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6 reasons why device/connectivity bundling makes sense for cellular-based IoT

JUL 11, 2023 | Matt Hatton
region: ALL vertical: ALL Internet of ThingsHyperconnectivity

In June 2023 Transforma Insights published a free white paper in collaboration with Telit Cinterion entitled ‘The Internet of Things can only be delivered as a managed service’ which looked at some of the changing dynamics in the IoT connectivity landscape. One key finding of the report was that the number of IoT connections sold bundled with devices will more than triple from 30 million in 2022 to over 100 million in 2025. In this blog post we examine the 6 key reasons why hardware (in the form of modules and gateways) and cellular connectivity might be natural bedfellows.


1. Operational

There is a problem in IoT with providers of the various constituent parts of an application blaming each other in the event of a problem. Having one organisation responsible for combined fault resolution helps remove some of the friction in deployments. This is particularly the case in complex multi-country deployments involving roaming, IMSI localisation, different data sovereignty rules and so forth.

2. Competitive

There is an increasing recognition that participation in developing devices puts a provider in pole position for early consideration in the process of IoT solution or product development. The addition of connectivity and even software platforms will typically come later in the process. Adopters will think first of how they integrate connectivity in their offering before almost any other considerations, critical as it is to the form factor of the end device. Involvement in devices ensures that a vendor is considered earlier in the process, so providers of other aspects of IoT will benefit from adding a consistent device aspect to their offering.

3. Commercial

The vendor of either connectivity or hardware can offer more appealing commercial terms due to offering both elements. It is not inherently cheaper to provide both; however, the provider of both is better able to offer a broader set of commercial options, for instance, offering the hardware for free upfront and loading the cost into the connectivity recurring charges. Or vice versa, should the buyer prefer a CAPEX-based model to include prepaid connectivity for a particular duration or volume of data within the one-off hardware cost.

4. Technical

There are also, of course, technical advantages. The one provider can ensure that all the required design, testing and certification take account of both the device and connectivity.

5. Contextual

A vendor of a combined solution can incorporate all client requirements in the design. As one example, the provider can advise more intelligently about the choice of network technologies to ensure that not only will the options meet the technical specifications of the deployment but will also be compatible with the connectivity requirements based on countries or operators. A 2G or 3G solution may meet the technical needs of the solution, but many countries have already switched off those technologies and replacing them with emerging NB-IoT and LTE-M networks is patchy today.

6. Form factor

There is a final category related to form factor. Specifically, the move to eSIM and iSIM is having an impact here. Historically, the management of the connectivity profile on the device was handled by switching in and out a physical SIM card. With the move to remote SIM provisioning (RSP), this is now a much more flexible exercise. Each device ships with embedded connectivity options, meaning that any hardware vendor needs to decide which 'bootstrap' identity the device might ship with. Like it or not, hardware vendors need to make choices about embedding connectivity, and connectivity vendors would be well advised to work with hardware makers to have their profiles ship with the devices.

About the White Paper

The blog post above outlines the key messages in the free White Paper from Transforma Insights and sponsored by Telit Cinterion. It is available to download here: ‘The Internet of Things can only be delivered as a managed service’. The White Paper starts by exploring why there is greater demand amongst IoT buyers for more managed services, and then examines the growing demand for cross-optimisation of the elements of the IoT stack, before examining the reasons why hardware/connectivity bundling is on the rise. It finishes by summarising changes in the supplier ecosystem with the emergence of a new IoT Taxonomy and identifying how all these evolutions might affect an enterprise’s decision making process in vendor selection.

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