The trend of a wide availability of cost-effective LTE modem chips and mobile carriers' moves to change their business model to offer low-cost bandwidth will allow the public to truly feel the advent of Interent of Things (IoT) by 2018, according to Eran Eshed, co-founder and VP of worldwide sales and marketing of Israeli firm Altair Semiconductor, which specializes in LTE solutions for IoT.
South Korea has one of the highest LTE penetrations in the world and local telcos SK Telecom and KT are planning to deploy an IoT-dedicated network within this year. "Korea is starting to really wake up in the context of IoT," Eshed told ZDNet in an interview in downtown Seoul following his business meeting with local telcos. "We announced together with KT demos for smart meter. There was also the bike-tracking. Whenever the bike moves, it wakes up the IoT module, and the GPS starts tracking."
KT and SK Telecom, as well as Samsung (ARTIK), are selling or handing out IoT modules for customers to toy with. "South Korea is at least a year ahead in some of the other carriers in the world [in committing to IoT], it is an excellent test bed," said Eshed.
Altair gained global notice when it was announced that Sony was acquiring it for $212 million in January.
The Japanese tech tycoon is a world leader in sensors -- the global number one in image sensors -- and said it plans to combine it with the Israeli's LTE modem competence, which could prove an interesting combination for deployment in the IoT.
"Sony has products in their portfolio that are IoT-targeted, such as sensors. Sony has one of the best GPS chipsets in the world. They have wearable SoC. So they were just missing that connectivity so we are in a position to offer that platform, or at least bundle some of components inside the solutions," said Eshed.
"We are already working on integrating this to products. They have some amazing things in development and they will be applicable to IoT. The name of the game won't be branding, but technology in IoT, and Sony has that," he added.
Altair currently offers IoT-optimized chipsets, LTE Categories 1, and plans to offer the lower quality M1 and M2 down the road. "The idea in offering lower Category LTE is to lower power, size, and [make it] cost-effective which will enable something simple and easy to integrate in every 'thing'."
"Offering cost-effective IoT"
The popularity of Altair's competent, cost-effective LTE chipset has to do with the carriers' need for them in the IoT. Because IoT will affect "everything", telcos are pressured to change their business models to offer consumers cheaper connectivity as they cannot charge $50 for every service as they did the smartphone. A business model change must happen, to install cost-effective networks that can offer cheaper connectivity to consumers while being profitable.
You needed to be very "brave and rich" to enter the cellular business because of the qualifications, certifications, and provisions, said Eshed. In the IoT space, most of it will be significantly simplified -- it is going to be much, much easier to integrate these "things".
"Service clients for the carriers were expensive -- you really had to have an application that could sustain paying $10 a month to carriers. But in the IoT space, people talk $1 per month.
"Our forte is providing solution in LTE only. Unlike our competitors that offer fallback to 2G or 3G connectivity, because you need coverage well," he said. "In IoT it's a different situation because of cost. It is just not economical to use 2G and 3G."
In line with cost, in IoT, the importance of slim chipsets is even higher than phones because it must be able to be applicable on anything, anywhere, hence the competitiveness of single model LTE. "There are a bunch of proprietary technologies that were built from the group-up to be IoT-optimized. So they don't carry the baggage of the complex cellular," said the co-founder. "There has never been a wireless technology that succeeds without having a strong ecosystem that is built around standards. In the case of cellular technology, the scale is there."
"Cellular is very secure and it has been proven reliable and used by billions. And standard bodies have a defined special, slimmed down version of this LTE that allows very low cost and small battery," he added. Altair's target is to lower the cost of its solutions as low as $5 from its current $10 to $15.
Once that connectivity is ubiquitous and in the hands of consumers, novel new use of them will appear, such as earphones with LTE modules that allow you to stream music or follow instructions, said the VP.
"There are a bunch of smart people out there. Just put the connectivity in their hands, they will figure out what to do with it. That is what we are trying to do, in a cost-effective way," said Eshed. "It is already happening. There are very cool enterprise applications."
"We have a customer that builds sensors for garbage cans, so waste collection and management. You can plan the route to what you have to empty and when," he said. "Connect to the cloud, and good things will happen."