The numbers associated with the Internet of Things (IoT) are both huge (anything from 50 billion to 100 billion objects to be connected by 2020, generating, by some forecasts, $800bn in direct revenues) and tiny (sensors the size of dust particles). The extremes them-selves make the subject compelling, as does the name, with its sense of a whole new future unfolding like a sci-fi movie in our own life-times.
In many respects, the technologies are available to make this hap-pen. But without a firm commercial footing, the IoT will remain in the realm of research labs and PR companies. We know from many generations of connected technology – public Wi-Fi, 3G, even the In-ternet itself – that consumer uptake usually lags technology, and that sound profit models usually lag consumer interest.
The Internet of Things will be no different. Before it really does start to change the way we live – and it does have the potential, bit by bit, to do that – there need to be some difficult questions answered, about who makes money from it, and how.
This white paper will pose some of those difficult questions, and highlight data findings which may point towards some answers. The first edition of this document marked the launch of Rethink Technol-ogy Research’s latest analyst service, Rethink IoT (RIoT), focused on the Internet of Things and – like Rethink’s other well-respected re-search offerings – centered in particular on the business models for service providers, and the technologies that will enable those.
The first step towards a more pragmatic approach to IoT as a busi-ness, is to address some of the many myths that are building up around the concept. Some of these are purely marketing hype, but some are based on false assumptions which could disastrously set expectations for the profit model and for end user services.
In this paper, we aim to identify the most dangerous myths, and set out the landscape for IoT service providers, based on data and in-sights gathered from Rethink’s research base, and the broader wire-less and web ecosystem.
In the IoT, the variety of service providers will be far wider than in traditional carrier businesses, and at this stage, the platforms and Introduction profit models are all up for grabs. In this first white paper, we look in particular at the challenges facing mobile operators in the IoT. They will have a role to play, but current indicators suggest they are greatly overestimating how big that will be – unless they start to behave very differently.
This 32 page report contains the following Diagrams and Tables
Fig. 1— The structure of connections in M2M applications 7
Fig. 2— Rise in M2M connections over cellular or Wi-Fi to 2018 8
Fig. 3— Percentage of operator IoT revenues coming from various consumer and vertical segments 12
Fig. 4— M2M device map 13
Fig. 5— Industrial Internet data cycle 19
Fig. 6— 3GPP work to make LTE standards more friendly to M2M activities 21
Fig. 7— Key contrasts between the fundamentals of the mobile operator model, and those of IoT services 22
Fig. 8— The IoT revenue hierarchy 23
Fig. 9— Growth in service revenues from M2M applications and from new service types driven by wearables 24
Fig. 10—Forecast market share for different types of service provider in two key IoT areas: Access and End-to-End Management Services 26
Fig. 11—IoT access and service revenues for MNOs in 2018 projected by Rethink, compared with average figure projected by a group of over 40 tier one MNOs 27
Fig. 12—The diversifying groups of providers targeting IoT management services 29