Online Gizmos Could Top 50 Billion in 2020Natasha Lomas
Fifty billion connected devices are coming to cellular networks in the next decade, according to Ericsson—as everyday objects go mobile.
Ericsson's VP of systems architecture, Håkan Djuphammar, predicted the years to come could see connectivity spread to some of the very smallest household items.
"[In 10 years' time], everything has connectivity. We're talking about 50 billion connections, all devices will have connectivity—your cameras, your everything.
"I'm not sure if you will have broadband in your toothbrush but maybe your dentist wants to know [how you brush your teeth] so why not? Connect everything," he told Ericsson's Business Innovation Forum in Stockholm last week.
This mobile 'internet of things'—machine-to-machine connections in smart toothbrushes and the like—will help fuel the industry's growth, according to Ericsson (ERIC).
Jan Håglund, deputy head of IP and broadband networks at the infrastructure company, told delegates: "The ceiling for mobile is completely different than the ceiling for fixed access. The ceiling for fixed access is basically the number of homes and enterprises—whereas the ceiling for mobile is not even the amount of people but it's maybe the amount of things," he said.
So far, so futuristic. But can the mobile industry cope with this traffic explosion?
A recent report by analyst house In-Stat predicts mobile backhaul capacity demand will triple between 2009 and 2013 as data consumption continues to grow.
According to Ericsson, mobile traffic is doubling every year—or in other words the industry is looking at carrying 1,000 times more traffic in a decade.
Intel's John Woodget, global director, telecoms sector, gave more conservative data growth predictions, however—at least 20 billion connected devices by 2020 and a 300-fold increase in traffic—but he warned that even at that level of growth the challenge "may be far greater than we expect".
"The big challenge for the telecoms world is they've got to figure out some ways of generating revenues—getting a share of wallet… to invest in the infrastructure build out. We're going to need a huge infrastructure build out," he added.
Woodget said the problem is that business models capable of monetising the hyper-connected world are not there yet.
"This unprecedented growth—this huge wave of traffic that's coming onto the network doesn't have an understood business model that's going to pay for investment to continue growing the infrastructure. That's the challenge that we face," he told the Forum.
According to Woodget, 'free' is not the answer. Free content and free flat-rate mobile data tariffs do not offer a sustainable business model for an age when the world and its toothbrush are online, he said.
"Right now it's sustainable because most of us aren't consuming gigabytes of data but are paying for the few who are—but what happens if that continues?" he asked.
Instead, mobile operators need to look at "two-sided business models" the Intel (INTC) exec said—in other words not just selling connectivity to mobile users but also selling user data to third parties who are building services. He added that collaboration with different players—be they software and app makers, or even the car industry—is going to be the order of the day.
"We can't do this on our own. We don't think any player can actually dominate the market on their own—it requires collaboration," Woodget said.
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