Massive IoT
We are very confident about our Massive IoT business and we believe the ramp in Massive IoT will support a high rate of overall growth for the next few years because we are securing major design wins and the momentum is there . . . but a certain amount of patience is required to operate successfully in this market. We know many of you are frustrated, just as we are, with how long it is taking to see the Massive IoT market growth accelerate. Covid-19 was a headwind in 2020 that was a temporary drag in a few places, but the ramp IS happening.
We are SO far ahead of where we were a year ago:
- We are winning bigger projects with bigger companies and filling the pipeline with even more exciting opportunities, 7
- We have solved the problem of how to address a fragmented market efficiently, and we are extending our reach through mutuallybeneficial partnerships . . . and
- We are completing the second generation of our products which will strengthen our competitive advantages and enable customers to transition seamlessly into a 5G world.
Going into a little more detail, our Massive IoT revenue stream coming from our existing base of Cat 1 and Cat M/NB customers is doing well and growing. The business with Gemalto, our largest module partner, is performing well and we have with them a large number of secured design wins in the US and Japan with both Cat 1 and Cat M/NB technologies. As an example, the second phase of a major metering project in Japan we are addressing with them has been finalized. It will begin next year and last for about 18 months. Also, we are reaching the launch phase of another major design win with them. On the other side, our module business in the automotive segment, such as tracking and fleet management, is coming back after being affected by Covid . . . and we continue to see a strong order pattern from our customer who is building infectious disease testing devices.
Some of the Cat M projects we have in hand which were delayed by the pandemic situation are now reaching the launch phase with initial orders received. In Q3, we have secured a new customer designing two healthmonitoring devices and the pipe of opportunities keeps building with highquality customers. We are gaining traction in the metering space where our Monarch SiP has some distinct advantages over competing solutions. We mentioned a major metering project using our Monarch platform on our last call, and we can now say that this is a deal with Itron and we have finalized the product supply agreement this quarter.
Meanwhile, Monarch 2, the second generation of the Monarch platform has been sampling to a few customers for evaluation and is about to enter carrier certification. The feedback from customers is outstanding and two of them have selected this chip for new projects. We are consistently better than the competition in several respects. We have industry-leading power consumption, which we have further reduced with Monarch 2. The platform also features a highly-secured integrated SIM capability and low voltage operation down to 2.2 volts that allows for optimized low-cost battery selection. We expect this new platform to be a strong factor in the growth of our Massive IoT business over the next several years.
We have a lot of interest in our Cat 1 second-generation Calliope 2 platform, which will be sampling early next year. We are developing an excellent pipeline of opportunities as the only non-Chinese vendor with a low-power Cat 1 offering coming to market. The Cat 1 speed and voicesupport capabilities make such technology ideal for some IoT devices such as security systems and wearable and hearable applications.
One thing that has been reinforced by our experience so far: while the time to-revenue can be very long for certain applications, the business, once it’s been won, is also very sticky. For example, new medical devices must go through a long, comprehensive approval process not directly related to the cellular connectivity. There is also a very long qualification process for smart meters. These approvals and qualifications are in addition to the certification required by carriers before any of these devices can run on their network. However, on the positive side, customers will not be quick to switch vendors because it will require them to start the process all over again. Once we are deeply involved in a project with a customer, even if it hasn’t launched, they are not likely to be swayed by a promise of something “just around the corner” by a competitor. Furthermore, we have succeeded recently in displacing other vendors in situations where the competitor failed to deliver what they promised. Another key lesson we have learned as a pioneer in Massive IoT is: when it comes to new designs and applications enabled by new 4G/5G technology, it has to be easy to incorporate into the design of the device. Providing a development kit or a pre-integrated platform reduces complexity and design cost for the customer. This is where we have made great progress during the year.
For example,
- With Avnet, one of our distribution partners, we recently combined Monarch GO with a widely used and understood development environment called Raspberry Pi HAT. HAT stands for “hardware attached on top” and enables Monarch GO to be plugged directly onto the Raspberry Pi board, which vastly simplifies the development of many types of IoT applications.
- We announced bundling our Monarch platform with microcontrollers from several large top-tier MCU partners such as Microchip, NXP and STMicro and integrating the software as a first step toward offering more integrated solutions with some of them. Just last week we added a new MCU partner, Renesas, one of the largest microcontroller companies. They will offer a variety of modules based on our Monarch technology creating a complete and unique integrated hardware and software solution that is ready for use. This will save customers both time and money. You will be hearing more 10 about various types of more-integrated solutions over the next several months.
- In addition to simplifying the process of adding cellular connectivity to IoT devices, these partnerships greatly enhance our go-to-market strategy and will enable us to penetrate the IoT market faster by extending our reach to all corners of this very fragmented market.
So, to summarize, what will make a real difference in the Massive IoT business next year:
1) Our second generation Cat M/NB product is very successful based on the great feedback we are getting from customers and the first design wins we have secured so far. This new platform should maintain our technology leadership and increase our design win rate. Also, we will have a unique and differentiated position with our next generation Cat 1 product that will help us covering all the spectrum of Massive IoT applications.
2) We now have several mutually-beneficial partnerships with large marquee companies that ship billions of microcontrollers for IoT devices every year, and we are just beginning to scratch the surface of what can be accomplished with them. |
