As the Internet of Things (IoT) market begins maturing, there is enormous interest in the technology that will connect the millions of devices being predicted by analysts. Battery life, coverage, cost, and time-to-market are key considerations and this is where discussions of low-power wide-area (LPWA) cellular technologies are taking center stage as an area poised to see huge growth over the next several years.
Designed specifically for IoT applications, LPWA technologies offer the potential to significantly simplify deployments by enabling low-cost, low-power, and long range connectivity. Current gaps in the wireless connectivity market have resulted in proprietary and standardized LPWA technologies racing to lead as the preferred solution. But which will prevail? At Sierra Wireless, we believe that the technologies that are best positioned for LPWA longevity are standardized and will therefore be able to offer the greater ecosystem support and interoperability, with 3GPP LTE-Machine Type Communications (LTE-M) LPWA technology standing out as a leader.
At its core, LPWA is an access technology for low-power, low-cost IoT devices, transmitting at low speeds, with low data usage per month, with very broad coverage (on the order of five to 10 times the coverage of today's cellular). LPWA technologies represent the industry's response to the growing market need for inexpensive, low-bandwidth connectivity for IoT applications that aren't suited to short-range wireless options like Bluetooth or ZigBee. Beyond wide area coverage, IoT applications also require a simple deployment mechanism that traditional short-range technologies cannot provide, given that they depend on more complex managed local networks, which entails management of security credentials, multi-vendor connections, and quality of connections. Based on a forecast from Strategy Analytics, it is estimated that 3.1 billion LPWA connections will be in place by 2020, with hardware, network and service revenues reaching $9.9 billion.
A wide range of potential applications fit the LPWA profile, including metering, agriculture, vehicle telematics, tracking, healthcare, consumer products, and many others. For these applications, current cellular connectivity offers decent coverage and ease of deployment. At the same time, current cellular technologies are designed for higher-bandwidth applications like mobile broadband. As a result, the modules come with capabilities and data rates that many IoT solutions don't always require.
At the moment, there are no less than seven different LPWA technologies being discussed, in varying stages of development, standardization, and commercial availability. For developers, betting on the wrong one could prove a costly mistake. A recent report from Machina Research predicts that while 2016 will be a critical year in defining the future of LPWA networks and IoT connectivity, increasing fragmentation is likely.
As the dust begins to settle, there is little disagreement on one point: Standardized solutions are invariably more viable long term than proprietary solutions. This is because longevity is a function of ecosystem support much more than technology.
With analysts predicting market growth of LPWA to take off in 2018, LTE-M, which is slated for commercial availability in 2017 with multi-national network deployments in hundreds of countries, is well positioned among the contenders from a timing perspective. While it is true that proprietary LPWA technologies may have less work to do from a go-to-market perspective in the sense that they don't have to do interoperability or certification testing, their ecosystem will be far more limited than the standardized technologies and will take more time to reach broad multi-vendor and worldwide availability.
Many proprietary LPWA technologies, such as SigFox and LoRa, are primarily operating in unlicensed wireless band where quality service is difficult to guarantee. Additionally, some of these LPWA technologies support only very small message sizes (e.g. <20 bytes), which makes it virtually impossible to support standard internet protocols like TCP and UDP, or they only support one-way communications, reducing their viability for many applications. Taken together, one can't help but wonder whether some of these technologies will be viable over the long term and what would happen to customers and vendors if they prove unsustainable and the networks shut down.
Timing it Out
Market timing and solution readiness are, of course, only two of the many forces at play. Cost, power, and coverage are all key factors when it comes to predicting which technologies will have the greatest impact. Because the complexities of all LPWA solutions are similar, costs are much more likely to be influenced by economies of scale. Standardized solutions with worldwide adoption that support a massive ecosystem could make the technology much less expensive than other niche proprietary solutions. The situation is similar for battery life, which is more or less equal for all LPWA solutions. When it comes to battery life, it not only depends on hardware design and operating specifications, but also on coverage, where poor coverage leads to bad battery life. Since LTE-M is designed to be deployed as a software upgraded onto establish LTE cellular network infrastructure, LTE-M devices will be in "good coverage" more often, lowering power consumption and extending battery life compared to new "green field" LPWA deployments with less dense base stations. LTE-M has the advantage of a massive reuse opportunity for cellular network operators building on their existing network infrastructure.
For developers, imagine starting an IoT project - you design a prototype, your source components, you build code, you test, and you find that the product you launch is successful. So successful, in fact, that your sales team is fielding inquiries from markets you hadn't even considered when you were in development. But you find that the LPWA connectivity technology you selected isn't deployed in these new markets areas.
And there's the problem. Your product wasn't designed to work with those networks or under those conditions, or perhaps, you made the wrong connectivity choice. In order to accommodate the new set of requirements, you need to rework your whole design, significantly reducing your return on investment and potentially even forcing you to miss your window of opportunity. One of the ways the challenge can be mitigated is by establishing and using standards. Standardization improves longevity and flexibility – developers can use devices from multiple vendors to customize a solution to meet their specific needs, and as a result, they can be more innovative and more cost-efficient in building their solutions.
No Crystal Ball
While no one can predict the future of the IoT opportunity with certainty, standardization and strong ecosystem support carry less risk in the long term. Standardized solutions like LTE-M are thus well positioned to emerge as the preferred LPWA technology for today and tomorrow's IoT applications, with customers in many industries capitalizing on LPWA technology to seize the IoT opportunity.
About the Author
Olivier Pauzet is the vice president of market strategy at Sierra Wireless. He is responsible for marketing and business development activities to address the different IoT market segments. Olivier has more than 15 years of experience in developing businesses globally in the high tech industry. Prior to his role at Sierra Wireless, Olivier has been managing businesses and strategic programs in Asia Pacific for almost a decade at Wavecom. Olivier started his career at Airbus as a technology consultant in North America. He holds a Master in Electrical Engineering from Supelec, a MBA from Tsinghua University, and a MBA from Insead.