2013

The future of the Mobile World Congress

Filed under: Accenture, Cambridge, Connectivity, innovation, Internet of Things, M2M, MWC — David Wood @ 3:37 am

How should the Mobile World Congress evolve? What does the future hold for this event?

MWC logoMWC (the Mobile World Congress) currently has good claims to be the world’s leading show for the mobile industry. From 25-28 February, 72 thousand attendees from over 200 countries made their way around eight huge halls where over 1,700 companies were showcasing their products or services. The Barcelona exhibition halls were heaving and jostling.

Tony Poulos, Market Strategist for TM Forum, caught much of the mood of the event in his review article, “Billions in big business as Barcelona beats blues”. Here’s an excerpt:

In one place for four days each year you can see, meet and hear almost every key player in the GSM mobile world. And there lies its secret. The glitz, the ritzy exhibits, the partially clad promo girls, the gimmicks, the giveaways are all inconsequential when you get down to the business of doing business. No longer do people turn up at events like MWC just to attend the conference sessions, walk the stands or attend the parties, they all come here to network in person and do business.

For suppliers, all their customers and prospects are in one place for one week. No need to send sales teams around the globe to meet with them, they come to you. And not just the managers and directors, there are more telco C-levels in Barcelona for MWC than are left behind in the office. For suppliers and operators alike, if you are not seen at MWC you are either out of business or out of a job.

Forget virtual social networking, this is good old-fashioned, physical networking at its best. Most meetings are arranged ahead of time and stands are changing slowly from gaudy temples pulling in passers-by to sophisticated business environments complete with comfortable meeting rooms, lounges, bars, espresso machines and delicacies including Swiss chocolates, Portuguese egg tarts, French pastries and wines from every corner of the globe…

But at least some of the 72,000 MWC attendees found the experience underwhelming. Kevin Coleman, CEO of Alliantus, offered a damning assessment at the end of the show:

I am wondering if I am the boy who shouts – “but the emperor is wearing no clothes” – or the masked magician about to reveal the secrets of the magic trick.

Here it is. “Most of you at Mobile World Congress have wasted your money.”

Yes, I have just returned from the MWC where I have seen this insanity with my own eyes…

That’s quite a discrepancy in opinion. Billions in business, or Insanity?

Or to rephrase the question in terms suggested by my Accenture colleague Rhian Pamphilon, Fiesta or Siesta?

To explore that question, Accenture sponsored a Cambridge Wireless event on Tuesday last week at the Møller Centre at Churchill College in Cambridge. The idea was to bring together a panel of mobile industry experts who would be prepared to share forthright but informed opinions on the highlights and lowlights of this year’s MWC.

Panellists

The event was entitled “Mobile World Congress: Fiesta or Siesta?!”. The panellists who kindly agreed to take part were:

  • Paul Ceely, Head of Network Strategy at EE
  • Raj Gawera, VP Marketing at Samsung Cambridge Mobile Solutions
  • Dr Tony Milbourn, VP Strategy at u-blox AG
  • Geoff Stead, Senior Director, Mobile Learning at Qualcomm
  • Professor William Webb, CTO at Neul
  • Dr. Richard Windsor, Founder of Radio Free Mobile.

The meeting was structured around three questions:

  1. The announcements at MWC that people judged to be the most significant – the news stories with the greatest implications
  2. The announcements at MWC that people judged to be the most underwhelming – the news stories with the least real content
  3. The announcements people might have expected at MWC but which failed to materialise – speaking volumes by their silence.

In short, what were the candidates for what we termed the Fiesta, the Siesta, and the Niesta of the event? Which trends should be picked out as the most exciting, the most snooze-worthy, and as sleeping giants liable to burst forth into new spurts of activity? And along the way, what future could we discern, not just for individual mobile trends, but for the MWC event itself?

I had the pleasure to chair the discussion. All panellists were speaking on their own behalf, rather than necessarily representing the corporate viewpoints of their companies. That helped to encourage a candid exchange of views. The meeting also found time to hear suggestions from the audience – which numbered around 100 members of the extended Cambridge Wireless community. Finally, there was a lively networking period, in which many of the audience good-humouredly button-holed me with additional views.

We were far from reaching any unanimous conclusion. Items that were picked as “Fiesta” by one panellist sometimes featured instead on the “Siesta” list of another. But I list below some key perceptions that commanded reasonable assent on the evening.

Machine to machine, connected devices, and wearable computers

MWC showed a lot of promise for machine-to-machine (M2M) communications and for connected devices (devices that contain communications functionality but which are not phones). But more remains to be done, for this promise to reach its potential.

The GSMA Connected City gathered together a large number of individual demos, but the demos were mainly separated from each other, without there being a clear overall architecture incorporating them all.

Connected car was perhaps the field showing the greatest progress, but even there, practical questions remain – for example, should the car rely on its own connectivity, or instead rely on connectivity of smartphones brought into the car?

For MWC to retain its relevance, it needs to bring M2M and connected devices further to the forefront.

Quite likely, wearable computers will be showing greater prominence by this time next year – whether via head-mounted displays (such as Google Glass) or via the smart watches allegedly under development at several leading companies.

NFC – Near Field Communications

No one spoke up with any special excitement about NFC. Words used about it were “boring” and “complicated”.

Handset evolution

The trend towards larger screen sizes was evident. This seems to be driven by the industry as much as by users, since larger screens encourage greater amounts of data usage.

On the other hand, flexible screens, which have long been anticipated, and which might prompt significant innovation in device form factors, showed little presence at the show. This is an area to watch closely.

Perhaps the most innovative device on show was the dual display Yota Phone – with a standard LCD on one side, and an eInk display on the other. As can be seen in this video from Ben Wood of CCS Insight, the eInk display remains active even if the device is switched off or runs out of battery.

Two other devices received special mention:

  • The Nokia Lumia 520, because of its low pricepoint
  • The Lenovo K900, because of what it showed about the capability of Intel’s mobile architecture.

Mobile operating systems

Panellists had dim views on some of the Android devices they saw. Some of these devices showed very little differentiation from each other. Indeed, some “formerly innovative” handset manufacturers seem to have lost their direction altogether.

Views were mixed on the likely impact of Mozilla’s Firefox OS. Is the user experience going to be sufficiently compelling for phones based on this OS to gain significant market traction? It seems too early to tell.

Panellists were more open to the idea that the marketplace could tolerate a considerable number of different mobile operating systems. Gone are  the days when CEOs of network operators would call for the industry to agree on just three platforms. The vast numbers of smartphones expected over the next few years (with one billion likely to be sold in 2013) mean there is room for quite a few second-tier platforms behind the market leaders iOS and Android.

Semiconductor suppliers

If the mobile operating system has two strong leaders, the choice of leading semiconductor supplier is even more limited. One company stands far out from the crowd: Qualcomm. In neither case is the rest of the industry happy with the small number of leading choices available.

For this reason, the recently introduced Tegra 4i processor from Nvidia was seen as potentially highly significant. This incorporates an LTE modem.

Centre of gravity of innovation

In past years, Europe could hold its head high as being at the vanguard of mobile innovation. Recent years have seen more innovation from America, e.g. from Silicon Valley. MWC this year also saw a lot of innovation from the Far East – especially Korea and China. Some audience members suggested they would be more interested in attending an MWC located in the Far East than in Barcelona.

Could the decline in Europe’s position be linked to regulatory framework issues? It had been striking to listen to the pleas during keynotes from CEOs of European network operators, requesting more understanding from governments and regulators. Perhaps some consolidation needs to take place, to address the fragmentation among different network operators. This view was supported by the observation that a lot of the attempted differentiation between different operators – for example, in the vertical industry solutions they offer – fail to achieve any meaningful distinctions.

State of maturity of the industry

In one way, the lack of tremendous excitement at MWC this year indicates the status of the mobile industry as being relatively mature. This is in line with the observation that there were “a lot of suits” at the event. Arguably, the industry is ripe for another round of major disruption – similar to that triggered by Apple’s introduction of the iPhone.

Unsurprisingly, given the setting of the Fiesta or Siesta meeting, many in the audience hold the view that “the next big mobile innovation” could well involve companies with strong footholds in Cambridge.

Moller Centre

Footnote: Everything will be connected

Some of the same themes from the Fiesta or Siesta discussion will doubtless re-appear in “The 5th Future of Wireless International Conference” being run by Cambridge Wireless at the same venue, the Møller Centre, on 1st and 2nd of July this year. Registration is already open. To quote from the event website:

Everything Will Be Connected (Did you really say 50 billion devices?)

Staggeringly, just 30 years since the launch of digital cellular, over 6 billion people now have a mobile phone. Yet we may be on the threshold of a far bigger global shift in humanity’s use and application of wireless and communications. It’s now possible to connect large numbers of physical objects to the Internet and Cloud and give each of them an online digital representation. What really happens when every ‘thing’ is connected to the Cloud and by implication to everything else; when computers know where everything is and can enhance our perception and understanding of our surroundings? How will we interact with this augmented physical world in the future, and what impact will this have on services, infrastructure and devices? More profoundly, how might this change our society, business and personal lives?

