Showing Love for IoT Device Manufacturers

Often overlooked by those focused on the end users of the IoT are the companies that manufacture the devices in use. These can include the component manufacturers as well as those companies that piece them together to provide a finished product for public consumption. Businesses and others investing in IoT devices will achieve greater economies of scale the longer their investment can be utilized without additional expenditures. That’s the beauty of economies of scale. If manufacturers were to attempt any sort of “planned obsolescence” scheme, the demand would quickly dry up because prices in this space are so elastic. The long device life cycle, therefore, not only enables businesses and consumers to invest in IoT devices, but also allows manufacturers to gain the ROI necessary to be profitable at such a low price point. Elasticity can be leveraged by manufacturers for greater profitability.

This price sensitivity can be good for manufacturers. Longer device life cycles allow for a longer time period to stretch design and capital assets across.

First, the device makers will reach scale as they are able to produce enough devices over which to stretch their fixed costs. These costs include design and testing costs, certification costs (where applicable), and their own capital costs for manufacturing. Because device prices need to be sufficiently low to achieve broad adoption in the market, the margin per device will not likely be very large. However, this margin can be increased as the manufacturer reaches scale through longer device life cycles and greater volumes. The long device life cycle plays into the need to reach scale quite nicely.

RPMA offers the simplest path to economies of scale.

RPMA supports one worldwide band. This means it would require less than half the volumes for RPMA than even Sigfox or LoRa to achieve scale serving only the US and Europe. Add to that Asia, and suddenly RPMA’s path is even simpler to scale. Cellular offers the most complicated manufacturing path with dozens of bands worldwide. Cellular has 6 bands to support in the US alone. Then add to that the fact that there are several variants of cellular LPWA candidates and any semblance of simplicity and scale evaporates. In fact, some companies’ entire value proposition is based on trying to help businesses wade through the mess that cellular provides. This is hardly the simplicity needed to offer the economies of scale needed to bring the next generation of IoT devices.

To learn more about how RPMA is able to simplify the path to scale, read our white paper, How RPMA Works.