Analysys Mason’s Predictions for IoT in 2018

Analysys Mason’s Predictions for IoT in 2018

Analysys Mason’s Predictions for IoT in 2018

By Tom Rebbeck, Michele Mackenzie and Ahmed Ali at Analysys Mason.

Investments in NB-IoT, LTE-M and new capabilities prepare operators for an active 2018…

Operator revenue and connection numbers for IoT continue to grow – annual growth rates of around 20% are typical. However, the billion-dollar acquisitions or contract wins of previous years have been absent in 2017. That said, telecoms operators have been building out IoT connectivity networks (NB-IoT and LTE-M in particular), adding capabilities (such as application and device management platforms) and working with the broader ecosystem (including developers, cloud players and hardware vendors). All of which should set the market up for an active 2018.

In this article, Analysys Mason’s analysts and consultants outline our expectations for IoT in 2018.

Network technologies

  • Operators in China will continue to lead in NB-IoT in 2018. China is the leading country for NB-IoT because all three Chinese mobile operators are building NB-IoT networks and government support for the technology is strong. We expect that lead to grow in 2018, and probably some large contract announcements (1 million connections plus). The USA will continue to be the leading country for LTE-M developments thanks to AT&T and Verizon’s investments; large contract announcements are less likely though.
  • Operators will launch NB-IoT and LTE-M (not NB-IoT or LTE-M). Verizon will launch NB-IoT in 2018, complementing its LTE-M network. Telia has also publicly committed to both technologies, as have several other operators. With the incremental cost of upgrading from one standard to both being relatively small (perhaps only an extra 10-20% to do both technologies, rather than just one), for many operators, the question will be which technology to prioritise, and when to launch, rather than selecting only one of the technologies.
  • 2018 will be a crucial year for the battle between cellular vehicle-to-everything (C-V2X) and 802.11p technology. The telecoms industry will increase the pace of development of C-V2X technology. Much attention will be on the European Commission and whether it decides to mandate V2X. A decision either way could have a significant impact on the success of either the LTE-derived C-V2X technology or the 802.11p standard.

Consumer IoT

  • Will the next Apple Watch use LTE-M? The next generation of the Apple Watch could use LTE-M. This is a stretch given the status of the technology at the end of 2017, but LTE-M will support voice and streaming music (arguably a more important use case than voice) and uses lower-cost modules and, crucially, provides better battery life. In many countries, at least one operator will support LTE-M by mid-2018. An Apple Watch on LTE-M is not likely in 2018, but it is possible.
  • The Kindle 3G model will be applied to consumer IoT. Vodafone launched ‘V by Vodafone’ in 2017, but the four consumer IoT products come with a monthly EUR3–4 subscription fee, a big detractor for many potential customers. Amazon bundles the cost of connectivity into the upfront cost of the Kindle 3G and we expect other consumer IoT device providers to follow Amazon’s example in 2018.

Enterprise IoT

  • Further M&A of edge analytics and industrial IoT (IIoT) firms. There was significant investment in on industrial IoT and smart manufacturing in 2017. Start-ups like FogHorn and ForgeRock have secured large investments while established companies such as Apple and GE are collaborating on solution development. Platform providers will build on this growth and will acquire or develop features for the IIoT in 2018.

Global connectivity

  • IoT MVNOs will continue to surprise. In 2017, some relatively small IoT MVNOs won notable contracts with large automobile manufacturers to provide in-car connectivity (for example, Globetouch’s contract with GM; Truphone’s with Kia, as well as the continuing relationship between Cubic and Audi). We expect more of these types of contracts to be awarded in 2018, and for this trend to increasingly become a concern for larger MNOs. M&A deals are possible, either between smaller MVNOs or with MNOs buying up their smaller rivals; with more than 20 firms offering global IoT connectivity, the market is ripe for consolidation.

Asia–Pacific

  • Operators in emerging Asia-Pacific will accelerate their IoT businesses. China is at the forefront of IoT developments, but many operators in emerging Asian markets have been slow to develop their IoT propositions. This is set to change; regional operators are investing in building IoT connectivity and data management platforms mostly through vendor partnerships. Regulatory developments in automotive and electric vehicles as well as in government-led smart city and smart energy initiatives will start to yield tangible opportunities. We expect the total number of IoT connections in the region to grow by 24% in 2018.

