Earlier this month, Qualcomm made a number of 5G related announcements at its 4G/5G Summit in Hong Kong.

Unlike previous years, the recent event included a dedicated day of interactions with only journalists and analysts. I jumped at the chance for some candid conversations and left with three key takeaways around 5G and IoT:
1. Qualcomm has rapidly moved from prototypes (at 2017’s summit) to more concrete demos and tangible products and solutions ready for commercialisation in 2019 (this year’s event), a remarkable step which companies in the 5G ecosystem can build on.
2. The company is increasingly showing its technology leadership in 5G, leading with its mmWave solutions that will harness the indoor coverage ability for enterprise and residential use.
3. That Qualcomm’s ecosystem partners chose to share 5G enterprise use cases in industrial, retail, and automotive sectors suggests they expect these to be early adopters. Retail is unexpected as it isn’t often listed as a third example.

[1]Main developments
Overall, Qualcomm made eight new 5G-related announcements at its summit (see table, right, click to enlarge). Many are consumer-facing technical innovations aiming to accelerate developments in 5G and IoT. This is not surprising. Qualcomm, after all, is racing towards achieving 5G commercialisation in 2019 and consumer use cases are some of the first to materialise.

What is surprising is Qualcomm’s challenge to the broader 5G ecosystem to design the kind of immersive customer experience in a device form factor which 5G and mmWave will support.

This focus on designing products with enhanced customer experience in mind should not be ignored.

If successful, it could accelerate adoption of consumer IoT based on two new technological enablers from Qualcomm:
1. Its significantly reduced-size 5G mmWave antenna module should spur creatives to design the kind of extended reality wearables as ordinary as a pair of glasses, or the visor that Geordi La Forge wears in Star Trek. Qualcomm was candid (in private) that the current immersive form factor needs improvement to spur mainstream adoption.
2. The small cell partnership with Samsung (announcement number three in the table) is a significant move that helps remove the need to make a choice between Wi-Fi and cellular devices. While not necessarily positioned for in-home deployment, ubiquitous 5G coverage will help to make the case for connectivity beyond Wi-Fi or Bluetooth in consumer devices.

Cautious optimism
During a 5G deep dive session shared with journalists and analysts, Qualcomm showed a lab test focused on the performance of 5G mmWave indoors. It offered two future use cases in Enterprise Networks and factory automation, with the expectation that private networks should increasingly become economically and technically viable to deploy. Qualcomm backed this statement based on its own busy pipeline built out of committed business development efforts with C-level executives in each individual key customer.

I do not doubt Qualcomm’s experience, but would caveat the optimism with two additional points. First, Qualcomm’s current company-specific business development approach adds to the time needed to discover technical and business needs. Second, the mathematics of return on investments equations will always demand a strong business case to justify spending.

These caveats are important because our own Enterprise Survey (currently in progress) reflects a cautious prioritised investment approach towards 5G private networks among large manufacturers.

Overall, much of the excitement during the Qualcomm 4G/5G Summit was down to the technology achievements within the last year, which set the ground for further developments.

Implied above, the challenge from Qualcomm to the rest of the ecosystem is also to make progress on business models for both consumer and enterprise adoption. For example, the topic of who will pay for the customer experience was not discussed.

To this end, innovation is needed around the business enablers to price such a benefit. We are used to the one-off transactions of a product purchase, but 5G enables service-oriented transactions which require new mechanisms. Qualcomm’s Summit may not be the forum to discuss these outstanding areas. But, with MWC 2019 only a few months away, I expect to see more examples of use cases, collaboration and deployment from the 5G ecosystem in the New Year.

– Yiru Zhong, lead analyst for IoT and Enterprise, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2018/10/GSMAi_blog_table_QualcommSummit.png

India has 1.16 billion mobile connections (that is huge), making it the second largest market in the world. With this connection base and low data costs, it is not very surprising that the country’s networks today are transporting more than 10 million TBs of data in a quarter, higher than that of the US and China combined.

