This is not your typical CES blogpost. My experience of CES is not like that of most people. I don’t think I saw a single phone, TV, or pretty much any other consumer electronics product. Maybe that’s not really what the show’s about any more, being broader than that. Or maybe it’s because I spent the whole week camped out in the IoT Infrastructure zone with lots of one-on-one meetings. The fact that it was right next to the micro-mobility section meant I did see quite a lot of e-scooters. And I quite liked the ‘flying car’ that fit in the trunk of an SUV. Although, as Ian Malcolm would say, this smacks of being “so preoccupied with whether or not they could, they didn't stop to think if they should.” Mind you, that applies to most of the technology industry today.
In this blog post I want to talk about what the world of IoT seemed to be talking about at CES 2025. In it I’m entirely guilty of talking about only my own narrow prism of topics. I always go to shows with some specific themes in mind, so it’s something of a self-fulfilling prophecy that those are the themes I talk about. But there’s always a new spin of some sort. And, incidentally, it’s unsurprising that many of them related to topics that we at Transforma Insights suggested as our IoT ‘Transition Topics’ for 2025.
A plug first, for the IoT M2M Council (IMC) which runs a great section of the CES show floor, dedicated to its members, and organises some interviews with leading IoT executives, many of which were hosted by yours truly. Just ahead of the show IMC and the Global Certification Forum (GCF) announced a joint initiative to establish a holistic approach to IoT security/certification considering devices, connectivity, and IoT cloud and application platforms.
This obviously triggered (and I mean that in many senses of the word) discussions at the event. It’s a fantastically ambitious project, seeking to provide a common certification approach for IoT. But it did lead to the inevitable questions about the remit, including considerations of BOM, SBOM, provenance and so on. Much of that becomes highly politicised given the theme of market polarisation, which I discuss further below.
In a very related piece of news, in order to support companies to better understand the relevant regulations, Transforma Insights has made its Regulatory Database, which provides an extensive catalogue of regulations related to AI, IoT, cybersecurity and many other technology areas, available for free to any subscriber to our Essential service. More details on that announcement and how to access the database are here.
If there’s one big theme from the event, it’s this: oiling the wheels. IoT is now at the stage where it’s not about big technology announcements at one end, or evangelising the benefits of remote monitoring at the other. It’s about finding the points of friction inside and addressing them. This takes many forms.
We’ve talked about the concept of meeting the developer where they are when it comes to IoT connectivity, and that is a source of friction. I should note some of the developer-friendly work done by various IoT players. Blues, of course, is one. As is 1NCE, with its developer certification, third party plug-ins and so on. We should note that this particularly applies with some of the functionality delivered by 5G and making that transparent for developers. We recently published a report about the opportunity in 5G; I recommend taking a look.
Another manifestation is in sales processes. Inherently it’s tough to bridge the gap between highly horizontal suppliers (which is the case with most IoT suppliers) and highly vertical buyers. How do you get in front of those buyers. A much more refined targeting and channels strategy is what’s needed. Again, you need to meet the customer where they are.
Back at the beginning of 2023, I wrote a blog post ‘A new taxonomy for the Internet of Things’, which suggested the emergence of a set of service domains separate from the infrastructure used to deliver IoT. Those service domains include many of the areas discussed in this blog post, and many of which have points of friction. Security and compliance I’ve talked about in the previous section. Cloud/edge management relates to the ubiquitous (at least at CES) discussion of AI and the way it’s orchestrated. A bit more on that in the next point.
I want to give a little shout out to Simetric at this point. That is a company which has identified a series of points of friction in IoT and sought to resolve them. For instance, the need for managing devices across multiple networks, and the requirement to integrate IoT data with ERP/CRM.
Even through my narrow prism of focus I couldn’t ignore the way that AI has unsurprisingly dominated much of the narrative at CES. As predicted by just about everyone, AI featured prominently this year. In a way, IoT has long since ceased to be the poster-child for new technology, having been comprehensively replaced by AI in the affections of commentators and investors alike. It was impossible to miss the extensive discussion on the use of AI in pretty much every possible use case. Is there a healthy dose of AI-washing? Yes of course. But we should note that it’s also likely to prove very useful (in about 50% of putative cases). And, in the context of IoT it’s very relevant. That’s the reason why we at Transforma Insights have been focusing so much on AIoT recently including this announcement of the availability of our AIoT forecasts.
Take, for instance, the AI powered collar that will interpret your pet’s behaviour and translate it for you. Is this PetGPT absolutely bonkers? Yes it is. Does it also need connectivity and therefore it’s an IoT device? Again, yes. Is there a question mark over where the data processing and storage happens? Yes, because it could be on the collar, on the smartphone, in the cloud somewhere, or even at an edge location if low latency is important for you. In the latter case, if your dog wants to communication that someone is trapped down a well, time is of the essence!
Do I think that such a product will trouble our forecasts much? I do not. It is, however, illustrative of the type of dynamics associated with AIoT. It reflects the increasing overlap of AI and IoT, both in terms of enhancing IoT with AI (AIoT), the use of IoT as a data source for AI, and the requirement for orchestrating the location of workloads. Whatever way you look at it, AI and IoT are bedfellows. That’s why those topics of AIoT and AI orchestration were in our list of ‘Transition Topics’ for 2025. Those themes are starting to bleed into the IoT discussion, particularly in terms of hardware makers looking to position their offerings as being AI-friendly.
As a manifestation of IoT no longer being the poster child for technology any more, CES was bookended by a couple of announcements that caught the eye. Firstly, that Software AG had sold its Cumulocity IoT platform business, although it’s not yet clear to whom [Update: it's a PE-back management buy out]. Secondly that u-blox was shuttering its cellular modules business.
