Cellular IoT: Poised to Hit Consumer Product Market

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Illustration: © IoT For All

With 2020 underway, I’d like to toss my hat in the ring with others who have penned predictions for IoT in 2020. I’ll get right to it; I predict the wide-spread introduction of IoT products with embedded cellular connectivity to the consumer market.

To date, IoT hardware can be predominantly divided into two groups: consumer products, which rely on Bluetooth and WiFi (think connected appliances, home security systems, speakers/headphones, and wearables) and business products that leverage cellular (think automated payment systems/inventory kiosks, fleet, and asset trackers and prescription medical devices).

In the final quarter of 2019, Sprint signed multiple new IoT clients that balked the above norms by choosing embedded cellular for their consumer IoT products. In my opinion, these deals signify the beginning of a larger trend that will dominate IoT in 2020. IoT OEMs will no longer default to Bluetooth or WiFi when building a consumer product. Instead, they will conduct a broad analysis of communication protocols to fully understand the advantages and feasibility of each for their solution.

There are a few factors that contribute to the rise of cellular-enabled IoT products for the consumer market:

Cost

In 2019, each Tier 1 cellular network provider deployed a low-power cellular network (NB-IoT and/or CAT-M) and IoT OEMs quickly adopted the protocols for their products. Both the cellular modules and data pricing for NB-IoT and CAT-M are significantly lower than legacy cellular network protocols. With data plans as low as a few dollars a month, IoT OEMs have the flexibility to pass data costs on (or profit by marking them up) directly to the consumer in a monthly subscription fee. You can use an online tool to estimate your cellular data plan (like this one: https://business.sprint.com/curiosity-iot-estimation-tool/).

Rise of the “Subscription-as-a-Service” Era

Consumers are now willing to pay a small monthly fee for continual service. In the past, the obvious appeal of a Bluetooth or WiFi product for the consumer is the one-time upfront hardware payment. Although historically this was the only widely accepted business model, consumers have demonstrated that they are willing to pay a monthly fee for access to entertainment, information, health and security data. The freemium model has become rampant among smartphone applications and “subscription-as-a-service” is an entrenched business model in the consumer market. This makes it much easier for IoT OEMs to pass on the cost of cellular connectivity to the end-user in a monthly subscription charge.

Ease of Use

A cellular-enabled IoT product will work right out-of-the-box. The consumer does not need to bother with device pairing or a WiFi password, creating an excellent unboxing experience for the customer. Additionally, a cellular-enabled IoT product is friendly for the aging population, a significant and ever-growing demographic here in the US, as well as low-income populations that may have limited access to smartphones or in-home WiFi.

Customer Service

Customer service is extremely important to today’s consumers. Thanks to social media and the proliferation of online reviews, negative customer experiences will affect your relationship with potential future customers. Here’s the trouble with consumer IoT products that leverage WiFi and Bluetooth: you have no visibility into their network connectivity. This makes troubleshooting for your customers both time-consuming and difficult to solve. With cellular IoT, you have complete visibility into network connectivity and performance, including each individual data upload and download session, giving your operations teams the ability to quickly diagnose a device’s issue and deliver a great customer experience. No struggling with forgotten WiFi passwords and inconsistent network connectivity. My WiFi went down twice while I was writing this article!

Optimization

With a cellular data management platform, you can analyze trends in how consumers are using your product. R&D teams then have the power to optimize products to meet the needs of those consumers using the product or service, again delivering a superior customer experience and future-proofing the product.

Mobility

The US population is increasingly mobile. It is crucial for consumer IoT products to work anywhere at any time. Ubiquitous connectivity coverage is a must-have for certain consumer products and WiFi specifically simply cannot deliver the consistent service that today’s consumers expect. And yes, we don’t go anywhere without our mobile phones, giving Bluetooth a mobility advantage over WiFi. However, a Bluetooth-enabled IoT product places complete operational dependence on a foreign device and network for products to work. Again, consider the benefits of complete control and visibility into the behavior of a consumer IoT device. We are also seeing a rise in the number of IoT products that use multiple connectivity protocols in a single device to create a near-ubiquitous network (ie. both embedded WiFi and cellular).

5G

It would be remiss not to mention the effect that 5G networks will have on the consumer IoT product market. Although I think it may be a few more years until we see the widespread introduction of consumer products that leverage 5G, it is important to understand that the speed and bandwidth of 5G will challenge home WiFi networks and create and entirely new market of products and services for consumers. 5G will also open the door to new consumer products that require extreme low-latency (think autonomous vehicles and robotics!).

If you are bringing a consumer IoT product to market in 2020 or beyond, consider the advantages of cellular connectivity.