AT&T is one of the few mobile operators to start to talk about the potential revenues that might be generated by the embedded mobile market. Ralph de la Vega, President and CEO of AT&T Mobility and Consumer Markets, said at the CTIA show this week that emerging devices, such as e-readers, connected health monitors and connected tracking devices, could become a billion dollar business for AT&T, according to Dow Jones Newswires.
Although de la Vega cautioned that emerging devices won’t have a significant short-term impact on AT&T’s financial numbers, the giant U.S. operator is gaining momentum in this new market. Posting its annual results in January, AT&T said that it saw more than one million “emerging devices”, including e-readers such as the Amazon Kindle, the Sony Reader Daily Edition and the Barnes & Noble nook, connect to its wireless network in the fourth quarter of 2009.
AT&T’s belief in this new market is also evident in its sophisticated web site aimed specifically at companies and individuals wanting to launch new consumer or industrial devices that make use of AT&T’s wireless networks. The site includes step-by-step advice and information on how to approach this market and work with AT&T. It even features a “module matching tool” to help a potential partner choose the right mobile modem for a particular device and application.
As cost-effective as WiFi?
So, what does AT&T believe needs to be done to enable the embedded mobile market to realize its potential? “The industry needs to drive very hard to get the cost of modules down,” says Glenn Lurie, President of Emerging Devices at AT&T in an interview. “A WiFi module is now $5, but a fully-integrated 3G module with international bands is not $5. We have to get those prices down as hard as we can, so we have got to find the volume plays so that we can go to Qualcomm, Ericsson or another module supplier and order millions of modules for a low price. That would really make it explode.”
Lurie also believes that start-ups are key to unlocking the full potential of the embedded mobile market. “In handset apps, Apple has shown how small start-ups can take a SDK and innovate,” he says. “That phenomenon is now overflowing to the iPad and other emerging devices.”
An open door
Lurie, a former professional soccer player, has adopted an open-door policy to encourage people with ideas to come and talk to AT&T. “We are talking to everyone from 100 billion dollar companies to two-person holdings just wanting to chat,” he says. “We respond to every email. We talk to everybody. Our philosophy is that we are going to be very respectful and listen to anybody’s and everybody’s ideas. That is how we found Isabella.” (Isabella Products and AT&T have launched Vizit, an interactive, touch-screen digital photo frame, which can upload pictures to a printer or a social networking site, as well as being able to receive photos via MMS or email.)
Lurie sees m-health and m-wellness devices, as well as slate-style computers, as two of the hottest areas in the embedded mobile space. “There is potentially strong demand for devices with mobile connectivity that will register when a patient has taken a pill,” he says. “Everybody in the wellness ecosystem from the patient to the patient’s family to the healthcare provider to the pharmaceutical company would benefit from that.”
“I am also a big believer in tracking – we will have a GPS device and mobile modem in anything you want to keep track of, from your dog to your car to your kids,” Lurie adds. “The day is coming very quickly when it will all be vertically integrated into a web site, where you can keep track of everything that is valuable to you.”
While the growing political pressure to cut greenhouse gas emissions has drawn attention to the potential to use mobile connectivity to make industries and buildings more energy efficient, AT&T is clearly very optimistic about the consumer electronics market.
The success of the Amazon Kindle in the U.S. suggests that optimism is probably justified. Kindle owners pay a premium for the convenience and simplicity of downloading e-books over a mobile network, rather than sideloading them from a PC. Why wouldn’t Americans also pay a premium for convenient and simple devices that monitor their health or exchange photos with relatives?