Cultural Forces

The cellular world has a long-standing culture of standards bodies and technology providers pushing standards forward to bring home more bacon. The technology providers’ revenue comes from royalty and licensing fees paid by the cellular carriers for using their technology. With each generation of technology, they compete with one another to be the provider with the most intellectual property rights (IPR) in the wireless stack. For instance, Ericsson wants to provide the most IP so that its revenue streams increase; Huawei, Nokia, and others want the same. This competition shows up in the standards bodies with each standard round being just another lap around the IPR race track.

The standards bodies have representatives from the technology players as well as others. Of course, if your company has a representative present, and you know your company is developing some strong IP in a certain area, you have the incentive to influence the standard toward your strengths. That way it is easier to have your IP represented, allowing your company to get a larger portion of the revenues. Nice! This is all fine and has given us some phenomenal high-throughput technology. But this pattern destroys the longevity needed by so many machines.

This pattern emerges because of two forces. First, as just described, technology providers stand to gain more as each standard is developed. They are competing to have their IP take the largest share for the next generation. They gotta keep the money flowing. Second, the standards bodies are an entity unto themselves, and that entity wants to continue existing. There are multiple standards bodies (e.g., 3GPP and GSM), and these bodies compete with one another to write the standard that will in the end define the next generation of wireless technology. That will not go away.

These bodies’ sole purpose is developing standards; it is their charter. And this has not changed for the IoT standards. Even within the last year, standards have been created and have died (Cat-0). LTE-M was just announced in September of 2015 as a standard, but NB-IOT is only six months behind it and there is EC-GSM as well. In fact, in the time between the original draft of this post, and the publication of this post, it was announced that what was LTE-M is now LTE-M1, and NB-IOT is now LTE-M2!

In a space that requires more continuity to justify investment, the standards bodies have actually increased their standards-creating cadence.

This does not bode well for IoT devices and the businesses wishing to connect them wirelessly. The IoT needs to avoid the IoT IPR race track altogether. It doesn’t need endless loops of standards changes, it needs a straight line of continuity as far as the eye can see.

The forces driving the standards creation are economic (technology providers competing for their piece of the IP pie) and cultural (the standards bodies exist to write more standards). These forces will continue, and recent history suggests they will only increase in intensity.

Download our Cellular Sunsets Generations infographic to see this pattern for yourself in countries around the world.