BARCELONA, SPAIN – A car that tells your insurance company how you are driving. A bathroom scale that lets you chart your weight on the Web. And a meter that warns your air conditioner when electricity gets more expensive.
Welcome to the next phase of the wireless revolution.
The first wave of wireless was all about getting people to talk to each other on cellphones. The second will be getting things to talk to each other, with no humans in between. So-called machine-to-machine communication is getting a lot of buzz at this year’s wireless trade show. Some experts believe these connections will outgrow the traditional phone business in less than a decade.
“I see a whole set of industries, from energy to cars to health to logistics and transportation, being totally redesigned,” said Vittorio Colao, the chief executive officer of Vodafone Group, in a keynote speech at the Mobile World Congress in Barcelona, Spain.
The British cellphone company has vast international interests, including its 45 percent ownership stake in Verizon Wireless.
Companies are promising that machine-to-machine, or M2M, technology will deliver all manner of services, from the prosaic to the world-changing.
At U.S. chipmaker Qualcomm Inc.’s booth at the show, there is a coffee pot that can be ordered to start brewing from a tablet computer, or an Internet-connected alarm clock.
Former Costa Rican President Jose Maria Figueres is also at the show, talking about how M2M can save massive amounts of greenhouse gases by making energy use more efficient — enough to bring mankind halfway to the goal of halting global warming.
The M2M phenomenon is part of the larger drive to create an “Internet of Things” — a global network that not only links computers, tablets and phones but that connects everything from bikes to washing machines to thermostats. Machina Research, a British firm, believes there will be 12.5 billion “smart” connected devices, excluding phones, PCs and tablets, in the world in 2020, up from 1.3 billion today.
But how does this transformation happen, and who stands to profit?
First, the devices have to be able to connect. That is not a trivial undertaking, especially considering that people do not upgrade washing machines or renovate their homes as often as they change cellphones and PCs. One company at the show, a Los Angeles-based startup named Tethercell, has an ingenious solution for battery-powered devices: a “fake” AA battery that houses a smaller AAA battery in an electronic jacket. It can be placed in a battery compartment with other batteries.
Within a distance of 25 meters, some smartphones and tablets can then signal the “battery” to turn the device on or off. For instance, parents whose kids have a lot of noisy toys can turn all of them off with touch of a single button.
A fire alarm could send a text-message warning that its battery is running low, rather than blaring an audio signal.
Unfortunately, a Tethercell from the first production run costs $35. Cofounder Kellan O’Connor believes the price can come down to $10, but that is still a nontrivial cost, and symptomatic of the high price of building out the Internet of Everything. For devices that need to connect at long range over a cellular network, the cost of radio components alone ranges from $10 to $70, according to analyst Dan Shey of ABI Research.
That is not expensive in the context of some big-ticket items, like cars, which have been forerunners when it comes to non-phone wireless connections.
General Motors Corp. started equipping cars with OnStar wireless calling and assistance services in the mid-1990s. At the show, it announced it is updating the service for faster data connections, enabling services like remote engine diagnostics and upgrades to the control software. AT&T Inc., which has been aggressive about getting into the M2M business, is ousting Verizon Wireless as the network provider for OnStar.
Colao gave an example of another “smart” car application that might seem intrusive to some. The company has been trying out a service in Italy that lets an auto insurance company know how much a car is being used, and charges premiums accordingly.
It can also score the driver based on his or her driving style, and give pointers on how to handle the car more safely.
Another new technology that turns a car into a smartphone accessory, allowing a driver to use cutting-edge apps without veering off the road.
Called MirrorLink, and adopted by 85 big manufacturers from Ford to General Motors, Chrysler, Nissan, Honda, Hyundai, BMW, VW, Fiat or Renault, it connects a smartphone and car entertainment system with a two-way audio, video and data link.
MirrorLink requires a compliant car entertainment system and a smartphone with the software, which can be downloaded. Drivers then can access their favorite apps.