Accompanying the recent growth in mobile data traffic, the country has also witnessed tremendous telecom M&A, reducing the number of mobile players from 13 in 2016 to only four in 2018 [1].

Why does any of this matter?

Because, consolidation delivers an opportunity for surviving players to acquire new customers, requiring an understanding of customer preferences and brand switching behaviour.

You only need to look to porting request trends to see this brand switching in action: requests in the country have witnessed an average growth rate of around 30 per cent over the last four years, while connections grew at an average of 6 per cent over the same time (see chart, below, click to enlarge).

[2]

So, what is driving this behaviour? While we know that Reliance Jio disrupted the market, there are other factors that affect the brand switching behaviour in consumers.

Price perception
India is a prepaid driven market with a large share of price sensitive customers. It’s no surprise, then, that pricing has a major impact on brand switching with customers moving to a new operator when they feel prices surpass the reference of “reasonable.” It’s even less of a surprise that operators understand this and revise their tariff plans frequently to cater to individual needs and requirements.

A good example of pricing strategy in India comes from Reliance Jio, which captured more than 20 per cent market share within two years of its launch, riding on an aggressive strategy of low tariff plans. Consequently, the new entrant grabbed a significant market share from incumbent operators. Bharti Airtel and Vodafone India joined the league and played the price card to attract and retain the customers resulting in the tariffs as low as $2.50 per month for unlimited voice and 1.5GB of data per day. Where one operator leads, the others generally must follow.

Brand image
Brand image is a result of myriad strategies and messaging opportunities: word of mouth; adverts; public reputation building; and marketing communication.

In India, Airtel and Vodafone maintained a brand image of network reliability and high-end customers, while Idea had affiliated its image to the youth. On the other hand, Reliance Jio presented itself as a cost-effective brand. Based on these images, customers would gravitate towards the brand that better aligned to their needs.

In the face of stiff competition, however, this has had to change: operators are now connecting their brand images with value added services and converged offerings, with the focus on increasing their market shares.

Ease of portability
Ease of number portability acts as a catalyst to customers’ switching behaviour. It doesn’t cause switching, but it sets the stage for one operator to more easily poach subscribers.

Yet, if tremendous growth in porting requests weren’t enough to create strong competition, the Indian government and policymakers are taking steps to further ease the process of switching among the brands. The Indian regulator, TRAI, has proposed to reduce the time taken by an operator to give a clearance to porting requests within the same circle to two days from a mandate of four days currently.

The Indian mobile telecommunication industry is entering a transition period: due to easy access to information and a wide range of offerings it is easier than ever before for customers to switch between service providers.

While we might understand the factors which have impacted the brand switching in the past, operators also need to consider strategies that will help them to retain customers. Operators understand this and are now moving away from conventional retention strategies, instead finding progressive solutions to make their customers remain loyal.

For example, as the market shifts from a voice- to data-driven economy, operators are now offering data-driven solutions to customers as their value added proposition including converged offerings, partnerships with OTT players to offer benefits like free annual subscriptions to Amazon Prime or Netflix, to their customers. This is a common strategy in many mature markets, but the fact that it’s now a feature of service offers in India is telling. It points to impressive development in only a short amount of time.

As tariff wars have reached maturity, it’s only natural to expect service wars to ensue as a customer retention feature. Where India has moved to quickly catch up with the rest of the world in terms of data usage and, now, customer retention, it will be impressive to see what innovations are coming.

– Radhika Gupta – head of Data Acquisition, GSMA Intelligence
– Lakshya Rastogi – research analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/blog/blog-is-india-consolidation-too-much-too-fast/
[2] https://www.mobileworldlive.com/wp-content/uploads/2018/12/12-Dec-GSMAi-blog-chart.png

First off, a disclaimer. It’s an important one (not like the warning that your McDonald’s coffee may be hot).

Last week, I spent some time at Facebook’s Telecom Infra Project (TIP) Summit and put together a blog post titled The Problem with Facebook’s Telecom Infra Project. If you haven’t seen it yet, you can check it out here [1].