In 2013, The Future of Wireless International Conference explores strategic questions about this “Internet of Things”. How transformational could it be and how do we distinguish reality from hyperbole? What about the societal, business and technical challenges involved in moving to a future world where everyday objects are connected and autonomous? What are the benefits and pitfalls – will this be utopia or dystopia? What is the likely impact on your business and what new opportunities will this create? Is your business strategy correct, are you too early, or do you risk being too late? Will this change your business, your life? – almost certainly. Come to hear informed analysis, gain insight, and establish new business connections at this un-missable event.

The agenda for this conference is already well-developed – with a large number of highlights all the way through. I’ll restrict myself to mentioning just two of them. The opening session is described as an executive briefing “What is the Internet Of Things and Why Should I Care?”, and features a keynote “A Vision of the Connected World” by Prof Christopher M. Bishop, FREng, FRSE, Distinguished Scientist, Microsoft Research. The closing session is a debate on the motion “This house believes that mobile network operators will not be winners in the Internet of Things”, between

9 October 2010

On smartphones, superphones, and subphones

What comes next after smartphones?

There’s big league money in smartphones.  In 2009, around 173 million smartphones were sold worldwide.  IDC predicts this figure will jump to nearly 270 million in 2010.  According to Informa, that represents about 27% of the total mobile phone unit sales in 2010.  But as Informa also point out, it represents around 55% of total market value (because of their high average selling price), and a whopping 64% of the mobile phone market’s profits.

As well as big money from sales of smartphones themselves, there’s big money in sales of applications for smartphones.  A recent report from Research2Guidance evaluates the global smartphone application market as being worth $2.2 (£1.4) billion during the first half of 2010, already surpassing the total value of $1.7 (£1.1) billion for all 12 months of 2009.

  • What’s next? If there’s so much money in the rapidly evolving smartphone market, where will the underlying wave of associated technological and commercial innovation strike next?  Answer that question correctly, and you might have a chance to benefit big time.

Three answers deserve attention.

1. More smartphones

The first answer is that the smartphone market is poised to become larger and larger.  The current spurt of growth is going to continue.  More and more people are going to be using smartphones, and more and more people will be downloading and using more and more applications.  This growth will be driven by:

  • Decreasing costs of smartphone devices
  • Improved network connectivity
  • An ever-wider range of different applications, tailored to individual needs of individual mobile consumers
  • Improved quality of applications, networks, and devices – driven by fierce competition
  • Burgeoning word-of-mouth recommendations, as people tell each other about compelling mobile services that they come across.

Perhaps one day soon, more than 50% of all mobile phones will be built using smartphone technology.

2. Superphones

The second answer is that smartphones are going to become smarter and more capable.  The improvements will be so striking that the phrase “smartphone” won’t do them justice.  Google used a new term, “superphone”, when it introduced the Nexus One device:

Nexus One is an exemplar of what’s possible on mobile devices through Android — when cool apps meet a fast, bright and connected computer that fits in your pocket. The Nexus One belongs in the emerging class of devices which we call “superphones”. It’s the first in what we expect to be a series of products which we will bring to market with our operator and hardware partners and sell through our online store.

Blogger Stasys Bielinis of UnwiredView takes up the analysis in his recent thought-provoking article, “Nokia’s doing OK in smartphones. It’s superphones where Apple and Google Android are winning”:

Smartphones and superphones share some common characteristics – always on connectivity, ability to make phone calls and send SMS/MMS, access the internet and install third party software apps.  But the ways these devices are used are very different – as different as iPads/tablets are different from laptops/netbooks.

The main function of a smartphone – is a mobile phone.  You use it primarily to do voice calls and send/receive short text messages via SMS/MMS.  Yes, your smartphone can do a lot more things – take pictures, browse the Web, play music, stream audio/video from the net, make use of various third-party apps.  But you use those additional functions only when you really need it, or there’s no better option than a device in your pocket, or when there’s some particularly interesting mobile service/app that requires your attention – e.g. Facebook, Twitter, Foursquare, or other status updaters.   But they are secondary functions for your smartphone. And, due to the design limitations – small displays, crammed keypads/keyboards, button navigation, etc – using those additional “smart” capabilities is a chore…

Superphones, on the other hand, are not phones anymore. They are truly small mobile computers in your pocket, with phone/texting as just another app among many. The user experience – big displays, (multi) touch, high quality browsers, etc – is optimized to transfer big screen PC interaction models to the limitations of mobile device that can fit in your pocket. While the overall experience doing various things on your superphone is a bit worse than doing those same things on your laptop, it’s not much worse, and is actually good enough for the extensive use on the go…

There’s scope to quibble with the details of this distinction.  But there’s merit in the claim that the newer smartphones – whatever we call them – typically manifest a lot more of the capabilities of the computing technology that’s embedded into them.  The result is:

  • More powerful applications
  • Delivering more useful functionality.

