The Internet of Things (IoT) is a market worth billions of dollars, which continues to grow. So how did Sigfox manage to fall into bankruptcy?
Analysts agree that the Internet of Things will continue to grow. Last year Statista predicted that the IoT will grow to 30.9 billion units by 2025, a big increase on the 13.8 billion units that predicted for 2021.
More recently, IoT Analytics reported the IoT’s growth slowing to 8% annually, which is lower than expected but still a healthy increase. Their figure allows for the issues of the worldwide chip shortage, the war in Ukraine, and factors such as the shortages of skills in AI, IoT and RF design.
The IoT is really many different things
What lies behind these numbers? The “things” in the IoT are devices with a SIM that are connected to a cellular network or WAN, but that are not mobile phones. IoT devices can therefore be many diverse things: fitness trackers, sensors, gas or water meters, lights, heating controls, remote-controlled machinery or health monitoring devices. Some analysts include laptops as they are often connected by the mobile Internet.
The devices and applications are so different that I would argue that the IoT is not one market at all, but a cluster of many fragmented markets and sectors. They all fall broadly under the headings of healthcare, automotive, wearables, smart cities, smart grid and machine-to-machine communications. However these market segments are all very different in terms of their applications, business models and market growth.
IoT market sectors mature at different speeds
The technological and commercial background to the IoT varies according to the cellular networks available in each country, and some IoT sectors are growing faster than others.
- Tracking devices are selling in large volumes. There are trackers for pets, cars, bikes and belongings, as well as business assets, and they are relatively inexpensive. A mature market.
- In business and industry, the IoT has become part of the move towards digital transformation. Gartner reported that 61% of corporates have reached “maturity” with their IoT plans in 2021.
- The smart sector is established and growing. It has real reasons to grow because connected devices can improve building safety and help energy efficiency.
- Similarly smart meters for gas and water, connected to the LP-WAN and NB-IoT networks are seeing strong growth.
- Contrastingly the automotive segment moves more slowly. This part of the IoT market seems to be waiting for 5G to roll out further before autonomous driving and new in-car entertainment services can become widespread.
Sigfox stalled in a many-faceted market
The fragmentation of “the IoT” goes some way to explain the demise of Sigfox. Sigfox was a former “unicorn”, a pioneer of the IoT and LP-WAN backed with over $300 million of VC investment, and a vision to connect millions of devices to its network. The company aimed to connect a billion devices by 2023, but in reality they struggled and only managed 17 million devices.
Sigfox was not as successful with the unlicenced spectrum in the US as it had been in Europe, because of the “noise” on the networks. They came up against competition from the mobile carriers offering NB-IoT and Cat-M and failed to capture much of the important metering market. Sadly they ran out of funds when Covid-19 began to hurt the components market and slow the growth of IoT.
New specialist IoT applications emerge
As I was researching this article, several case studies caught my eye, which show how very diverse the IoT can be, and how it can address some very specific needs.
Managing the water supply to maximise the production of hydro-electric power stations in Wales
Saving energy in Latin American conveniences stores
I’m working as a freelance PR consultant in IoT and wireless markets. You can contact me at anna.wood@technologypr.co.uk
To read more articles, click below: