Semiconductor M&A Accelerates in 2019
by 
Cees Links, founder and CEO of GreenPeak.
If you are involved in the electronic products industry, you are probably swept up into the hype and the promise of the Internet of Things – this includes the Smart Home, wearable, the Industrial Internet of Things- basically any kind of device that can be connected to the internet. By the end of the decade, it has been predicted that billions of homes, people, cars – everything – will be connected to the web. That is a lot of product. That is a great opportunity. But is it going to happen or is the looming standards battle going to put a big hold on all of that?
Whether you are developing or marketing chips, modules, devices or systems, you are probably also aware of the standards battle going on between the various industry groups and large companies regarding how to connect these various components of the Internet of Things.
Right now they are about five major initiatives and dozens of smaller proposals regarding how to connect the various IoT and Smart Home devices and networks. Not only are end users and integrators confused, but the makers of Internet connected deices are confused as well.
In the past, technology standard wars have been proven to slow down the speed of technology development. Remember VHS versus Beta? WiFi versus HomeRF? WiFi versus Bluetooth? When the industry is shattered and fights among itself, it cannot move forward.
Even the winners suffer from long delays of market acceptance and growth!
This article will help make sense out of all the battles that are going on. Below is an overview of the most important contenders around the IoT Wireless Communication Standards.
Overview of the different IoT wireless communication standards (mapped on the ISO layering model).
This is a not a complete overview of ALL the various technologies at play. Although they play an important role in the IoT (and the so-called M2M business), we have left out communication standards based upon cellular technologies as well as RFID. We are also not including what we call “pseudo” standards that are based upon proprietary technologies offered by companies like ANT+, Z-Wave, EnOcean and others, for the simple reason in the battle between true international standards and “standards” promoted and provided by only one or two companies, the international standard always wins out and the proprietary technologies dwindle away.
For example - Home RF versus Wi-Fi. Heavily promoted by Intel and Proxim, HomeRF for wireless home networking never caught on as companies preferred a single standard that could be used almost everywhere in the world and was available from an assortment of chip makers.
However, first mover proprietary pseudo technologies are useful because they are essential for opening up and creating markets and customer awareness, but they usually end up disappearing as the mass of vendors moves to a single standard.
Currently, the IoT standard battlefield can be split up into three horizontal (combinations of) layers: (1) the Physical/Link Layer (“the connector”), (2) the Network/Transport Layer (“the wireless cable”) and (3) the Application Layer.
Physical/Link Layer battles includes such well known and established technologies such as ZigBee, Bluetooth and Wi-Fi. In this layer, all the contenders are open worldwide IEEE based standards. However, each standard is trying to capture an as large as possible application domain, but all three - IEEE 802.11/WiFi (content sharing and distribution), 802.15.4/ZigBee (low power sense & control networking) and Bluetooth (wearables) seemed to have found their core application space, and will be with us for quite a time to come.
The Network/Transport layer is a somewhat more obscure area, that in the past, was dominated in the past by companies like LAN Manager (IBM, Microsoft), Netware (Novell) and a few others until this field was “democratized” by the IETF with TCP/IP, as we know from IPv4 or more recently from IPv6, presented as the IETF contribution to the IoT. The IETF also has produced a standard that is called 6LoWPAN (IPv6 over Wireless Personal Area Networks), essentially adding network meshing capabilities to IPv6.
6LowPAN was recently adopted by Google/Nest as part of Thread, giving it instant credibility and putting it into direct competition with ZigBee PRO - yet another contender for this space.
Both ZigBee PRO and Thread (based on the same IEEE 82.15.4 Physical/Link Layer) have certain advantages over each other. Thread is well integrated in the IP world. In comparison, ZigBee is enabling the development of products with long battery life (it uses very little power) and very low cost (little memory requirement), while also very capable of bridging into the IP world.
Google/Nest Thread Alliance is working hard to incorporate new industry members to build momentum, but the uptake has been relatively slow: 50 members so far, where ZigBee has more than 400 members. Interestingly, reflecting the industry’s confusion and the need for device makers to have as many irons the fire as possible, many of the Thread members are also ZigBee members!
Until the Thread standard is published in Q2 of 2015, this situation will continue to be unclear, and as indicated earlier, it is creating an anxious wait-and-see attitude in the IoT market that is essentially slowing down development of the IoT and smart home market.
Making this situation even more confusing, Bluetooth is also entering this war at the Network/Transport Layer.
Within the Bluetooth SiG, there are serious efforts to make Bluetooth “networking capable”. They are to enable its networking layer to support not only a set of “wearables” around a single device, but extend this to a larger set of independent devices working together in a mesh network.
The question is whether this is technically possible (for engineers: Bluetooth is “connection oriented”, while WiFi and ZigBee are packet oriented), and if so, if it will really work as good as what is already available in the market. At this moment the main differentiator of Bluetooth meshing just appears to be the Bluetooth logo.
To many in the industry, this effort looks like a repeat of an earlier effort (around 1997-2000) of Bluetooth to displace WiFi (“Bluetooth will wipe WiFi from the face of the earth, was the slogan that time – but everyone seems to have forgotten that). At this moment the new and improved Bluetooth appears more like an effort driven by engineers searching for an interesting project rather solving a true market need. I would not be surprised to see this new initiative disappear, just as years ago, Bluetooth stopped competing with WiFi.
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