If you did read it, you probably wondered why it took me so long to get to the actual problems I see TIP facing. The bulk of the blog was focused on a handful of more positive messages: that initial concerns about industry support for TIP were quickly put to rest; that an initially vague focus quickly sharpened; that the core value proposition of connecting the unconnected is a real issue which aligns with our own work here at GSMA Intelligence.

Was it a love letter? Not quite. But was it clear to anyone reading beyond the headline that I really like TIP, what it hopes to accomplish and the progress it is making? And within that context, the point of highlighting the problem referenced in the headline was less about disparaging TIP than it was flagging a challenge that needs to be focused on to create success.

Of course, with that as a set-up, it only makes sense to talk about a few other problems: if we want to successfully navigate the challenges, then we need to recognise them. And to be completely honest, the one flagged last week might not be the most pressing.

Broad versus deep
When I highlighted that OpenRAN, mmWave and optical transport programmes were being complemented by new TIP work streams, the point was to recognise forward progress. But there’s a potential downside to this progress: lack of focus.

There is no doubt that vRAN fronthaul; efficient power technologies; artificial intelligence and machine learning; end-to-end network slicing; solution integration; and edge networking are all critically important telecoms technologies. And there is no doubt they can all benefit from the TIP treatment.

What is less certain is whether TIP can focus on all of these simultaneously and show progress with scaling attractive solutions which are more than one-off demos or trials. As the scope of any company or organisation expands, there is always the risk of spreading its energies too thin. TIP is not immune to this.

Network supplier expertise versus inertia
If TIP is successful, it will bring new technologies into operator networks. And with those technologies will come new vendors. Hence, we saw the best performing vendors of the OpenRAN RFI including a broad set of players extending beyond the traditional end-to-end network players: Mavenir; Parallel Wireless; Altiostar; Fairwaves; Radisys; BaiCells; NEC; ASOCS; Phluido; Comba; Dali Wireless; and VANU (in no particular order).

From an innovation and pricing perspective, competition is a good thing. But, for the most part, today’s wireless networks have been built by a handful of network vendors. In many cases this includes the deployment and management of network gear. And, over the years, this gear has come to include technologies which can be upgraded to support new generations of wireless access. It all adds up to an inertia that favours working with incumbent vendors: they are easier to work with because they know how the existing networks run and how to keep them running.

Commercial wrangling versus open commitment
The inertia I just mentioned stretches beyond network operations and deployment. It is a core dynamic in how networks are purchased. Setting up new commercial arrangements with small, relatively unproven vendors can be risky: the type of risk procurement departments loathe. And, while a new set of vendors might promise a focus on innovation and openness, larger vendors are often in a position to cut costs in order to avoid losing out on business. The question for an operator, then, is how much that focus on openness is really worth? Can an investment in the future benefits of openness and supplier diversity be justified, especially when service pricing and margins are under pressure?

None of this is news to the people who run TIP, including its vendor and operator members. They all get it. And that helps to explain a vision Telefonica outlined of a new telecom infrastructure value chain which includes hardware vendors, software vendors, node integrators, network integrators, support vendors, and service vendors. Breaking down the end-to-end value chain helps to break some of the inertia (operational or commercial) that accrues to end-to-end players.

It’s a smart move. It’s necessary. But it’s not sufficient. Maintaining progress will require a few other things.

TIP will need to make a few bets. Rather than spreading its energies around, it will need to focus on a few technologies (like it did with optical transport and OpenRAN) where it can show progress and gather momentum. These bets need to touch incremental network opportunities, places where it is easier for an operator to work with new vendors because incumbency isn’t an issue yet.

Do you need an example? Consider the new TIP focus on edge networking, including the Edge Application Developer Project Group. While edge promises latency improvements, transport efficiencies and new operator revenues beyond connectivity, it’s still a very nascent space. It’s still very much anyone’s game.

