The Internet of Things: Why Carrier Won’t Need You Anymore

The Internet of Things: Why Carrier Won’t Need You Anymore

Who needs customers when you can connect everything?


Dogs have a busy schedule — they have a lot of butts to sniff. So when they don’t have the time to call when they go out, you get worried. What’s an owner to do?

Giving them a phone isn’t all that practical. But if you’re on Verizon, there’s a “Pet Tracker” collar that’ll send you a polite text or e-mail when your dog decides to go out for a few errands. You can load up a map and track him down, and in the meantime, get reports to show you if he’s sniffing enough butts — I mean, exercise. Everything works seamlessly. Very cool, indeed.

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Gadgets like these are a new breed of “smart” devices that can communicate. Whether it’s smart thermostats that you can control with your phone, or wireless pill bottle that send you a text if you forget to take your medication, 4G is changing the way we live. And at the center of it all? AT&T, Verizon, Sprint and T-Mobile. After all, someone has to connect these devices. And if dog collars and a series of recent overlooked acquistions by carriers gives us any clues, it’s going to be a very lucrative business.

If you bought an iPad, you likely piggybacked off AT&T or Verizon’s network. Pop in a SIM card, activate your device and you were ready to roll. Carriers charged you by the megabyte, and you got all the cat videos you could watch. Life was good.

Carriers have done well drawning most of their revenue from subscribers, first in voice and text, then through data. But the truth is, that business is a saturated industry — everybody has a phone, sometimes two. Telecoms, meanwhile, are dealing with sinking voice and texting revenue, an imbalance between data costs and earnings, and new competitors like Facebook and Google.

You can say the iPad revolutionized the PC industry, but it actually changed the telecom sector as well — but not in the way you think. Prior to the iPad, the Kindle spearheaded the idea of a wireless-connected tablet — you could browse and buy e-books, and get it sent wirelessly to your device — but it wasn’t all that practical to browse the Web. No, the iPad really opened the door to the data business for telecoms.

Opportunity Knocks

So what’s the future hold? How will it change our lives? When Sprint CEO Dan Hesse talks, he has this demeanor about him — sort of that uncle you can count on to give it to you straight — and he gives it to you straight on the future of data.

“The key for Sprint is that old Gretzky quote, ‘You’re not that fast, how come you’re always at the puck? I skate to where the puck is going.’” he told Charlie Rose in an interview. “And the puck is going really to data. It really is an exciting time not only in telecom but in digital technology.”

He isn’t referring to consumer data, but rather what’s called machine-to-machine, or M2M, technology. That’s everything from electricity meters that relay information to engineers to parking meters that you can operate from your smartphone. Simply put, it’s devices that can communicate. And the appeal of smarter devices is that it reduces operating costs, significantly.

Of course, none of this is particularly new or complicated. In fact, smart devices have run on 2G connections for years. But 4G is shifting the way companies as a whole are monitoring and controlling their operations. And in the process, telecoms are becoming the gatekeepers of that network.

Why carriers? Companies can connect devices over, say Wi-Fi, but if there are network problems — and there are plenty — it can cripple customer experience. That’s a problem, and companies need support. Meanwhile, carriers will be the first to know what’s going on, and what to fix, so they won’t be cut out. But just to be safe, they’re also providing valuable services, like analytics, to meet the growing demand.

If you’re not scouring the neighborhood for your dog, Pet Tracker has a nifty feature that can show you “activity” charts, telling you whether he’s getting enough exercise throughout the day. It’s exactly this type of value-added service that’s changing how we live and interact with gadgets — and a glimpse into the future role of telecoms.

Different Strategies, Same Goal

For carriers, consumer devices still represent the biggest opportunities for wireless growth — industries like automotive, health care and utilities. How big? According to the Yankee Group, M2M revenue for carriers is expected to reach $9 billion by 2016.

But while the potential profits are clear, long-term strategies are not. Part of the problem? It’s not as simple as setting up a network and collecting the cash. There’s a significant gap traditional companies must bridge to transition to smarter products. Most can’t do it themselves, and many look to carriers for a solution. Unfortunately, telecoms often lack the expertise to help them connect. But they’re forming partnerships to customize networks and offer solutions to bring in related industries.