The Cumulocity news had been widely anticipated with owner SilverLake having divested several other assets in the recent past. So it really shouldn’t be much of a surprise. And, in isolation, these things happen.
The u-blox story is a different one though. The news that it would dispose of its cellular module business has been expected for a while. It has always lacked the scale of its peers and the margins of its non-cellular business, so the writing has been on the wall. What’s slightly surprising is that it hasn’t found a buyer and is instead intending to phase out the business. There’s obviously not that much interest from its peers in bulking up, or not enough cash available to make it interesting for u-blox. And unsurprising that it couldn’t find a company from outside of the space to leap into cellular modules. Oh for a Semtech to ride to the rescue!
Another interesting thing is that this is happening just at the time when we expect non-Chinese vendors to see a significant bump in sales. But the u-blox management will no doubt have taken account of that and concluded that it wouldn’t be enough. The revenue and EBIT figures in the press release are quite sobering and it would take quite a dramatic increase in sales to turn things around.
Is this symptomatic of a deeper malaise? Doubtful. I regularly hear the death-knell sounded for IoT. “IoT is dead” they cry. To which I respond “which part?”. Is it smart metering, which went from 100 million connections in 2010 to 1.7 billion in 2023? Or the 800 million+ connected cars in the world, up from a tiny fraction of that a decade ago? Or all the lives saved or improved by connected heart rate monitors or sleep apnoea devices? I could go on. IoT is fine, it’s just that no-one apart from insiders calls it that. And, I should note, it’s a tough business that isn’t as scalable as some might have hoped. The key is contextualisation.
Considering these specific announcements, we should note that Software AG is shedding everything, so this isn’t an IoT-specific issue. And as for u-blox, the module business has been painful for a long time; M&A, as well as market exits, have been rife over the years. What it is illustrative of is a cut-throat market for hardware. Western vendors of all types have been struggling to compete with Quectel for many years.
And speaking of Chinese vendors, there was, unsurprisingly, continued discussion at CES of the potential implications of recent regulatory decisions in the US as well as the approach of the incoming regime. The US, and parts of Europe too, will become a much less fertile playground for Chinese hardware vendors in the next couple of years. It’s for this reason that market polarisation featured as one of our aforementioned IoT Transition Topics. This will run and run.
During CES week, Quectel issued a rebuttal (note to commentators: learn the difference between rebut and refute) related to its inclusion on the US Department of Defense’s 1260H list of Chinese military companies. While in most cases this does not represent a strict prohibition on selling products into the US, it does prohibit sale to the US military and potentially leads to higher compliance costs, and may be subject to even greater restrictions in future.
In an announcement just last week, the outgoing Biden Administration also prohibited the sale of connected car hardware and software from companies with ties to China or Russia. It comes into effect over the next few years. This appears to apply to aftermarket devices as well as embedded factory-fit systems.
We also heard of several examples of executives from some Chinese companies not getting visas for CES. Of course I don’t know the details of the individuals concerned, but it is symptomatic perhaps of the increased friction Chinese companies will face.
Back in November, Qualcomm unveiled some pretty aggressive targets for its IoT business. And it’s clear that it sees it as its growth opportunity and is prepared to put a lot of impetus behind getting that market going. And it was showcasing quite a bit of it at CES.
First thought with Qualcomm is always hardware related and it has ramped up its IoT-focused hardware offering, with the IQ Series, which was introduced in October, and with more of a focus on the low-end of cellular IoT with the acquisition of Sequans’ 4G IoT assets.
It has also been increasingly busy in the verticals and nurturing the whole IoT ecosystem. A large part of its vertical ambition is focused on the automotive sector and particularly the Snapdragon Digital Chassis solutions. And Qualcomm has also engaged in a set of vertical initiatives to accelerate adoption of IoT in certain verticals, such as a collaboration with Toshiba in retail. And see also its collaboration with Trimble to support the logistics space with the Snapdragon chip. And, furthermore, the Qualcomm Aware platform, which was launched two years ago, has also had a refresh. Aware is a horizontal platform, comprising device management, positioning, asset management, APIs, and ERP integration. There is also a set of devices, such as trackers.
One of the most interesting developments in cellular-based IoT is the imminent arrival of SGP.32 and approaches to eSIM and remote SIM provisioning. In that context it was good to chat to some of the companies that are really embracing the role of ‘eSIM orchestrator’ such as Simplex and Teal. For more on that topic, check out the blog post: ‘SGP.32, regulation, and new dynamics in IoT middleware will trigger a shift in IoT connectivity’. Teal itself announced the launch of its OpenEIM initiative at the show.
One of the main topics I aimed to discuss while I was at CES was satellite connectivity. We have covered it in quite some detail in the past but it is well worth doing a refresh on the theme, and we have a report in the works which will be out next month, all being well. So I went out deliberately with the aim of speaking to the likes of Globalstar, OQ Technology and Skylo, and crossed paths with several others too. Inevitably, therefore, satellite connectivity was one of the key topics I discussed. Satellite IoT is0 a technology area which is very much evolving to new approaches. Release 17 NTN via LEO satellites will be a reality soon, there’s potential disruption from Starlink and other broadband satellite providers, hybrid cellular-satellite offerings are coming through, there’s licensing to be resolved, approaches to wholesale business models to be determined, and unanswered questions about the economics of LEOs.
There were no particular announcements or revelations, just a segment of IoT connectivity that is on the cusp of quite a pronounced change.
I’ve mentioned several times about out IoT ‘Transition Topics’ for 2025. The fact is that CES 2025 demonstrated the extent to which there is a series of transitions happening. From IoT to AIoT, from free-for-all to compliant and certified, from siloed to integrated, from horizontal to vertical, from global to national, and many more. This will be an interesting year, no doubt.
