In the world of IoT, there’s a noticeable trend of globalization of communication module manufacturers.

The tree of technological components grows from chip manufacturers to manufacturers of functional sensors and devices that transmit measured data to mobile networks. Somewhere in the middle of this tree are communication module manufacturers who will take the chips and supply them along with other components as a communication module to IoT device manufacturers.

Last year, important players such as Quectel, Telit, Nordic Semiconductors and u-blox focused on offering marketing-friendly packages of end2end solutions, where the SIM card chip is already integrated in the communication module and all communication is directed to the backend, which these manufacturers also operate.

This topic is peripherally touched on by the issue of e-SIMs or virtual SIMs, but that topic is so extensive that we will deal with it in one of the following articles. Setting aside the eSIM perspective (and therefore the choice of a suitable NB-IoT or LTE-M mobile service operator) and remain confident in the declarations of communication module manufacturers that their modules will communicate in your location, we can analyze and evaluate the individual parts of the solution from the point of view of vendor lock-in, i.e. from the point of view of limiting the possibilities to change the architecture of the solution in the event that a technically or commercially more interesting alternative appears.

Let's start with the IoT device. It can be a sensor measuring the temperature in a shipping box or soil moisture or grain in a silo. It can be a smart box that sends data about water, gas or electricity consumption every hour and does so for five years. In short, it can be any LowPower IoT device. The manufacturer of any IoT device devoted a lot of time, knowledge and energy to creating the most suitable firmware, which in addition to the basic functions (e.g. transferring the required data) also ensures the possibility of changing the device settings remotely (including updating or upgrading the firmware) and making the device available again in the event that something went wrong in the communication chain. And believe me, 5G LowPower IoT communication is still in development and occasionally something like this will happen.

The risk point is obvious for device manufacturers—it consists of limiting the possibility of changing communication to a server other than the server defined by the communication module manufacturers. Sometimes manufacturers of communication modules go even further and allow firmware updates or upgrades only from their servers. Then the device manufacturer has no choice but to implement the procedures required by the manufacturer of the communication modules. The limitations are obvious. Not only can it happen that some functionality is simply not enabled by the module manufacturer, what is equally limiting for device manufacturers is the necessity of developing different versions of firmware for different communication modules. Or, just bow your head and use only one type of communication module in all devices.

When we move beyond the device itself to the communication between it and the place where the data is stored, their dependence on a single vendor is sometimes a very limiting factor. Not only is the customer denied the possibility to choose a communication service provider that would offer him a tailor-made tariff (it may not always be the cheapest - the prices for IoT connectivity are at the level of a few £/$/€ per year and the differences are not large, the bigger differences are in the technical parameters of the service), but can get into a situation where the operator chosen by the manufacturer of communication modules does not have coverage in the required area and another does... Unfortunately, the customer cannot then switch to the services of the alternative operator.

The last segment that is affected by the efforts of module manufacturers for all-in solutions are applications that work with data from the device. Since module manufacturers are not inherently software companies, it cannot be assumed that they would be as strong in this area as in the hardware area. However, the largest margin is in the area of applications, which is why applications are so attractive for the manufacturers.

And since the interesting margin is not in communication services, the value of which is a few cents per device and we really know something about that😊, they are trying to expand their scope into the area of more sophisticated functions and more complex services. But here they are already becoming direct competitors of system integrators and sometimes even developers of applications for data processing and visualization.

It's just that when you buy a car, you may also want to drive somewhere other than to the city where its manufacturer is located, or if you feel like upgrading your wheels, you don't expect the manufacturer to say ‘NO!’ when you try to switch.

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