How? In January, for example, Verizon acquired NPhase, an M2M platform, to beef up its connected devices services. NPhase helps companies connect to smart grid, fleet tracking and other Web-connected services. Then, in June, Verizon bought Hughes Telematics, a company that makes in-car dashboards, giving it an entry into smart vehicles. Hughes also has a “Lifecomm” unit, giving Verizon a beachhead to push into the burgeoning mobile health sector.

AT&T decided to build an in-house division to move into connected devices. While less ambitious than Verizon, AT&T standardized series of tests and certifications to help healthcare, education and home automation companies add connectivity to their devices. Sprint is working with Chrysler to connect the automaker’s Uconnect program, another smart dashboard. T-Mobile, meanwhile, strayed farthest from the herd. Rather than working directly with companies to add connectivity, it’s working with Raco Wireless, an M2M distributor, in a wholesaler strategy. Raco handles all the tools and manages and monitors deployments.

AT&T, Verizon, Sprint and T-Mobile have different strategies, but all four have made connected devices a focal point in their future plans. So what does 2013 hold? Well, as a consumer, you won’t see a difference on your phone bill, yet. But behind the scenes, carriers have built the wireless infrastructure necessary to support a new generation of smart devices. And once they gain momentum, carriers will have a lucrative new source of revenue. Whether that translates to lower costs for consumers is yet to be seen. But if you thought you, the consumer, were the reason they furiously spent billions to expand and speed up their networks — think again.

Telecoms are looking ahead to companies, not consumers, and the globs of cash they’ll have to pay to connect to data. Consumers are just the solution for today, but the long-term potential is in all those refrigerators that need connecting to buy your groceries, all those self-driving cars that need connecting to pull directions and all those wireless pills that need connecting to measure and send back cholesterol levels in your stomach.

It sounds like a sci-fi movie, but it’s close to reality. Smart gadgets are being developed and rolled out, and they’ll come in droves — all running one of the 4G wireless networks. And before you know it, you’ll wonder how you lived without your wireless pet collar. But best of all? For now, you can get the peace of mind knowing you’ll be able to track your dog, and he’ll get to enjoy his butts. It’s the best of both worlds.

Going Where No Sensor Has Gone Before

From the ice rink to the fire department, the farmer’s field and the assembly line, sensors are in more places than you know — silently laying the foundation for big changes in how we work and play. Every time you send a tweet, you feed the big data machine. Every Facebook “like,” every page you browse, it all leaves a digital trail of your activities.

When chips are everywhere, they track our moves, measure our temperature and scoop up that digital trail to gleam useful information to make our lives more productive. We embrace sensors to check diet and exercise, but business use will soon dwarf consumer use. The so-called “Internet of things” trend is exploding, and devices beyond our phones will connect to one another, changing the way we work and live. To get a better feel, here are surprising places sensors are popping up.

Want to fight fires better? Then swallow a pill… at least, that’s what firefighters in Australia are doing. Each pill-sensor has a micro-sized thermometer and wireless transmitter to check vital signs in a blaze, used to help firefighters cope with stress and fatigue.

“If we see their core body temperature increasing then we know to remove them from the fire and put them into the rehabilitation area,” fire official Peter Langridge, told Time.

The program comes months after the Defense Advanced Research Projects Agency, or DARPA, announced plans to create nanosensors to check the health of soldiers in the battlefield, keeping doctors informed of any health problems in real-time. Working in high-temperature or hostile environments can add different levels of stress, so these internal sensor-systems can show when people should be sent in or pulled out, and how they’re dealing with a fire or a war zone.

The pills are made of plastic, unlike ordinary capsules, so they pass through the body in a couple of days. So far, only highly-specialized industries, like the military, use consumable sensors, but with research and refinement, you will soon take a pill to measure your bodily activities. Instead of opening up to say “ah,” for example, your doctor may ask you to swallow a pill to check your stress levels. These sensors are in the early stages, but the ripple effects will change everyday life.