3. Subphones

The first answer, above, is that smartphones are going to become significantly more numerous.  The second answer is that smartphones are going to become significantly more powerful.  I believe both these answers.  These answers are both easy to understand.  But there’s a third answer, which is just as true  as the first two – and perhaps even more significant.

Smartphone technology is going to become more and more widely used inside numerous types of devices that don’t look like smartphones.

These devices aren’t just larger than smartphones (like superphones).  They are different from smartphones, in all kinds of way.

If the motto “smartphones for all” drove a great deal of the development of the mobile industry during the decade 2000-2010, a new motto will become increasingly important in the coming decade: “Smartphone technology everywhere”.  This describes a new wave of embedded software:

  • Traditional embedded software is when computing technology is used inside devices that do not look like computers;
  • The new wave of embedded software is when smartphone technology is used inside devices that do not look like smartphones.

For want of a better term, we can call these devices “subphones”: the underlying phone functionality is submerged (or embedded).

Smartphone technology everywhere

The phrase “smartphone technology” is shorthand for technology (both hardware and software) whose improvement was driven by the booming commercial opportunities of smartphones.  Market pressures led to decreased prices, improved quality, and new functionality.  Here are some examples:

  • Wireless communications chips – and the associated software
  • Software that can roam transparently over different kinds of wireless network
  • Large-scale data storage and information management – both on a device, and on the cloud
  • Appealing UIs on small, attractive, hi-res graphics displays
  • Streaming mobile multimedia
  • Device personalisation and customisation
  • Downloadable and installable applications, that add real value to the base device
  • Access to the Internet while mobile, in ways that make sense on small devices
  • High performance on comparatively low-powered hardware with long battery life
  • Numerous sensors, including location, direction, motion, and vision.

The resulting improvements allow these individual components to be re-purposed for different “subphone” devices, such as:

  • Tablets and slates
  • Connected consumer electronics (such as cameras and personal navigation devices)
  • Smart clothing – sometimes called “wearable computers” – or a “personal area network”
  • Smart cars – including advanced in-vehicle infotainment
  • Smart robots – with benefits in both industrial automation and for toys
  • Smart meters and smart homes
  • Smart digital signs, that alter their display depending on who is looking at them
  • Mobile medical equipment – including ever smaller, ever smarter “micro-bots”.

By some estimates, the number of such subphones will reach into the hundreds of billions (and even beyond) within just a few short years.  As IBM have forecast,

Soon there will be 1 trillion connected devices in the world. A smarter planet will require a smarter communications infrastructure. When things communicate, systems connect. And when systems connect, the world gets smarter.

This will be an era where M2M (machine to machine) wireless communications far exceed communications directly involving humans.  We’ll be living, not just in a sea of smart devices, but inside an “Internet of Things”.

Barriers to benefits

Smartphone technologies bring many opportunities – but these opportunities are, themselves, embedded in a network of risks and issues.  Many great mobile phone companies failed to survive the transition to smartphones.  In turn, some great smartphone companies are struggling to survive the transition to superphones.  It’s the same with subphones – they’re harder than they look.  They’re going to need new mindsets to fully capitalise on them.

To make successful products via disruptive new combinations of technology typically requires more than raw technological expertise.  A broad range of other expertise is needed too:

  • Business model innovation – to attract new companies to play new roles (often as “complementors”) in a novel setup
  • Ecosystem management – to motivate disparate developers to work together constructively
  • System integration and optimisation – so that the component technologies join together into a stable, robust, useable whole
  • User experience design – to attract and retain users to new usage patterns
  • Product differentiation – to devise and deploy product variants into nearby niches
  • Agility – to respond rapidly to user feedback and marketplace learnings.

The advance of software renders some problems simpler than before.  Next generation tools automate a great deal of what was previously complex and daunting.  However, as software is joined together in novel ways with technologies from different fields, unexpected new problems spring up, often at new boundaries.  For example, the different kinds of subphones are likely to have unexpected interactions with each other, resulting in rough edges with social and business aspects as much as technological ones.

