In the last blog I wrote about the immense damage that could be done to the market for connected personal devices and the Internet of Things by licensing the 2.3GHz spectrum to mobile networks. As OFCOM is still asking for consultation responses prior to their auction I thought it timely to list some of the reasons that I believe justify a delay in releasing this spectrum. If you agree that it should be postponed, you have until June 26th to send OFCOM your views. Please do, as I believe this could cost the industry billions of pounds and push back innovation.
The battle is between mobile network operators, who want more spectrum and the ongoing survival of the 2.4GHz band. The 2.4GHz spectrum is unlicensed, and used by the wireless standards in most consumer devices, including Bluetooth, Wi-Fi, ZigBee and others. If mobile phones start to use frequencies close to 2.4GHz, it will degrade the performance of these products. Your Internet access may slow down, audio bars and Sonos systems may get noisy, hearing aids will perform poorly, the response of smart home systems could get sluggish or stop. Everything that uses the 2.4GHz band may work less well and have a reduced range, to the point where they’re no longer compelling devices. If that happens, users will stop buying products, businesses may close, investors will lose their money and the current Internet of Things bubble will be firmly burst.
There are a lot of “mays” in that. That’s because we can’t be sure. To their credit, OFCOM have commissioned some tests which show that there is a problem, but they didn’t test enough, or new enough products to determine the true extent of the problem. OFCOM’s response is to say that manufacturers need to redesign their products to be more resistant to interference. However, that adds cost, the technology is not yet available for small products and it can’t be retrofitted to the billions of existing products already on the market. For that reason I believe any auction should be delayed to give the industry time to test and see if it can develop solutions. Otherwise the costs could be enormous.
If you’ve invested in any Internet of Things companies or bought a smart thermostat or Apple watch you may live to regret it. Current plans by the people who regulate the radio spectrum – OFCOM in the UK and the FCC in the US have plans in place which may stop most of these devices working. As a result they could cost investors and the industry hundreds of trillions of dollars.
To most people this is a very obscure technical subject, but I’d urge you to read on. The problem is that the debate is being conducted by regulatory specialists, who appear to have little idea of the damage they may be doing. The consequences are not percolating up to CEOs and investors, who should be screaming blue murder. The result of that resounding silence could be that any products that use Wi-Fi, Bluetooth, ZigBee, Thread or any other radio that works at 2.4GHz will degrade or stop working. That includes your home internet, smart watches, fitness trackers, hearing aids, smart meters, health monitors, wireless headsets; in fact most of the products which collectively are beginning the make up the Internet of Things. It will be a self-imposed wound which could put the industry back ten years, allowing China and others to leapfrog to a position of technical leadership.
Investing in a new wireless standard can be an expensive experiment. The investment can be vast, as I’ve described in a previous article on the cost of wireless standards. It’s not unusual for the combined cost of writing and bringing a standard to market to run into billions of dollars. When a standard loses out to a competing one, it’s a heavy loss both for the VCs who have invested in it as well as the companies who have worked on it. The problem is that there’s not been a good way of determining in advance which standards will succeed and which will fail.
Up until this point, the only real yardstick has been the Intel test. That’s the principal that if Intel invests heavily in a wireless standard (think HomeRF, WiMedia or WiMax), then the standard will fail spectacularly. Conversely, if Intel withdraws its development effort from a wireless standard, as they did in the early days of Bluetooth back in 2002, then the standard will be a roaring success. The Intel test isn’t a perfect one – it fails to predict the acceptance of Wi-Fi, but with a track record of four predictions out of five, it’s a lot better than just flipping a coin.
What the industry needs is a new test. I’m going to suggest the Byron test. It’s a more literary approach, suited to the alphabet soup of the 802.11 family of wireless standards and inspired by the popular description of the romantic poet as “mad, bad and dangerous to know”.
