Realizing the potential of connected wireless devices

It's been a couple of years since I first started writing about what many experts were calling the next big evolution in wireless: the embedded wireless device. Back in the fall of 2008 I noticed that the big Tier 1 operators such as AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) had formed business units devoted to this area. At the same time,  I started hearing a lot of buzz from module makers and device OEMs about the opportunities that were ahead.

Fast-forward two years and the message is clear: connected devices are quickly moving from niche applications such as remote metering and alarm systems to mass market items such as e-readers, netbooks, connected picture frames and more. In fact, in the third quarter many U.S. operators started reporting the number of embedded devices they have added to their network as these devices started to impact their net additions.  AT&T appears to lead U.S. operators with 1.12 million embedded devices added in the quarter. T-Mobile USA reported 300,000 connected devices in the third quarter followed by Verizon Wireless with its 251,000 connected device additions in the quarter. Sprint Nextel (NYSE:S) has so far not reported its connected device figures. The company says it will wait until the industry figures out a common metric for defining and measuring a connected device before it jumps into the fray.

But some analysts warn that the embedded device ecosystem still has a long way to go until it reaches mass market proportions.  One of the biggest challenges is reducing module costs. Although 2G modules just cost around $20 per module, 3G modules run closer to $47, according to Analysys Mason. While 2G modules clearly have a cost advantage most operators are encouraging connected devices to run on 3G networks. And most consumer electronics OEMs want their devices to benefit from 3G speeds. Hopefully as 3G module volumes increase, the price will decrease making it much more affordable for OEMs to incorporate into their products.

Clearly, the embedded device space is a hot area to watch. That's why FierceWireless has decided to take an in-depth look at the all the aspects of the embedded device business--both in the U.S. and overseas. Check out our new ebook, "The Embedded device evolution: from niche applications to mass market appeal." --Sue

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