So whilst there are many fascinating opportunities in the world beyond smartphones, these opportunities deserve to be approached with care.  Choose your partners and supporters wisely, as you contemplate these opportunities!

Footnote 1: For some vivid graphics illustrating the point that companies who excel in one era of mobile technology (eg traditional mobile phones) sometimes fail to retain their profit leadership position in a subsequent era (eg superphones), see this analysis by Asymco.

Footnote 2: On the “superphone” terminology:

It wasn’t Google that invented the term “superphone”.  Nokia’s N95 was the first phone to be widely called a superphone – from around 2006.  See eg here and here.

In my own past life, I toyed from time to time with the phrase “super smart phone” – eg in my keynote address to the 2008 Mobile 2.0 event in San Francisco.

Footnote 3: I look forward to discussing some of these topics (and much more besides) with industry colleagues, both old and new, at a couple of forthcoming conferences which I’ll be attending:

  • SEE10 – the Symbian Expo and Exchange – in Amsterdam, Nov 9-10
  • MeeGo Conference – in Dublin, Nov 13-15.

In each case, I’ll be part of the Accenture Embedded Software Services presence.

25 January 2010

Towards 50 billion connected mobile devices?

Filed under: Connectivity, Internet of Things, M2M — David Wood @ 2:33 am

Some time around December 2008, the number of mobile phone connections worldwide reached – according to an estimate by Informa Telecoms & Media – the staggering total of 4 billion.

The growth of mobile phone usage has been meteoric.  Quoting Wireless Intelligence as its source, an article in Gizmag tracks the rise:

  • The first commercial citywide cellular network was launched in Japan by NTT in 1979
  • The milestone of 1 billion mobile phone connections was reached in 2002
  • The 2 billion mobile phone connections milestone was reached in 2005
  • The 3 billion mobile phone connections milestone was reached in 2007
  • The 4 billion mobile phone connections milestone was reached in February 2009.

How much further can this trend continue?

One line of reasoning says that this growth spurt is bound to slow down, since there are only 6.8 billion people alive on the planet.

However, another line of reasoning points out that:

  • People often have more than one mobile phone connection
  • Mobile phone connections can be assigned to items of equipment (to “machines”) rather than directly to humans.

In this second line of reasoning, there’s no particular reason to expect any imminent cap on the number of mobile phone connections.  For example, senior representatives from Ericsson have on several occasions talked of the possibility of 50 billion connected devices by 2020:

In this line of thinking, the following types of machinery would all benefit from having a wireless network connection:

  • Cars;
  • Energy meters (such as electricity meters);
  • Units used in HVAC (Heat, Ventilating, and Air Conditioning);
  • Mobile point-of-sales terminals;
  • Vending machines;
  • Security alarms;
  • Data storage devices (including electronic book readers);
  • Devices used in navigation;
  • Devices used in healthcare.

These devices are, in general, not mobile phones in any traditional sense.  They are not used for voice communication.  However, they have requirements to share data about their state – including allowing remote access to assess how well they are operating.  The phrase “embedded connectivity” is used to describe them.  Another phrase in common use is “M2M” – meaning “machine to machine”.  As interest in tracking energy usage and resource usage grows, so will the requirement for remote access to meters and monitors of all sorts.  An article in Social Machinery reports:

M2M devices will account for a significant share of new mobile network connections on developed markets in the coming years. The main reason is the high penetration of mobile subscriptions and the proliferation of devices. Today, Europeans have more than 14 devices at home waiting to be connected according to Ericsson consumer research.

If by 2020 there are some 3.5 billion people worldwide with as many devices waiting to be connected as today’s average European, we quickly reach a figure of 50 billion devices with embedded connectivity.

Or do we?

This Tuesday and Wednesday, I’ll be taking part in the Informa “Embedded Connectivity” conference in London.  Informa have assembled a very interesting mix of speakers and panellists, covering all aspects of the emerging embedded connectivity industry.  As well as listening carefully to the presentations and (hopefully) asking some pertinent questions from the floor, I’ll be:

  • Chairing the Day One panel “Building the Business Models for a Connected Future”;
  • Speaking on the Day Two panel “The Future of Connectivity”.

One thing I’ll be keen to do is to understand the context of various predictions about the size of this market.  Indeed, although the figure of 50 billion connected devices is already astonishingly large, it’s by no means the largest figure that has been banded around:

For example, Amdocs recently spoke in a press release about:

A not-too-distant future, when more than one trillion devices will be connected to the network, an industry phenomenon the company calls “Tera-play.”

