• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Corporate America has been draining the world's water. Matt Damon's new campaign calls on Gap, Starbucks, and Amazon to help give it back

2

When SpaceX starts trading, some 'shareholders' will discover they own nothing at all

3

Analysts expected oil to surge above $200 but China has quietly kept prices half of that—and can’t for much longer

1

Corporate America has been draining the world's water. Matt Damon's new campaign calls on Gap, Starbucks, and Amazon to help give it back

2

When SpaceX starts trading, some 'shareholders' will discover they own nothing at all

3

Analysts expected oil to surge above $200 but China has quietly kept prices half of that—and can’t for much longer
TechInternet of Things

Will mobile carriers bend their metrics for the Internet of Things?

By
Stacey Higginbotham
Stacey Higginbotham
Down Arrow Button Icon
By
Stacey Higginbotham
Stacey Higginbotham
Down Arrow Button Icon
March 11, 2015, 4:00 PM ET
Courtesy of Bluesmart

Mobile carriers haven’t been eager to add connectivity to hot new devices, because the the price of data for a connected pill bottle or watch is so low that they would crush the “average revenue per user” (ARPU) metrics they brag about to Wall Street. But, thankfully, it all might be changing.

In the past month I’ve seen four new products come to market with cellular connectivity — three of which are from startups. And each of the startup founders has a story to tell about the challenges he faced getting an operator to provide the cellular data for his product.

Spark Labs, which makes development boards that help companies prototype connected devices, announced a new board via Kickstarter at the end of February called the Electron that comes with a $2.99 cellular plan. Electron met its funding goal in 25 minutes, but the campaign was more about raising awareness than money (given that Spark had already raised $8 million in venture backing). At the launch of the campaign, Spark had one undisclosed Tier 1 carrier but, after almost two weeks on Kickstarter, CEO Zach Supalla says he has had conversations with several more.

“There’s a small number of people who matter in this world,” Supalla said. “But when we announced our campaign to the world, all of those people can find you and they did. And that has been awesome for us and made it so much easier for us to work in this space.”

Ben Forgan, the CEO and founder of Chicago-based Konekt, had a similar experience when he was trying to build a connected device several years ago. He went to one of the traditional M2M providers like Jasper Wireless or RACO Wireless trying to get cellular connectivity. What he found was that they weren’t interested in pricing out modules or connectivity for such a small company or production run. And since Spark Labs’ development boards weren’t around yet, he didn’t have that as an alternative.

So in 2013 he founded Konekt to build a global SIM card for startups, and signed a deal with Telefónica (TEF) to offer the connectivity startups need on an on-demand basis. Forgan said he’s still working to get other operators signed up, but it’s a slog given carrier concerns with metrics such as ARPU.

For wireless companies, ARPU is typically around $33 for a cellular customer but is dropping across all four major U.S. carriers, according to Chetan Sharma, president of wireless research firm Chetan Sharma Consulting. Connected cars have ARPUs similar to smartphones, but devices such as connected watches are closer to $5, which is why operators are eyeing them with some caution. And if you look at the pricing on the Electron at $2.99, that’s even less.

unnamed

Meanwhile, at Mobile World Congress, we saw Bluesmart launch a device that sums up both the struggle for startups and the promise for consumers. Any world traveler has probably seen Bluesmart’s connected suitcase, which comes complete with a tracking device, a phone/laptop charger and an integrated scale to let you know if you’ve over-packed. At MWC, the company announced that it signed a deal with Telefónica to add cellular connectivity so you can track your suitcase almost anywhere in the world where Telefónica has a network. Cellular tracking is far superior to the more common Bluetooth tracking available from companies such as Tile or Trakdot.

The cellular tracking will be integrated into the $299 price tag of the suitcase. I’ve played with the luggage and it’s a pretty sweet (and surprisingly light) bag. As a consumer, I love it. But Bluesmart CEO & Co-founder Diego Saez-Gi explains that getting the cellular connectivity wasn’t easy: “It was a very interesting process. We spoke with several carriers including all of the largest telecommunication companies in the world. We learned that these companies are all very interested in participating the rise of the Internet of Things, but pricing and models for this new era are still being defined.”