The most important requirement, however, stretches beyond TIP itself. If operators are committed to open networking innovations, it must be reflected in their purchasing. They can’t always be swayed by incumbent vendors offering the same solutions at a discount.

This means new procurement thinking. It requires faith in the long-term benefits of open network solutions, even if reliability or standards support doesn’t compare with traditional network vendors. It may require co-investment or involve working with incumbent vendors, driving them further and further towards openness.

I understand that this is a lot to ask but change won’t come from building, and buying, networks the same way they have for years. Trials and demos are a good start, but need to be followed by deeper actions and commitments.

– Peter Jarich, head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/blog/intelligence-brief-the-problem-with-facebooks-telecom-infra-project/

Everyone is getting excited about the brilliant future that 5G offers, but let’s face it: without a lot more spectrum dedicated to mobile services, dreams of faster speeds and greater capacity will just remain dreams.

But only last week the world saw two more small steps to fulfil those 5G dreams with two 3.5GHz auctions which offered spectrum discussed for 5G services coming to an end. And, with them, came a very noticeable disparity in final results between the two.

While three Finnish incumbent operators went just slightly above the starting prices, Italian bidders splashed out [1] on their investment, paying almost 11-times more than the reserve price (and 56 times more than Finnish bidders) for nearly half the amount of spectrum. With a few 3.5GHz auctions completed in the past 18months and several more on the way, it’s a good moment to look at what happened so far and anticipate what may happen in the future.

Of course, there are other bands important for 5G deployment as well, like mmWave bands (especially for densely populated areas). However, only Italy and South Korea have organised 5G-specific mmWave tenders so far (with operators paying only slightly more than starting bids), making 3.5GHz the most instructive as far as 5G goes.

[2]

Less (spectrum offered) is more (in prices paid)
Across these recent auctions, Finland offered the most spectrum: 390MHz. That is almost twice as much as offerings in Spain and Italy, with the UK auctioning even less (150 MHz). This was reflected in final prices: in terms of €/MHz/Pop (PPP adjusted), Spain paid almost twice; the UK four-times; and Italy nearly 13-times as much as Finland did.

It’s noteworthy that none of the recent 3.5GHz auctions ended with unsold spectrum.

Less spectrum offered means scarcity, but this does not necessarily mean it was artificially imposed by national regulators. In some countries, spectrum has been reserved to vertical industries or there already have been incumbents in the band, as licences have been assigned to fixed wireless access (FWA) or WiMax services (Spain, Italy, and the UK). Regardless, it creates the pressure for bidders to fight fiercely for any piece of spectrum left, which naturally pushes the prices up. And MNOs will need a lot of spectrum to deploy 5G properly; at least 80MHz to 100MHz of contiguous spectrum per operator in the mid-band, according to ITU.

Offering a sufficient supply of spectrum in the 3.5GHz band will take some of that pressure from the bidders and leave them with more resources to invest in actual 5G deployment.

Noteworthy, some mobile operators have been able to get access to the 3.5GHz band through the secondary market rather than government auctions, acquiring spectrum licences from incumbent FWA providers: Masmovil acquired Neutra and Eurona in Spain; Three UK purchased UK Broadband; and Fastweb bought spectrum licences from Tiscali in Italy. This may be a way of gaining access to some of the much-needed spectrum in the band without having to wait for government action. However, acquiring the spectrum piecemeal may mean that some band pre-planning will have to occur.

Lot size matters…a lot
Countries assigning spectrum in 3.5GHz have shown two different approaches so far when it comes to block sizing: offering a small amount of larger blocks (Finland, Italy, Czech Republic); or offering large amounts of small 5MHz to 10MHz blocks (South Korea, UK, Spain, Ireland).

Large contiguous blocks of spectrum ensure the higher quality of future 5G services. However, offering lots that are too big during tenders may also cause spectrum scarcity and lead to higher prices if the number of potential applicants exceeds the number of blocks. This can be illustrated by the recent example of Italy, where only two lots of 80MHz and two smaller lots of 20MHz were offered, forcing operators to fight for the bigger lots. Appropriately sized lots may allow operators more bidding flexibility and ensure more participants will end up with winning spectrum, and that more end customers will be offered 5G services.