The apps must meet legal requirements for screens that face drivers, for example the text must be a certain size and some functions such as typing must be disabled while the car is moving.
Eventually, the MirrorLink technology will feed other data from the car to the smartphone, such as speed, location and even weather. That information can be used to develop new applications or improve other services, such as traffic news.
The Car Connectivity Forum, which groups nearly all car manufacturers, was set up to develop the technology two years ago.
The first MirrorLink compliant car entertainment systems have been released by the likes of Sony and JVC, for installation into existing vehicles.
The next step will be for manufacturers to build them into cars before sale.
The new technology avoids problems posed by the “smart car” in which manufacturers weld a SIM card into a vehicle so as to offer the driver services such as navigation, SOS response and door unlocking, as well as paid-for entertainment.
One challenge is that the SIM card built into the car ties the owner to one operator for the car’s life — up to 15 years. To overcome this, carmakers are trying to agree on a standard way to program the SIM card by remote.
Cellular connections are creeping into smaller, cheaper devices as well.
The Spanish company eCooltra, which rents out electric scooters by the day, wants to connect them to the Internet, which would let renters find out through their phones where there is a scooter for rent and how much of a charge is in the battery. The feature is perfect for impromptu rentals by the hour.
Adding “smarts” to the scooters in the shape of a cellular modem would turn the company from a conventional rental service to a “scooter-sharing” business, much like car-sharing services such as Zipcar.
Once devices are connected, the next problem is getting them to talk to each other, and making sense of what they are saying. ABI’s Shey says this is the real business opportunity in M2M, more valuable than making the modems or providing the wireless connections.
He believes that is driving a behind-the-scenes scramble of deal-making at the show, as companies such as AT&T seek to bolster their ability to support M2M by acquiring companies that provide a “middle layer” of software between the devices and their owners.
For connections between devices in the home, like that remote-controlled coffee pot, Qualcomm touts its AllJoyn project, which it seeks to make an industry standard. Currently, the main ways for devices to connect to each other and figure out what they can do, like Bluetooth and DLNA, are too limited and difficult to use, said Rob Chandhok, president of Qualcomm Innovation Center.
With AllJoyn, “there’s nothing to stop you from making a speaker that listens for notifications and turns them into speech, so you hear, ‘Hey, you left the refrigerator door open!’ ” Chandhok said. “You take very simple things and connect them, and people build experiences on top of them. That’s what we’re trying to do.”
Figueres, Costa Rica’s ex-leader, is now president of the Carbon War Room, an organization cofounded by British billionaire Richard Branson to promote cutbacks in greenhouse-gas emissions through smart private enterprise. Figueres believes M2M has huge potential to wring efficiency out of energy-guzzling activities, and could reduce emissions equivalent to 9.1 billion tons of carbon dioxide by 2020 — roughly equal to the combined emissions of India and the U.S. today.
Vodafone provided one example of how this might be done. The city of Groningen in the Netherlands has put sensors in the trash containers that serve public-housing units. They alert trash haulers when they need to be emptied, saving on unnecessary trips and reducing fuel use by 18 percent.
With M2M, “in many cases you have information moving instead of us moving,” Figueres said.
In another example, Dutch authorities started controlling their street lights wirelessly rather than with “dumb” timers. They save on energy by dimming the lights if traffic is scant, but can also turn them on early if the day is dark.
Could M2M be overhyped — a promise that won’t deliver? The wireless industry is no stranger to rosy projections that do not pan out.
Shey, the ABI analyst, thinks M2M will deliver, but perhaps not in a sexy, flashy way.
When machine-to-machine connections are created, he said, it is usually not because someone is making a big bet on the future, but because they save money.
“It’s about gaining more out of the asset that you have, like a truck. When it needs maintenance it gets maintenance at the right point ,” he said. “Or ensuring that the vending-machine guy only goes to the vending machine when it’s empty.”
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