Back in 2010, Mark Thomas, the head of PA Consulting’s Strategy and Market practice published a book called The Zombie Economy. In it he defined a Zombie company as one which is generating just about enough cash to service its debt, so the bank is not obliged to pull the plug on the loan. The issue with such companies is that they can limp along, and just about survive, but as they don’t have enough money to invest, they fall over once the economy picks up, as they become uncompetitive. The problem they pose is that by continuing to exist in this Zombie state they threaten the development of other companies, acting as a damper to more sustainable businesses.
It struck me that there’s a close analogy in the area of wireless standards where we have what are effectively Zombie wireless standards. There’s not necessarily anything fundamentally wrong with these individual standards, other than that they have failed to get traction and so limp along. Here, the problem is that they tend to jealously claim a particular application sector or market segment, blocking other more successful standards from entering. That has a damping effect on product development, creating silos which keep putting off innovation in the hope that one day the standard will gain traction, constantly delaying growth and interoperability. Because they’re not being incorporated into enough products, they have effectively lost their ability to function and have become half-dead, half-alive ‘Zombies’.
I think it’s time to recognise the damage that this is doing. Rather than pursuing multiple parallel paths, the industry needs to concentrate on a far smaller number of short range wireless standards. They in turn need to embrace the requirements of a wider range of sectors.
The first question that most designers ask when adding wireless to their product is “which wireless standard to use?” In some cases, where it is connecting to an existing product, that’s easy to answer. If it’s not, it’s a lot more difficult. It’s one reason I wrote a book about it – to try and help designers answer that question. But another part of the same question is how well the different standards promote themselves as a solution?
This year has seen some major changes within some of those wireless standards. The ZigBee Alliance has lost Benno Ritter – for many years the global marketing face of ZigBee. And the Bluetooth SIG has replaced its Chairman, Mike Foley, as well as its CTO, Andy Glass. Both are interesting moves, as each of these standards is still evolving. ZigBee is taking on smart lighting, home automation and smart metering, whilst Bluetooth is finally seeing Bluetooth Smart appearing in the mainstream. In a recent issue of Incisor magazine, Vince Holton wrote about the loss of passion within the Bluetooth SIG – a sentiment that I’d echo and also extend to some of the other wireless standards. But that’s an opinion formed from being close to these groups. A few years ago I ran to survey to try and see what the general engineering opinion was of the different wireless standards. Prompted by Vince’s article, I thought it would be useful to run the survey again to see what designers think as we approach the end of 2012.
And then there were none. Last month Silicon Labs acquired Ember – the last independent ZigBee chip manufacturer. It’s good news for the Smart Metering industry as it’s secured a future for Ember, who have become the chip and protocol stack supplier of choice for a large proportion of smart meters, IHDs and home gateways in the market today. It’s not such good news for the investment community, as the $72 million initial consideration from SiLabs is a little short of the $89 million investment that had gone into Ember. But given the fire sales of the other ZigBee start-ups, it’s still not a bad result.
And it could be one of those excellent fits that don’t come along that often. For Silicon Labs, it extends their radio technology into the hotly contested 2.4GHz band, complementing their very capable sub-GHz range of EZRadio PRO chips. It also gives them what I’d consider to be the best ZigBee stack on the market. And it gives Ember what must be a very comforting degree of financial security as well as a ready made range of sub-GHz radios, just at the point where the UK and Japanese smart metering communities are looking at 868MHz.
But it’s not just Ember getting gobbled up. A few weeks later, Samsung quietly acquired Nanoradio – the Swedish specialist in low power Wi-Fi for mobile phones. Both Ember and Nanoradios played the standards card and had essentially become one trick wireless ponies – a fate common to many wireless start-ups. Perversely, CSR did the opposite thing today, by divesting itself of much of its location technology, (which it had acquired from SiRF), to Samsung, who seem to be getting rather good at acquiring bits of wireless technology. In doing so CSR moved itself back closer to its Bluetooth roots.
Although the prospect of an acquisition is the raison d’être of most wireless silicon start-ups, I wonder whether this flurry of activity indicates that we’re nearing an end-game? In which case, what comes next?