Design, not price, will drive 2019 adoption of cellular IoT, says Nordic Semiconductor
The adoption of cellular internet-of-things (IoT) technologies is not being slowed by the high price of chipsets, but by the complexity of their design, reckons chip supplier Nordic Semiconductor.
Module design is the ultimate barrier to adoption of licensed low-power wider-area (LPWA) technologies like narrowband IoT (NB-IoT) and LTE category ‘M1’ (LTE-M), said Svein-Egil Nielsenm chief technology officer at Nordic Semiconductor. Equally, issues with coverage and reliability hinder the wider take-up of unlicensed proprietary LPWA technologies like LoRa and Sigfox, he said.
“If there’s a reason cellular and proprietary wireless IoT hasn’t really picked up in a big way – and by that, I mean billions-of-installed-units worldwide – it’s not that the modules are too expensive – it’s that the existing solutions can be very hard to design-in and too often don’t work very well,” said Nielsen.
“It doesn’t matter what the unit price of a wireless IoT module is if it doesn’t work very well. To successfully go to market, an IoT product or application needs to be working well enough that you don’t get a one-star customer rating on Amazon. That means it has to work reliably on a network in any major city in the world.”
The industry narrative about the falling pricing of IoT chipsets – as LTE-M modules have fallen below $10 per unit from AT&T and Verizon, and below $1 per unit with Sigfox – is misleading, he said. The cellular IoT market will not reach doubling targets of 3.5 billion units by 2023 by joining a race-to-the-bottom, said Neilsen.
“Everybody is hung-up on this $10 per-module price as if it’s some ‘make-or-break’ point for cellular IoT. It’s not important whether a wireless IoT module is priced at $15, $10, $7.50, $5 or $1 per unit. That’s not what’s driving adoption,” said Nielsen.
“The main problem in cellular is the modules are currently too complex to design-in and offer a limited feature set. The problem in proprietary is there are too many concerns about network coverage and reliability combined with being caught in a monopolistic-single-supplier trap that stifles competition and innovation.”
But Nielsen said 2019 will be the year “cellular IoT finally arrives in a big way,” with US operators embracing a twin LPWA strategy covering LTE-M and NB-IoT. He said these technologies will dominate new IoT deployments, despite the early march LoRa and Sigfox have stolen in terms of their publicly announced design-wins and their per-module pricing.
Proprietary technologies tend to succeed in the absence of a decent standard, he noted, citing his company’s pre-Bluetooth Low Energy proprietary 2.4GHz wireless chips as an example. But the rollout of LTE-M and NB-IoT in most international markets makes clear the standardisation and developing scale of cellular IoT.
If any part of the cellular IoT supply chain is trailing behind, it’s not the world’s cellular network operators, he said, but its module and chipset suppliers.
“The network operators couldn’t be doing more to pave the way for cellular IoT. So much so that while it initially looked, for example, like the US was going to going down the LTE Cat M1 route and China the NB-IoT path, pretty much all major networks are doubling-down and rolling-out support for both cellular IoT technologies.
“This is, I suspect, partially technical as NB-IoT has a longer range that will help penetrate hard-to-reach areas such as underground car parks [with the tradeoff being lower data throughput compared to LTE Cat M1]. But it’s also commercial as it allows network operators to cover as many potential customer and application bases as possible.”
Nordic Semiconductor will release a cellular IoT module, the nRF91 Series, this year that is “dramatically easier to design-in than anything currently available.”
The rate of growth of LPWA network connections will outpace their unlicensed equivalents as the LPWA market swells by 53 per cent per year over the next five years, according to recent estimates by ABI research. By 2023, NB-IoT and LTE-M will capture more than 55 per cent of LPWA connections, as Sigfox and LoRa cede market share dominance for the first time.
Unlicensed networks, mostly based on Sigfox and LoRaWAN, make up two-thirds of LPWA networks today, according to a separate study. A third of the total network deployments are geared towards smart city applications.