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Mobile World Congress

Mobile World Congress: Internet of Things for business is humming

USA TODAY
A worker speaks on the phone during the preparations for the Mobile World Congress 2016, in Barcelona.

I’ve had a longstanding debate with a former IT executive about what drives innovation in technology: the consumer or commercial and government markets. The exec argued that it was consumers, and pointed to companies like Sony and Nintendo. I took the other side, and countered with examples like IBM and DARPA.

My friend won the argument – for a time, anyway. Over the years, we’d come to discover that both of us were right. Sometimes.

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I’ve got the upper hand right now, at least when it comes to the Internet of Things, the wide-sweeping blueprint for the business of connecting billions of pieces of hardware to each other. The home market continues to struggle to forge a path to a connected future, wading through pervasive privacy concerns and a limited selection of high-priced thermostats, light bulbs and refrigerators.

The business of IoT for business, meanwhile, is already good business. Cities like Los Angeles and San Antonio are deploying connected street lighting to cut down on waste and make streets safer for drivers. And companies like GE and Harley-Davidson are connecting factory equipment to decrease downtime by predicting equipment failure, and to anticipate heating and cooling needs to cut costs and improve comfort.

A member of the Catalan police, mossos d'esquadra, patrols outside the Mobile World Congress building in Barcelona on February 19, 2016, before the start of the world's biggest mobile fair, held from February 22 to February 25.

IoT to dominate deal-making

This week, you’ll see lots of shiny new smartphones, smartwatches and VR headsets from consumer electronics heavyweights like Samsung, LG and Sony at Mobile World Congress, the wireless industry’s annual marquis event in Barcelona. But it will be IoT for business that dominates deal-making activity behind closed doors and on the show floor.

It’s not hard to see why. Gartner forecasts that the market for IoT services will top $101 billion this year, nearly 30% more than the $78 billion that businesses spent last year. By 2020, spending for services like network deployment, operations management and data analytics is forecasted to balloon to $257 billion. In comparison, expenditures for services in the consumer IoT market are insignificant, Gartner says.

The installed base of connected-home devices is actually higher than business IoT devices in use – 2.9 billion units versus 1.6 billion – though most are entertainment devices like smart TVs, home-theater receivers and set-top boxes, and not connected-home automation, energy and security devices.

AT&T, Verizon

Watch for cellular carriers like AT&T and Verizon to double down on their IoT businesses at Mobile World. With the wireless business coming under increasing pressure, the IoT is becoming more strategic for both companies. Verizon’s IoT business, for example, grew 18% last year, to $690 million. Wireless revenue grew just 4.6%, to $91.7 billion.

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AT&T does not break out IoT revenues. But the company did just disclose a host of new IoT initiatives for healthcare and smart cities, as well as software and services for overall IoT deployment. The company will be showcasing those capabilities at Mobile World.

Networking services giants like Ericsson and Alcatel-Lucent will call attention to their IoT networking capabilities in part by positioning themselves as leaders in 5G, whatever that turns out to be.

Companies like Aeris and Sigfox won’t be going toe-to-toe with the giants on 5G. They offer wireless networks for the IoT that are architected specifically for machine-to-machine communications. They’ll be on hand to offer connectivity for everything from smart cities and micro grids to factory automation and inventory management.

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With vanishing growth for PCs, tablets and smartphones, chipmakers like Intel and Qualcomm are placing growing importance on the IoT. Like Verizon, revenue for Intel’s core business ($32.2 billion) dwarfs its IoT business ($2.3 billion), though IoT grew 7% in 2015, compared to an 8% decline for the PC client business. Qualcomm does not break out IoT business results.

Both companies plan to spotlight their 5G capabilities at Mobile World as well as chipset offerings for IoT devices and networking equipment.

Companies like Telit and Sierra Wireless, which sell modules, gateways, management software and analytics options, have for years offered IoT packages built around hardware from Intel, Qualcomm, TI and many others. You can find their modules inside many of the connected equipment inside factories and warehouses – and out on the street. When I met with Telit execs for lunch in Barcelona last year, a street-sweeping machine rolled by with Telit modules inside that helped track levels of cleaning fluid and gasoline.

To be sure, there will be plenty of technology on display at Mobile World where consumers are driving innovation. There is work underway with VR headsets in the enterprise, for example. But what’s really driving development today are decidedly consumer-centric applications, like immersive gaming.

So you see? Sometimes my friend and I are both right. And sometimes, we’re even both right at the same time.

Mike Feibus is principal analyst at Feibustech, a Scottsdale, Ariz., market strategy and analysis firm focusing on mobile ecosystems and client technologies. You can reach him at mikef@feibustech.com. Follow him on Twitter @MikeFeibus.

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