Sensors, used to measure the impact in head injuries, are also helping soldiers fight traumatic brain injuries. The U.S. government, for example, awarded BAE Supply nearly $17 million for a system, called Headborne Energy Analysis and Diagnostic Systems, or HEADS. The sensor — about the size of a credit card — is placed on combat helmets to measure impact duration, blast pressures, ambient temperature, angular and linear accelerations, as well as the exact times of single or multiple blast events — factors that commonly cause brain injuries for soldiers in Iraq and Afghanistan.

“The Army has an urgent demand for technologies that help identify individuals who may be in need of medical assistance for potential head and brain injuries,” Don Dutton, vice president of Protection Systems at BAE Systems, said in a statement.

For the less hazardous, sensors are already used in sports, helping to protect kids from the nearly four million concussions each year. According to Daily Herald, in Illinois, high school hockey coach Tim Johannes designed the “Shockwave,” a clear sensor that attaches to the back of a player’s helmet. It measures the force of an impact, and turns red for hard hits. Before using it, the sensor is calibrated to each player, after testing for balance and motor skill.

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Shockbox shows a range of colors to gauge the impact of a hit, and then transmits it to the smartphones of concerned parents and coaches via Bluetooth. Reebok plans to release a similar product, dubbed “CheckLight,” later this year. But rather than attaching to a helmet, the skull-cap fits directly around the head. These examples join other products to help measure your health, helping to track heart and lung diseases, or biometrics like blood sugar levels. Similarly, motion sensors can help diagnose a spectrum disorders.

As utilities turn to smart meters, they’ll be able to generate more accurate bills and send alerts in case of disruptions. In California, for instance, Pacific Gas & Electronic replaces 1,200 old-fashioned meters with digital meters each day, while in the U.K., “AlertMe,” a smart meter contractor, covers 10,000 British Gas customers.

Beyond efficiency and convenience, smart homes can compromise your privacy. These sensors measure a cache of data about the home, and store it on servers worldwide. Data such as the contents of your refrigerator, the number of people in your home, the identities of your family members seems innocent enough, but in the wrong hands, it can be dangerous.

Farmers are reaping the benefits of sensors too. The agriculture industry, often at the mercy of nature, is also embracing social media to communicate with one another and with consumers and is now developing high-tech ways to increase crop yields. And, sensors are on the forefront, generating positive buzz. Precision agriculture, which uses scanners, GPS and sensors to manage plants, can read the health of plants and apply the right amount of fertilizer to ensure big crops.

Meanwhile, scientists are developing tiny ping-pong-like robots, called “droplets,” which work in swarms to maximize farming efficiency. Robots check the environment to figure out the health of plants, forecast yields based on color and height and show when crops are ideal for harvesting.

“We have to produce double as we go forward to meet the growing world population,” Raj Khosla, professor of precision agriculture at Colorado State University, told the Jamestown Sun. “Farmers are seeing more value to their crops and want to see how they can increase the return.”

Some companies turned to sensors after the recent recession. Increased efficiency is a big benefit, but it often comes at the cost of human workers. For example, Cleveland auto supplier “Stripmatic” uses sensors instead of workers to detect jams inside its machinery. Instead of four “smashups” a month, sensors cut it to just two a year, according to the Washington Post.

Sensors, unlike workers on the production floor, can detect a jam instantaneously. And systems that integrate sensors can stop operations on the spot to fix the problem. A worker, by comparison, must physically halt the line, get details from observing and add data into the computer — costing precious time and money. As a result, Stripmatic does 20 percent more business with a third fewer employees.

As the costs of sensors drop, they’ll alter how we grow our food, manufacture our products and check our health and homes. Sensors are getting smaller, and despite being hidden, they’re attracting a lot of attention. But the streams of information they generate will pour into the giant ocean of “big data,” laying a foundation for great changes in how we live, work and play. Sensors will pass results to algorithms to interpret and find deeper meaning.

In hockey, for example, concussion helmets that help one player check for hits can also slow the impact of hits at different angles. That, in turn, can tell league officials how to change the rules to better protect players. Similarly, other factory systems can combine sensors to find optimal ways to increase production — all as a result of a tiny sensor embedded in your helmet, your hat or in the tiny crevice of a machine.


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