Satellites could claim larger share of booming IoT market

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MOUNTAIN VIEW, California – The satellite industry could capture two percent of the growing internet-of-things (IoT) market, if companies take a series of steps to appeal to potential customers, said Justin Cadman, partner at Quilty Analytics, a research and consulting firm based in St. Petersburg, Florida, focused on satellites and the space industry.

“We are quite bullish on this opportunity both for incumbent players and some of the new entrants,” Cadman said Oct. 9 at the Satellite Innovation 2019 conference here.

Incumbent players include Iridium Communications, Globalstar, Orbcomm and Inmarsat. Quilty Analytics is tracking about two dozen companies seeking to enter the satellite IoT market.

Satellites now claim less than one percent of the overall IoT market. “We think the potential is somewhere on the order of two percent of the market,” if companies address key obstacles to growth, Cadman said.

First, companies need to replace “high cost, large, power-hungry terminals” and “bring down the cost of service for applications that are highly price sensitive,” Cadman said. Many high volume applications for satellite IoT have not been tapped because terminal and service costs are currently too high, he added.

Another factor is spectrum. “I can’t overestimate the importance of spectrum for IoT,” Cadman said.

Most satellite IoT incumbents rely on L-band for narrowband applications. New entrants are taking a wide range of approaches to spectrum. Careful selection of spectrum is critical because it has implications for terminal size and data transfer, Cadman said.

“S-band, for example, is a terrific band of spectrum for IoT because it has the benefit, in some cases, of being able to … utilize chipsets designed for cellular IoT,” Cadman said.

If any of the companies seeking to enter the IoT market do not have a spectrum strategy, “it’s difficult to see how they will ultimately move forward unless they formulate that spectrum strategy quickly,” he added.

Cadman also emphasized the importance of companies developing strategies to serve specific markets.

“IoT, both satellite and terrestrial, is a handful of very large markets like transportation, for example, and a huge number of smaller markets,” Cadman said. To succeed, “you need to have a go-to-market strategy that’s going to reach the end customer and the integrator and the person who is going to develop that solution. We can’t all be specialists across thousands of applications, it just doesn’t work.”