The CEO of US M2M player Novatel Wireless, Alex Mashinsky, believes a perceived slowdown in IoT (Internet of Things) growth represents a disconnect between industry projections and reality, but conceded that the segment continues to struggle with scale.

Mashinsky’s comments come after Ericsson appeared to backtrack last month on its well-publicised vision that 50 billion devices will be connected by 2020. The company has now forecast a revised figure of 26 billion in its latest Mobility report, which it said was “based on thorough analysis”.

Mashinsky is embarking on an aggressive M&A strategy based around IoT after joining as CEO in November last year, following an approach by the company’s board.

Earlier this year, Novatel acquired wireless IoT operator Feeney Wireless, and followed it up by adding South Africa-based M2M and Telematics provider Digicore to its portfolio this month.

Mashinsky, who founded both Transit Wireless and metro provider Arbinet before joining Novatel, told Mobile World Live “there’s been a real struggle with IoT and it’s definitely not scaled in the way everyone had predicted”.

He added that the disconnect between predictions and what is actually going in the IoT space has been around for years.

“The cost of wireless devices continues to drop very rapidly, while the cost of wireless networks isn’t dropping as fast,” he said. “This is the same for the hardware and the cloud, which is decreasing in cost faster than airtime. The airtime is still the most expensive piece in the life of the device.”

Cost
Mashinsky believes the cost of a “device talking to a network”, which represents a significant airtime issue, is “the biggest blocking element to getting to that 50 billion device mark”.

Novatel Wireless is now working to develop solutions based on integrating software, hardware and airtime for IoT, and he is also collaborating with operators on specifications to get these solutions deployed.

“For operators to grow in this space, they need to offer their subscribers something more,” he said. “Their users have always been interested in IoT, but they can’t just show up, offer them a box and SIM card and integrate it with software.”

He believes operators need to focus on offering more intelligence to their IoT solutions, starting with big data and analytics services for both corporate and personal customers.

“The companies that will thrive in the IoT space are those that solve all these elements, put it together and make it simple,” he said. “IoT is, however, a vertical of 10,000 things and an operator won’t be able to do it all.”