[3]

5G hype is attracting new players
In Finnish and South Korean auctions, only incumbent operators participated and the price increase compared to starting bids was rather low (19 per cent and 13 per cent respectively), as applicants had a lot of spectrum to bid for (130MHz and 93MHz respectively). In other markets, however, participation of potential new entrants increased the competitiveness, which left the bidders with less spectrum available, on average, per bidder (typically only 30MHz to 40MHz in the UK, Czech Republic and Italy). This fuelled the struggle to secure as much spectrum as needed.

While allowing new entrants shouldn’t be avoided, their presence within the bidding process has to be taken into consideration, in terms of auction elements such as reserve prices, lot size or overall auction design, especially regarding three- or four-player markets.

[4]

Everyone is closely watching the forerunners
It’s no surprise that 5G spectrum auctions are garnering more interest and analysts are trying to use those results to predict the future pricing trends. While benchmarking to other markets should not be the only element considered in spectrum valuation, results from previous auctions are carefully studied by regulators in terms of setting their own reserve prices and the temptation to set them on a higher level may be strong.

However, every country is unique, with its own market forces and conditions to consider, so benchmarking at this stage, especially given the wide variety of outcomes, is risky. So far, 5G auctions have happened only in developed markets and the dynamics and conditions are very different from those in the developing world.

Designing auctions with sufficient spectrum offered, appropriately sized lots and reasonable reserve prices is important and also complicated: it’s possible that some countries may even turn away from auctions as the assignment mechanism for some of the 5G spectrum. The Hong Kong Secretary for Commerce and Economic Development suggested spectrum could be assigned to MNOs for free in order to ensure access to spectrum and result in boosting national competitiveness. Additionally, many countries have already assigned fixed wireless/WiMax licences in the 3.5GHz band, often to MNOs.

The question remains whether the operators would be able to convert their licences to tech neutrality and offer 5G services, without having to undergo a long and costly process of reapplying and competing for the same band they already use. The ultimate goal is putting spectrum to good use and, clearly, regulators are recognising that auctions are not the only approach for spectrum assignment in the 5G era.

– Robert Wyrzykowski, analyst – Mobile Spectrum, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/featured-content/home-banner/operators-splash-e6-5b-in-italy-5g-spectrum-auction/
[2] https://www.mobileworldlive.com/wp-content/uploads/2018/10/Oct-11-GSMAi-blog-figure-1.png
[3] https://www.mobileworldlive.com/wp-content/uploads/2018/10/Oct-11-GSMAi-blog-figure-2.png
[4] https://www.mobileworldlive.com/wp-content/uploads/2018/10/Oct-11-GSMAi-blog-figure-3.png

This week, Facebook hosted its TIP Summit 2018 – the third time it has convened Telecom Infrastructure Project (TIP) members and other interested parties since the project’s kick-off in 2016.

When launched back at MWC 2016, the TIP buzz was undeniable. Just as Facebook was disrupting the businesses of so many operators, it was now promising to disrupt the telecom networks business with a focus on open networking technologies.

It was a direction in which the telecom infrastructure space was already moving and an extra push from a name like Facebook was more than welcome, especially since it was all in the name of bringing network costs down and connecting the unconnected.

What’s not to like?

Well, for starters, it wasn’t quite clear why vendors would get with the programme. Nokia was a founding member, but a plan to open up “what is a traditionally closed system” would obviously threaten the business of anyone currently selling into that closed system.

Of course, when queried about their support for network innovation, vendors are fond of saying that they develop and build what their customers are willing to pay for. Would it be safe to assume, then, that operators which have often been slow to change the way they do business would be slow to ask their supplier to follow suit? Or that, if these operators did ask vendors to innovate in the name of openness, they might not actually buy the resulting solutions – especially if they were less reliable or more expensive in the near-term?

