By Svein-Egil Nielsen, CTO, Nordic Semiconductor
The conventional cellular sector comprises a few giant semiconductor companies selling to a few giant smartphone companies. And it’s a consolidated business model that works extremely well for smartphone consumers. They get to continuously benefit from both vast cost-cutting economies of scale, and a ferocious performance and features competition between the smartphone manufacturers themselves.
The end game is to entice consumers to buy smartphones in their hundreds of millions of units a year in return for being given the ability to do pretty much anything a traditional desktop computer can do from the palm of their hands, wherever and whenever they like.
But a few giants selling to a few giants’ business model is also one that is not necessarily focused on startups and smaller companies. Quite understandably, the focus shifts to ploughing everything into keeping those few giant accounts happy, even if it means stationing large technical support teams permanently at customer locations.
And that’s a business model that Nordic Semiconductor—as a major developer and pioneer of the low power, low data rate LTE-M and NB-IoT cellular modems that sit at the heart of cellular IoT—thinks will be turned on its head when it comes to latest IoT version of cellular. Yes, there will undoubtedly be some major multinational giants looking to apply cellular IoT to optimize large-scale operations. But we at Nordic see a defining feature of the cellular IoT market as it coming to be dominated a large number of smaller, highly innovative IoT companies and startups. And servicing the demands of a large number of small companies is very different to servicing the demands of a small number of giant ones.
Cellular IoT is, as the name suggests, is designed to leverage the world’s existing global cellular infrastructure to help enable long distance wireless comms in IoT applications. In particular, the battery-powered data-gathering sensors that sit at the heart of the IoT.
These will typically measure and monitor one or more parameters continuously, and periodically ‘report in’ to some kind of cloud server either a status update or an alarm if they detect something is falling, or has fallen, outside of a specified normal operating range.
Such applications and products tend to be low-data-rate and predominantly wireless. And prior to the arrival of cellular IoT were dominated by innovative, entrepreneurial firms using low power wireless technologies such as Bluetooth LE, Thread, and Zigbee. These, and many new companies, are now looking to apply cellular IoT to either complement their existing IoT products or build completely new ones with global connectivity.
As such, I don’t see the cellular IoT chip market differing that significantly from ultra-low power wireless market that preceded it in the IoT space. In fact, the cellular IoT market is likely to have far more in common with the traditional Bluetooth and ultra-low power wireless semiconductor markets than the traditional cellular smartphone market.
And this means a market that is dominated by smaller companies and startups. And these companies need all the technical support they can get when it comes to getting their heads around the technology and what’s required to successfully bring a new LTE-M or NB-IoT product to market.
Because the technology can be tricky to handle, providing critical technical backup and access to engineering expertise is a key part of Nordic’s customer strategy. We helped enable the rapid adoption of Bluetooth LE early in this decade by abstracting away all unnecessary technical complexity so developers could focus on their application instead of the intricacies of RF technology.
As such, when Nordic started to develop a low power cellular IoT modem we quickly realized that what our customers in the cellular IoT space were going to need was exactly the same approach. And that’s precisely what is delivered by our multi-mode LTE-M/NB-IoT/GPS nRF9160 System-in-Package (SiP) and associated development kit. In contrast, in my opinion, competing solutions assume too high-a-degree of cellular expertise from developers.
An alarming case study
A good example of a pioneering cellular IoT OEM company is Swedish startup, Minut. The firm recently developed a battery-powered all-in-one LTE-M smart home alarm. The alarm employs a Nordic nRF9160 SiP to provide LTE-M wireless connectivity sending instant alerts to a user’s smartphone no matter where they are in the world. In keeping with many of Nordic’s new cellular IoT customers, Minut’s earlier products were based on Wi-Fi and Bluetooth LE.
According to Fredrik Ahlberg, Head of Research & Co-Founder at Minut, the company selected the nRF9160 SiP because of its market-leading low power consumption and highly integrated size. The company was able to achieve a battery-life of around six months using a small, internal battery that can be recharged via a USB-C cable. But perhaps more importantly, Ahlberg also praised the speed and quality of Nordic’s technical support which he says enabled the company to commercialize its first cellular-enabled product very quickly.
The key to success for chipmakers in the cellular IoT market, therefore, will not be a focus on selling to a few big customers. The focus will need to be on supporting all companies working with the technology regardless of whether they be small, medium, or large. Every customer must be taken seriously and given as much technical support as they need to generate precious early sales and grow their business at a critical stage.
And finally, what must also not be overlooked is the growing overlap between long-range, low-power cellular IoT; and short-range, ultra-low power wireless technologies such as Bluetooth LE, Thread, and Zigbee. In many IoT applications a combination of these wireless technologies will be required to collect all the necessary data in a technologically and commercially viable way. The game changer with adding cellular IoT into the wireless IoT mix, however, is that for the first time it supports standalone IoT devices and applications that don’t require some kind of gateway to the cloud in order to operate anywhere in the world.
And that opens up a whole new world of IoT opportunities to a whole new world of innovative IoT companies and their products and applications. What will be certain, however, is that the number of these companies will not be small, nor will the diversity of the products and applications they will be developing. Welcome to the new world in cellular, welcome to cellular IoT.