(Here, Tera is one thousand times Giga, namely shorthand for a trillion.)

Similarly, IBM regularly reference a prediction by IDC:

By 2011, IDC estimates, there will be one trillion Internet-connected devices, up from 500 million in 2006.

IBM repeat this figure in their advance publicity for next month’s Mobile World Congress in Barcelona:

Soon there will be 1 trillion connected devices in the world. A smarter planet will require a smarter communications infrastructure. When things communicate, systems connect. And when systems connect, the world gets smarter. Together let’s build smarter communications.

How do we make sense of these radically different predictions (1 trillion vs. 50 billion)?

Is it just a matter of time?

More likely, it’s a matter of different kinds of connectivity.  In all, there are probably at least five levels of connectivity.

Level 1 is the rich and varied connectivity of a regular  mobile phone, driven by a human user.  This can have attractive levels of ARPU (average revenue charges per user) for network operators.

Level 2 involves many of the devices that I mentioned earlier.  These devices will contain a cellular modem, over which data transfer takes place.  This connectivity falls under the label “machine to machine” rather than directly involving a human.  It’s generally thought that the ARPU for M2M will be less than the ARPU for smartphones.  For example, there might only be a data transfer of several kilobytes, every week or so.  Network operators will be interested in these devices because of their numbers, rather than their high ARPUs.

I’ll skip Level 3 for now, and come back to it afterwards.

Level 4 is where we reach the figure of one trillion connected devices.  However, these devices do not contain a cellular modem.  Nor, in most cases, do they initiate complex data transfers.  Instead, they contain an RFID (Radio Frequency IDentification) tag.  These tags are significantly cheaper than cellular modems.  They can be used to identify animals, items of luggage, retail goods, and so on.  Other sensors keep track of whether items with particular RFID tags are passing nearby.  The local data flow between sensor and RFID tag will not involve any cellular network.

Level 5 takes the idea of “everything connected” one stage further, to the so-called semantic internet, in which clumps of data carry (either explicitly or implicitly) accompanying metadata that identifies and describes the content of that data.  This is an important idea, but there’s no implication here of wireless connectivity.  I include this level in the discussion because the oft-used phrase “The Internet of Things” sometimes applies to Level 4 connectivity, and sometimes to Level 5 connectivity.

So where does the idea of 50 billion connected devices fit in?

An ABIresearch report, “Cellular M2M Connectivity Service Providers“, which is available (excerpted) from the website of Jasper Wireless, makes a good point:

The cost of cellular M2M solutions can be an inhibitor for some applications. Mainstream wireless modules range from approximately $25 to $90. These cost points make them difficult to integrate into some end devices, such as utility meters. A key reason for integration of ZigBee and other SRW (Short-Range Wireless) and PLC (Powerline Carrier) technologies into utility meters for AMI (Advanced Metering Infrastructure) applications is that many utilities do not feel a financially sound business case can be made for the integration of a cellular connection into every meter. Rather, a single meter, or concentrator, receives a cellular connection and is, in turn, connected to a group of local meters through less-expensive SRW or PLC connections.

In other words, there may be many devices whose individual wireless connectivity (Level 3 connectivity):

  • Is more complicated than an individual RFID tag (Level 4), but
  • Is simpler (and less expensive) than cellular modems (Level 2).

As time passes, the reducing cost of wireless modules will increase the likelihood that solutions will consider deploying them more widely.  However, at the same time, the simpler hardware options mentioned will also decrease in cost.

It’s for these reasons that I’m inclined to think that the number of cellular modems in 2020 will be less than the above ballpark figure of 50 billion.  But I’m ready to change my mind!

Footnote: A useful additional prediction data point has just been issued by Juniper Research:

The number of Mobile Connected M2M and Embedded Devices will rise to almost 412 million globally by 2014 with several distinct markets accounting for the increase in their number.

The markets include: Utility metering, Mobile Connected Buildings, Consumer & Commercial Telematics and Retail & Banking Connections. These areas will all show substantial growth in both device numbers and in the service revenues they represent, while Healthcare monitoring applications will begin to reach the commercial rollout stage from 2012.

“The most widespread category will be connections related to smart metering, driven partly by government initiatives to reduce carbon emissions,” says Anthony Cox, Senior Analyst at Juniper Research. Other areas, such as the healthcare sector, will ultimately see more potential in achieving service revenues, he says.

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