And yet, the momentum behind TIP has continued to build. Operators see an opportunity to drive network innovation. Vendors (especially non-incumbents) see an opportunity to break into the network business formerly closed off to them. Facebook sees an opportunity to build a tighter relationship with the service providers it relies on for connectivity, while driving the altruistic aim of increasing emerging market Internet usage.

Growing support
A handful of members at launch became “more than 300” by the first TIP Summit and “over 500 member organisations” today. An early, somewhat vague, focus on “access, backhaul, core and management” morphed into concrete work around OpenRAN, mmWave and open optical technologies. These, in turn, were joined by additional work streams around: vRAN fronthaul, power and connectivity, Artificial Intelligence and Machine Learning, end-to-end network slicing, and solution integration.

This week, we saw the announcement of further work around system disaggregation (optical and cell site gateway), the results of vRAN fronthaul trials, OpenCellular trials, and the OpenRAN RFI launched in June by Vodafone and Telefonica [1]. By all accounts, the results have been impressive.

Job done, right? Maybe not.

The problem comes back to the core TIP value proposition of connecting the unconnected. It was the proclaimed focus of the first day of the 2018 TIP Summit. It was called out as the whole point of TIP in a fireside chat between Facebook’s Jay Parikh (VP of Engineering) and Ina Fried of Axios [2]. And, Facebook’s motives aside, it’s a real issue. Just take a look at our Mobile Connectivity Index (overview below).

[3]

In some regions (like Sub-Saharan Africa), nearly 40 per cent of the population isn’t covered by a mobile network. And even where network coverage tops 80 per cent across other regions, the percentage of people who are covered but not connected – thanks to cost, content availability or consumer readiness – is often more than 40 per cent.

There’s no doubt connectivity matters. Whether or not Facebook and TIP can change the connectivity landscape is another matter.

Sure, bringing down network infrastructure costs could make it easier to roll out networks to the uncovered. But conflating network infrastructure with networks is a mistake. Networks require siting infrastructure. They require spectrum. They require people to keep them running. TIP’s ability to impact those things is limited.

If there’s any doubt about the magnitude of the costs that go beyond network infrastructure, consider what operators spend on opex vs capex. We’re not talking an even split. Or even two-to-one. In many cases, it’s closer to five-to-one, or even more skewed towards opex.

TIP may be able to drive network infrastructure scale and cost efficiencies, but that’s only one part of the connectivity equation.

Ultimately, this is why it’s encouraging to see TIP messaging around rural connectivity accompanied by progress on innovations like network slicing, edge networking, 5G NR and other technologies that can be deployed everywhere. Not because rural connectivity isn’t important, but because the ability of TIP innovation to drive success may always be limited by dynamics beyond technology.

– Peter Jarich, Head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/featured-content/home-banner/telefonica-and-vodafone-shake-up-ran-market/
[2] https://www.mobileworldlive.com/featured-content/home-banner/facebook-ramps-up-terragraph-reassures-operators/
[3] https://www.mobileworldlive.com/wp-content/uploads/2018/10/MWL_mobile_connectivity_index.jpg

Recent weeks have seen interesting developments within the IoT ecosystem, coming from the likes of ARM, Google, Intel, Qualcomm and Samsung. It made me revisit ecosystem players’ positioning within the IoT value chain, having already looked at how operators are positioned [1].

The simple fact of the matter is the importance of partnerships and collaboration cannot be overstated in IoT. The point laboured time after time is that no one company can do it all, by which I mean provide an end-to-end solution spanning chipsets, application and system integration. Sounds pretty obvious, but it doesn’t mean IoT ecosystem players haven’t tried to become sole solution providers.

So, let’s take a look at how some of the top tech giants are positioning in IoT. For simplicity I’ve split IoT capabilities into devices, modules and chipsets, platform management, data analytics, cloud and security layers.

