Why is NB-IoT, which once "firmly sat" at the top of the low-power Internet of Things, now frequently "questioned"?

With the advent of the Internet of Things era, the "Internet of Things" (the network required for communication between things) has gone through three to five years from technical enlightenment to network construction, which has directly promoted the rapid prosperity of the low-power wide-area network, among which LPWAN technologies such as NB-IoT, LoRa, Sigfox, and ZETA have emerged. However, as new technologies enter the application and practice stage in the field of the Internet of Things, and the scope of the Internet of Things itself continues to expand, new problems continue to emerge.

For example, as the world's first technical standard established by the ICT camp specifically for IoT, NB-IoT has made slow progress in recent years in the process of entering the field of low-power IoT. It has encountered many difficulties in implementation and other technical rivals. Some organizations even believe that its development has not met expectations and have issued the argument of "from prosperity to decline, disappointing". This has made NB-IoT industry practitioners begin to reflect: Is it a technical problem or an industry problem? From being expected to be the leader of LPWAN to being questioned about its development prospects, how can such an embarrassing situation be broken?

In order to more objectively clarify the development of the NB-IoT industry and identify the barriers and problems, iot101 consulted many professionals who have worked in the NB-IoT field and are now engaged in other fields. Mr. Nicho, who has been rooted in a domestic communications giant for 13 years, participated in the birth of well-known NB-IoT chips, and witnessed the rise and fall of the previous generation of mobile communications, expressed his "chip voice" to the IoT think tank from the perspective of NB-IoT upstream chip development: including a summary of NB-IoT's current chips and market, and views on future trends and patterns.

Strengths are limitations, NB-IoT positioning must be clear

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The fate of NB-IoT, which has gone from being highly anticipated to rapidly gaining ground and then blossoming everywhere until it encountered bottlenecks and slowed down, was foreshadowed by its own technology as early as 2016 or even earlier. This has to start with 3GPP, an organization that combines technical competition and political games.

At that time, NB-IoT took the lead in targeting the communication between things, and was jointly promoted by communication giants such as Huawei, Vodafone, Qualcomm, ZTE, and Ericsson. However, before that, American communication camps such as AT&T and Qualcomm had proposed the evolution route of Cat.1→Cat.0→Cat.M1→eMTC to 3GPP. Subsequently, the two sides competed to evolve in the field of LPWAN, while 3GPP "waited and watched" and allocated several major characteristics of IoT communication to two standards according to "specifications", such as allocating lower costs and wide coverage to NB-IoT, and leaving higher speeds and more functions to eMTC, so that the two formed a complementary situation, and each performed its own duties and was responsible for its own profits and losses in the global market. In the Chinese market, NB-IoT quickly gave birth to a long chain of ecology from chips, operators and industry applications due to some unique advantages.

For NB-IoT, due to the limitation of its technical characteristics, it is subject to certain restrictions in the selection of target scenarios and the expansion of market scale. While enjoying the four major advantages of "low power consumption, low cost, wide coverage, and large connections", the discussion around NB-IoT is inseparable from factors such as extremely low speed, insufficient network coverage, and poor mobility. Therefore, it is not difficult to understand the various problems that arise when its application scenarios are implemented, which is also the "normal" that many NB-IoT supporters and application manufacturers are troubled by.

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The seemingly perfect IoT communication technology setting and the imperfectly matched application scenarios have created a gap between the NB-IoT ideal and reality. For example, in the promising public utilities and smart city construction, meter reading, smoke detection, and electric vehicle anti-theft have become the most typical applications, with an annual incremental market of tens of millions, followed by manhole covers, trash cans, etc. For consumer IoT, local scenarios (such as smart homes) account for the majority, and are generally centered around people. Whether it is the power supply environment, data usage frequency, or the number of terminals (smart hardware), these conditions are not areas that NB-IoT excels in; for wide-area consumer scenarios (such as health and tracking), they are often accompanied by mobility and requirements for network coverage, so it is difficult for NB-IoT to replace 2G in a short period of time.

For the enterprise IoT market, NB-IoT under licensed spectrum cannot meet the enterprise's requirements for the integrity and closedness of its own data. Therefore, it is more likely to provide a supplementary network rather than a main network in non-critical, low-frequency business scenarios.

Why is the road to NB-IoT innovation so crowded?

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In a mature industrial ecosystem, the driving force of market and demand is undoubtedly the most important link, but the current scenarios and coverage requirements that NB-IoT can support are still relatively narrow. The weakness of this driving link makes it difficult for the various innovations in the upstream links of NB-IoT (hardware performance, integration, customization, price, network optimization, etc.) to be implemented, and the links such as chips, modules, and suppliers are struggling in the price war and are difficult to make profits. The entire ecosystem seems to be constantly innovative but lacks vitality.

In summary, facing the current technical indicators, application scenarios, market size and other limitations, the upper limit of the NB-IoT chip industry is obvious. In contrast, the "enthusiasm" of the NB-IoT chip entrepreneurs in China has exceeded the saturation capacity of the current market, especially under the influence of the "lack of core and soul" series of global technology wars, this enthusiasm continues to rise. Therefore, it is not difficult to speculate that the gap between the "supply side" and the "demand side" will continue to intensify the unhealthy competition in the upstream of NB-IoT, including chips, modules and even operators.

Nicho believes that in the future, as the NB-IoT standard is finalized, the competition among chip manufacturers will become more intense until the basic pattern is formed. Among them, the most important competition may focus on three aspects: cost, integration and performance. With the further integration of the industrial chain, the division of labor in chips, modules, MCUs and other links will also become clearer, which will promote the continuous improvement of NB-IoT chip integration, continuous cost optimization, continuous convergence of performance in iterations, and continuous compression of innovation space, which will eventually achieve hardware standardization.

If this speculation is followed, in the mature NB-IoT industry system after the reshuffle, the already limited NB-IoT market will be controlled by a few NB-IoT chip companies that have both market insight and technical strength. Therefore, the current crowded NB-IoT chip market can be said to be an extremely unstable "false high point". Whether it is internal competition in the chip link or the actual market capacity of NB-IoT, it is very easy to break the current "balance" and prompt NB-IoT chips to quickly advance towards standard products.

Conclusion

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Finally, we can't help but ask ourselves, is NB-IoT, an IoT communication standard born with a silver spoon in its mouth, bound to escape the fate of starting high and ending low and ending bleakly?

When talking about the way out for NB-IoT, Nicho believes that the person who tied the bell must solve it. NB-IoT is limited by performance indicators and cannot meet the needs and scenarios, so we need to start from these two aspects. As for some changes brought about by external forces (such as further cost reduction, 2G network withdrawal and other "favorable" factors), it is difficult to make a breakthrough and it is not a long-term solution.

At present, NB-IoT has been included in the candidate technology of 3GPP's 5G standard proposal, and eMTC will also likely become a member of the candidate technology set. Therefore, both have room to show their talents in the future 5G mMTC scenario. Therefore, if NB-IoT can make a "leap forward" in terms of standards in the future, such as removing the rate limit, reasonably adjusting the functional parameters, or integrating with eMTC in terms of technical performance, it will be beneficial to open up a good situation on the demand side. NB-IoT does not have to be like a "frog in the well" and focus on narrow transmission scenarios, running around in the bottomless price war to "cut the feet to fit the shoes". At that time, NB-IoT and eMTC are expected to be included in mMTC together. The improvement of the protocol can promote the expansion of downstream industry application scenarios and business model innovation. At the same time, it will also gather the strength of many global operators to jointly promote the ecological integration of low-power Internet of Things.