As for choosing Telefónica, Saez-Gi said it was the most flexible and was willing to commit to Bluesmart’s vision. That jibes with Sharma’s take on the carriers that are doing the best at making the complicated transition to the Internet of Things as well. He points to AT&T (T) and Telefónica as being the furthest ahead with formal programs and actual customers. However, he also points out that it’s still a very small business for carriers at less than a $1 billion per year for most of them. AT&T has 18.5 million connected devices on its network (although 2.8 million of those are connected cars). If you take out the cars, you’re still looking at a $1 billion annual business for AT&T.

“Given the current state of the business they are more focused connectivity rather than something more clever, he said. “Everyone is flexible in how they price their wholesale and is trying things out at much smaller scale, but obviously it’s not a big focus for the operators.”

However, as the Internet of Things becomes more popular and the threat from Wi-Fi calling plans from the likes of Google (GOOG) or Cablevision (CVC) mount, perhaps carriers will soon become a lot more flexible. After all, no carrier wants to miss out on the the next Tesla or the mobile equivalent of the Nest thermostat.

About the Author
By Stacey Higginbotham
See full bioRight Arrow Button Icon

Latest in Tech

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Tech

Elon Musk stands behind the Nasdaq opening bell and in front of a "SpaceX" background.
Future of WorkElon Musk
Despite his new trillionaire status, Elon Musk says money ‘will stop being relevant’ in the future because of AI
By Sasha RogelbergJune 12, 2026
2 hours ago
AI was supposed to cut health care costs. One of its first jobs was charging you more, PwC report shows
AIHealth Care Service
AI was supposed to cut health care costs. One of its first jobs was charging you more, PwC report shows
By Whizy Kim and Tech BrewJune 12, 2026
2 hours ago
paul
AIWorld Cup
Machine learning gives the U.S. a 1% chance of winning the World Cup final in its own backyard
By Achim Zeileis and The ConversationJune 12, 2026
2 hours ago
DoorDash wants you to stop scrolling and just tell its new AI chatbot what you’re hungry for
RetailDoorDash
DoorDash wants you to stop scrolling and just tell its new AI chatbot what you’re hungry for
By Dave Lozo and Morning BrewJune 12, 2026
2 hours ago
Man in a blue shirt gesturing
AIBrainstorm Tech
AOL cofounder Steve Case on AI— major upside, real risk, and ‘probably a net negative’ for jobs
By Amanda GerutJune 12, 2026
3 hours ago
Astronaut costumes, teenage crypto millionaires, and a $300 million bet: Scenes from the SpaceX IPO
AISpaceX
Astronaut costumes, teenage crypto millionaires, and a $300 million bet: Scenes from the SpaceX IPO
By Eva RoytburgJune 12, 2026
3 hours ago

Most Popular

Corporate America has been draining the world's water. Matt Damon's new campaign calls on Gap, Starbucks, and Amazon to help give it back
Environment
Corporate America has been draining the world's water. Matt Damon's new campaign calls on Gap, Starbucks, and Amazon to help give it back
By Catherina GioinoJune 9, 2026
3 days ago
When SpaceX starts trading, some 'shareholders' will discover they own nothing at all
Investing
When SpaceX starts trading, some 'shareholders' will discover they own nothing at all
By Jim EdwardsJune 12, 2026
10 hours ago
Analysts expected oil to surge above $200 but China has quietly kept prices half of that—and can’t for much longer
Energy
Analysts expected oil to surge above $200 but China has quietly kept prices half of that—and can’t for much longer
By Sasha RogelbergJune 10, 2026
2 days ago
Current price of oil as of June 11, 2026
Personal Finance
Current price of oil as of June 11, 2026
By Joseph HostetlerJune 11, 2026
1 day ago
American taxpayers have spent $33 billion on sports stadiums. They got fewer seats—and higher prices
Success
American taxpayers have spent $33 billion on sports stadiums. They got fewer seats—and higher prices
By Catherina GioinoJune 11, 2026
1 day ago
Current price of oil as of June 12, 2026
Personal Finance
Current price of oil as of June 12, 2026
By Joseph HostetlerJune 12, 2026
8 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.