[2]In essence, the boundaries between traditional technology/IT players and others are blurring as new business models in IoT emerge around data, analytics and, in a more broad sense, services. Companies are moving up and down the IoT value stack, aiming to capture the largest piece of the IoT revenue pie (see chart, click to enlarge – the red circle identifies the company’s core IoT capability, the arrows signify their expansion direction, and grey indicates areas of focus).

Just to remind ourselves how big this is, GSMA Intelligence forecasts revenue from IoT applications, and platforms and services (including cloud and analytics), will increase sixfold between 2017 and 2025, bringing in $137 billion and $754 billion respectively. In short, a rather attractive revenue opportunity.

Upping the software stack: Technology companies such as Google, Microsoft and Amazon are adding devices to their existing software stack. Google has been investing in machine learning (ML) and artificial intelligence (AI) for years and is already well positioned in the data analytics space. During its recent Google Cloud Next ’18 event, the tech giant announced initiatives aimed at moving analytics close to the edge or near the point of data generation: namely, Cloud IoT Edge (software for IoT gateway-class devices running Android Things or Linux) and Edge TPU (a chip specifically designed to offer ML inference on edge devices).

This is a pretty compelling proposition for the fast growing industrial IoT segments such as smart cities, oil and gas, utilities and manufacturing. I also can’t ignore Amazon’s Alexa, which has been a runaway success in the smart speaker market. For example, Ofcom figures show 13 per cent of UK households now own a smart speaker, of which 75 per cent are Amazon Echo models (which feature the Alexa assistant).

From the devices up the stack: On the other side of the spectrum, traditional manufacturers and OEMs including Cisco, Intel, ARM, Samsung and Qualcomm are augmenting their existing core capability, hardware (modules and devices), with platform and data analytics capabilities. These companies grow their current capabilities either organically or by acquisitions with the ultimate goal to move into AI.

But also they want to address the pressing issue that is IoT security.

For instance, Samsung has been expanding its capabilities up the IoT value stack to include platform management and data analytics, but also down the stack – launching ARTIK modules tailored for IoT and ARTIK IoT Security. Recently, the company committed to a KRW25 trillion ($22.3 billion) investment [3] over three years in areas including IoT, AI and 5G.

Despite its bid for NXP Semiconductors falling [4] through, Qualcomm’s optimism when it comes to the IoT opportunity shows no sign of abating. It expects $1 billion in revenue from IoT this year as its chips make their way into even more devices: with a total of more than 200 wearables and 1,300 different wireless headsets, earbuds and wireless speakers on the market.

Platform seems to be the only game in town when it comes to IoT: Platforms management (in which we include connectivity, device and application management) is an almost default position for any digital company with designs on the IoT market. Most recently, ARM announced its ARM Pelion platform to support its vision of 1 trillion connected devices by 2035. This stems from the acquisition of Treasure Data, an enterprise data management company which it dubbed “the final piece of our IoT enablement puzzle”, along with the integration of its Mbed IoT Device Management platform with the recent acquisition of Stream Technologies.

Last, but not least, if it ain’t working…let it go: Intel reported revenue of $880 million in Q2 from its IoT Group, a 22 per cent year-on-year increase equivalent to 5.2 per cent of overall revenue. However, in April 2018, a decade after the acquisition, Intel divested Wind River [5]. Why? In the words of IoT Group leader Tom Lantzsch, it is a move designed to sharpen Intel’s focus on growth opportunities which align to Intel’s data-centric strategy.

– Sylwia Kechiche, principal analyst – IoT, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/blog/blog-the-operator-opportunity-in-iot-not-lost-yet/
[2] https://www.mobileworldlive.com/wp-content/uploads/2018/08/IoT-ecosystem-pic2.jpg
[3] https://www.mobileworldlive.com/featured-content/top-three/samsung-to-boost-ai-5g-investment/
[4] https://www.mobileworldlive.com/featured-content/home-banner/qualcomm-drops-nxp-bid-reveals-iphone-blow/
[5] https://www.mobileworldlive.com/featured-content/top-three/wind-river-charts-iot-course-after-intel-split/