2023 in Review: Connectivity Dominates but IoT-system Gaps Remain

Two investment themes bookended 2023. In January, the European Union backed a $100m venture capital fund, managed by Momenta Partners. In December, Softbank announced its EUR473m ($514m) investment for a 51% stake in Cubic Telecom. This development more than drew the eye as
exemplified by the analyst commentary around the high (16x) revenue to implied enterprise value multiple. 

In between, the level of corporate activity in the IoT sector continued at roughly the same pace in prior years, albeit down on the years of heightened activity going back five or so years ago. There were several developments among the vendor and network operator communities, but less so among the IoT platform providers. Governments became more active with an emphasis on security and protections for the consumer sector. 

Against the backdrop of 5G developments and 6G pathfinding, IoT is becoming a part of the fabric of enterprise operations and national infrastructure. Established players continue to emphasize connectivity, a relatively small portion of IoT value chains, while enterprises focus on quick-to-market solutions enabled by cloud providers and systems integrators. Both approaches risk leaving ‘system of systems’ issues for later consideration. 

Shifting Paradigms Set to Shape 6G

How is North America affecting policy change and industry competition?

The participation of White House and Congressional speakers at 6G World’s recent symposium shine a light on the strategic prioritization of next generation communications systems. Political participation matters in the context of 6G leadership ambitions, the practicalities of which I outlined in this three-part article series for 6G World - 1: Leadership, 2: Purpose, 3: Leverage. 

The event was equally important for shedding light on how industry stakeholders are approaching emerging 6G topics and market development activities. The mix of discussions spanned academic research, commercial and operational implications of 6G, industry competition, long-term Federal funding programs, policy priorities, standardization, and vertical-industry requirements. Rather than summarize each panel discussion chronologically, here are several threads that ran through the different sessions, beginning with the need to learn from the past. 

Market Development for the Economy of Things

At Mobile World Congress in February 2022, Vodafone launched a new Economy of Things (EoT) platform. It would allow businesses across multiple industry sectors to compete in disruptive, online markets by transforming physical goods into tradable digital assets. 

Just over a year later, Vodafone formed a blockchain based EoT joint venture (JV) with Sumitomo. This will operate as standalone business focusing on IoT devices, electric vehicles, and smart street furniture. Vodafone will contribute its blockchain-based Digital Asset Broker (DAB) IoT trading platform as part of its 80% stake in the JV. Sumitomo will invest in the business. It will also draw in additional investors, partners, and customers.

There is a lot to unpack in Vodafone’s announcement and the dependencies on which the EoT unit’s future successes rest.

Free, low-speed IoT data

Earlier this week, Amazon opened its Sidewalk long-range, low-bandwidth network to developers with an offer of free, low-speed data. On the surface, this sounds like a great inducement for developers and IoT innovators. 

The publicity alone might evangelize the market in the manner that multi-vendor support for the Connectivity Standards Alliance’s Matter protocol is stimulating the smart home market. 

Before committing to AWS’ IoT bandwagon, however, adopters should weigh their position on three questions. 

2022 in Review: A Sudden Shock of Realism

Amazon opened 2022 with announcements targeting the smart home community that is forming around the Matter protocol and opportunities for IoT in non-residential sectors. These two initiatives are examples of how some large organizations are trying to have a “finger in many pies” to make the most of the variety and scope of IoT opportunities. 

2022 closed with a flurry of Matter-compliant product launches from a range of large and small businesses. The year-long journey and commitment to an industry-alliance model point to a degree of realism about the IoT market. Behind the technology fanfare, they highlight how businesses and getting to grips with commercial market-development and the technical challenges associated with interoperability, both of which are needed for scale. Meaningful collaboration seems to be taking hold compared to “go-it-alone” strategies.