Analyst estimates for IoT and the potential value of the market are ever bullish, yet much of the conversation in the mainstream media still revolves around connected fridges, robots and kettles: is it time to make the world sit up and take notice?
A swift look around industry forecasts show a vision of exploding device demand and warnings operators need to be prepared for the next generation of consumer devices.
However, although the technology looks ready to go, the number of operators offering IoT devices direct to consumers and backing that belief up with a strong marketing push remains relatively low.
This, though, may be beginning to change.
In November, Vodafone Group announced V by Vodafone where existing customers can add IoT device connectivity to their subscriptions for an extra £3 to £4 per month/device as well as an upfront charge.
Existing UK customers will have to pay £50 for a pet tracker, £80 for a connected car device, £59 for a luggage tag and an eye-watering £339 for a mobile camera.
At the end of its fiscal Q2 – for the three months to end-September – Vodafone’s UK ARPU was £18.50. Adding just one device would represent a 20 per cent boost to the average monthly bill, plus the company will likely make a margin on the initial device sale.
Vodafone is far from the first European operator to release consumer IoT products. Indeed, a connected luggage tag not dissimilar to the Vodafone product was released by Telefonica – running on 3G – in 2015.
Although not the first to dip its toe in the water, V by Vodafone represents a major European operator group making its first strong bid for a slice of the consumer IoT market backed with a marketing punch and a single brand covering all devices.
While Vodafone has gone for an entire ecosystem launch, others have opted to use fixed assets to target more specialist markets.
During October, Deutsche Telekom’s head of new business, sales and marketing for connected home Matthias Mieves told Mobile World Live (MWL) the company viewed the sector as the fourth strand of its quadplay strategy after fixed, mobile and TV.
As with the Vodafone model, Deutsche Telekom sells the connectivity and devices from security cameras to speaker systems. The operator sees the addition of smart home appliances as a solid defensive move against device providers getting into their customer’s homes and eventually eroding the base.
Orange, on the other hand, focuses on providing content and entertainment oriented devices rather than utility products. In November, the company launched its latest VR headset alongside a new drone and mobile camera. Its range runs over Wi-Fi and at least one branded device is sold across the majority of its international markets.
During the first part of the year it also developed a digital artificial intelligence (AI) proposition to tie-in with its TV box.
Bengt Nordstrom, CEO of analyst company Northstream, told MWL other operators would be carefully monitoring the success of Vodafone’s model.
He added a mixture of improvements in battery life, networks and consumer awareness of new technology meant the time could be right for a serious consumer IoT push from many of the world’s largest operators.
“Until now we’ve not had the right device or module performance to do things like this,” he said: “Technically it has been possible for some time, but [the problem has] been about the price point and battery life of devices. It’s coming because we can now meet the technical requirements.”
“Overall the [wireless] industry is at a stage where it is showing every sign of being a mature industry, it’s not growing any longer so every operator on earth has their business development teams working on new revenue opportunities. IoT is one of those key areas, so consumer IoT wrapping like this one will be very interesting to follow.”
Vodafone plans to expand its IoT range under the V by Vodafone brand in 2018 and it will be fascinating to see what the new devices are and how well received the first batch is. A launch in Q3 was a shrewd move given the price point of items such as the pet tracker, making it a potential Christmas gift.
If it proves to be a runaway success not only will rivals have to sit up and take note, but perhaps we’ll start seeing mainstream headlines about consumer IoT which aren’t just related to connected fridges ordering milk.
The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.