Paolini: M2M and the Internet of the pampered self

By Monica Paolini, Senza Fili Consulting

   Monica Paolini

The Internet of things has a bright future, but growth so far has been painfully slow. But, there are encouraging signs of progress among consumer machine-to-machine (M2M) applications.

Consumer applications offer perhaps the most promising source of growth and innovation for M2M because adoption in the consumer market takes place organically, in a more dynamic and competitive environment than, say, in the utilities or health care industry. Individual consumers decide which applications to support with their wallets and the impact of their choices can be felt quickly, with no lengthy strategy reviews or RFP processes.

Progress in consumer M2M is driven by innovative ways to seamlessly combine devices, interfaces and functions--which is what is really needed to get users' attention and the growth rates needed for the internet of things to move beyond niche.

Wearable, health-tracking devices are an excellent example of this. I have written about the sleep-tracking Zeo, a device that sends your sleep-tracking data to your smartphone, tablet, or PC, where you can access your data through a simple interface that is consistent across devices. A key advantage of devices like the Zeo is that they do not require cellular connectivity, and hence cost less, are smaller and use less power.

Devices like the Fitbit takes this model one step further as they start to integrate the functions and features of multiple devices within a single, well-designed interface that caters well to the whims of the most pampered among us. The Fitbit started off as a fancy pedometer, but now it also tracks steps and sleep and has a companion Wi-Fi scale (s­imilar to that by Withings) that adds weight, BMI, and fat percentages to the recorded metrics (for more information, see these articles on GigaOM and Entrepreneur). Data from the Fitbit wearable device and from the scale are uploaded automatically to the cloud, via the smartphone or Wi-Fi, and can be shared with third-party applications. Users can also share these data on social networking sites, and develop diet and exercise plans if they manually add information on food consumptions and physical activity.

Devices like the Fitbit create an area of continuous connectivity around mobile devices that is used both to collect data and present it back to the user. They use limited network resources and they do not require much more than Bluetooth connectivity on the device. At the same time, subscriber's commitment is limited to initial purchase of the device (i.e., no monthly subscription, unless they inadvertently put the Fitbit in the washing machine and need to buy a replacement).

While no action is needed on their part (no separate SIM-based device to provision), mobile operators stand to benefit from these applications because they expand the smartphone or tablet usage model, and create a higher perceived value for data connectivity, with a very contained use of network resources. In the US, operators like AT&T and Verizon have started to sell the Fitbit in what is an effort to move beyond bread-and-butter data connectivity.

This approach also represents a trend towards closer, mutually-advantageous relationships with over-the-top (OTT) players (and Fitbit is, after all, an OTT player). While it is difficult to directly monetize the service by, for instance, charging a monthly fee, the operator can initially act as a reseller. Eventually, there may be opportunities to offer premium optional services to subscribers that can be marketed and sold by the operator (e.g., access to additional data analysis, which is now offered exclusively through Fitbit) or by the OTT partner with revenue-sharing agreements, if both parties bring a unique contribution (e.g., prioritized network access for premium data).

Disclaimer: I received a free Fitbit tracker and scale from AT&T. I did not discuss any of the topics above with AT&T (or other operators) and the views expressed here are my own. Furthermore, I lost my Fitbit less than a day later, and replaced it at my own cost. It was not lost, however, in the washing machine.

Monica Paolini, PhD, is the founder and president of Senza Fili Consulting and can be contacted at Senza Fili Consulting is an analyst and consulting firm that provides advisory services on wireless data technologies and services.