Data protection

  • The European General Data Protection Regulation (GDPR) will create opportunities for operators. Companies operating in Europe need to be GDPR-compliant by May 2018. GDPR will present opportunities for operators to help enterprise customers, especially SMEs, to ensure that all devices including IoT devices comply with the regulation. Connectivity and device management platforms will continue to play an important role in helping clients achieve compliance. Operators such as Deutsche Telekom, Telefónica and Vodafone with cyber-security business units and a good understanding of the issues will be well placed to advise enterprises on complying with GDPR for IoT initiatives.

The post Analysys Mason’s Predictions for IoT in 2018 appeared first on IoT Business News.

IoT Business News

Analysys Mason’s IoT platform contracts tracker: Actility is winning a high share of telco deals

Analysys Mason's IoT platform contracts tracker: Actility is winning a high share of telco deals

By Ahmed Ali, Senior Analyst at Analysys Mason.

Operators and vendors are keeping a close watch on contracts for IoT solutions. Analysys Mason has gathered the details of 280 deals in our recently published IoT platform contracts tracker*. The key trends we have identified in this data are as follows.

  • Vendors have an opportunity to do deals with large operators, but solutions need to be targeted (for example, towards specific vertical markets) or differentiated from those of established vendors. Big advanced operators, such as AT&T and Vodafone, have already signed deals for solutions across the value chain.
  • Smaller operators (such as Telecom Italia and TELUS) have suppliers for connectivity management but will need support if they are to compete in other aspects of the value chain (for example, data management and application enablement).
  • The market is relatively mature – a few vendors are dominating each section of the market. For example, Cisco Jasper, Ericsson and Vodafone have won around two-thirds of the publicly announced contracts for connectivity management. Cumulocity and PTC/ThingWorx have won around half the contracts for application enablement.
  • Established telecoms vendors are offering solutions that are close to connectivity, but new vendors have opportunities in this area – for example, Actility has taken a strong position in the low-power, wide-area (LPWA) network space.

Our analysis reveals that AT&T, Deutsche Telekom, SoftBank and Vodafone are well advanced with their IoT solutions

The IoT software stack has components that can be grouped into three basic layers:

  • connectivity management
  • device and data management
  • application enablement.

Figure 1 : Operators’ IoT deals and selected examples, 2Q 2017

Anaysys Mason : IoT platform contracts tracker table

The number of publicly announced contracts tells us how advanced each operator is in developing its IoT solution. The operators with the lowest number of deals (categories 3 and 4) are generally at early stages of their IoT roadmaps and are looking to enable connectivity and device management capabilities. These are mainly operators in regions where IoT markets are relatively underdeveloped and the drivers to invest in IoT platform features beyond those of basic management are few. On the other hand, operators with multiple platform deployments (categories 1 and 2), such as AT&T, Deutsche Telekom and Vodafone, are more advanced with respect to their IoT roadmaps and operations are competing in more demanding markets. These operators continue to tighten their control over the IoT network with multiple connectivity and device management platforms while exploring different monetisation approaches and use cases through application enablement platforms.

Actility is one of a small number of start-ups to win a significant number of contracts

The tracker also tells us which vendors are most successful. Vendors with the highest number of deals are Cisco Jasper (60 contracts), Ericsson (21), Gemalto (26) and Vodafone (31, of which 7 are for third parties). All these vendors provide connectivity management tools primarily. Actility is one of the few start-ups that has managed to capture a new opportunity in the connectivity market by enabling LPWA networks, while established vendors continue to deliver cellular management solutions.

Cumulocity and PTC have the highest number of application enablement platform deals. However, telecoms vendors are absent from this market despite having launched similar solutions. For example, Nokia introduced its IMPACT platform but is yet to announce any public deployments. Huawei, NEC and ZTE have a limited number of public deals, which are mainly for connectivity and device management solutions. Cloud and business solution providers such as AWS, IBM and Microsoft Azure are also not high on the operators’ supplier list for IoT but they offer cloud-hosting solutions.

As operators gain strength in the IoT market, their IoT goals shift from providing basic coverage to improving the quality and range of services. Tracking these goals and how they change will help platform vendors understand and optimise their solutions to meet the operators’ varying requirements.

*Analysys Mason’s new IoT platform contracts tracker focuses on operators’ deployments and lists the public contracts that they have with platform and middleware providers. It includes more than 70 operator groups and 50 IoT vendors, and covers deals in 95 countries across 8 regions. It also highlights the main features of the deployed solutions. In total, it covers 280 deals. We have analysed the contracts between operators and vendors to assess where most of the activity is happening (see Figure 1). Vendors are categorised based on their main features, and operators are categorised based on the number of IoT platforms that they have implemented.

The post Analysys Mason’s IoT platform contracts tracker: Actility is winning a high share of telco deals appeared first on IoT Business News.

IoT Business News