Wireless War Erupts Over 'Internet of Things'

By Don Clark

Cellular and Wi-Fi networks are good for connecting smartphones, tablets and laptops. But different technology may be needed when things such as parking meters and vending machines need to communicate.

That is the thesis driving a crop of companies promoting a new breed of wireless networks. Silver Spring Networks Inc., a Silicon Valley company best known for developing systems that let utility meters transmit data on energy usage, is the latest to unveil a plan to connect a variety of industrial and consumer machines collectively known as the Internet of Things, or IoT.

Mike Bell, a former executive of Intel Corp. and Apple Inc. who recently became the company's chief executive, on Wednesday announced plans to reach a broader audience with an international wireless network called Starfish. Mr. Bell debuted the technology in San Jose, Calif., where Silver Spring intends to establish one of its first Starfish installations to let everyday objects share data about their activities and surroundings.

Silver Spring's announcement--which caused its shares to jump 6% on Wednesday--followed a collaboration announced in October between the city of San Francisco and SigFox, a French company with its own IoT network technology.

Plans for other new IoT networks have been discussed by vendors such as Ingenu, a San Diego-based startup, and a group of companies backing a technology dubbed LoRa that was developed by Semtech Corp., a chip maker in Calabasas, Calif.

These efforts share some common assumptions. One is that short-range wireless standards such as Wi-Fi and Bluetooth won't work for many IoT applications, such as connecting tractors to sensors used by farmers or industrial equipment arrayed across broad geographic areas.

Another assumption is that long-range cellular networks are too costly and draw too much power to do the job. Where smartphones that send videos and data files need high-speed networks, many IoT devices may send just a few small packets of data several times a day. Backers of the new IoT networks quote battery life of 10 years or more for connected devices.

A lot of money could be at stake. Market researcher Jim Morrish, founder of Machina Research, thinks the total market for the new wireless networks could total $20 billion by 2020.

Cellular carriers have been working on lower-powered variants for IoT applications, and the new entrants are spurring them to move faster.

"It has caused the operators to wake up," said Dan Shey, an analyst at ABI Research.

Stephen DiFranco, a senior vice president at communications chip maker Broadcom Corp., predicted that the incumbent cellular networks eventually would dominate IoT applications. As for the new entrants, "we don't agree with the path they are going down," he said.

Mr. Bell, who led Intel's efforts in putting chips in devices such as smartwatches and fitness trackers, thinks Silver Spring has a head start in the field, having helped set up utility networks that connect 22 million devices.

He also touts what he regards as a technological advantage. Most wireless networks operate in what is sometimes called a hub-and-spoke arrangement; remote devices communicate with individual base stations that are connected to the Internet. Silver Spring, by contrast, operates a mesh network that passes signals along a grid of antennas. The company says the approach makes its potential range nearly limitless, while two individual devices can send data up to 50 miles.

Silver Spring uses technology specified by an industry standard-setting group. Mr. Bell said standardization will allow companies other than Silver Spring to make Starfish-compatible transmitters.

"We will be just as happy when other devices are available," he said.

SigFox developed proprietary technology but has licensed it to multiple chip makers, said Allen Proithis, president of that company's North American unit. The LoRa alliance claims 175 member companies and plans for 12 IoT networks, said Hardy Schmidbauer, Semtech's director of wireless products.

Ingenu, originally called On-Ramp Wireless, has raised more than $100 million in funding. The company's proprietary technology has advantages such as battery life of up to 20 years for IoT devices using its network, said Chief Executive John Horn.

Some rivals think the slow speed of the new networks poses a serious problem. One is Sensity Systems, a Silicon Valley company promoting IoT networks based on Wi-Fi connections. "You need video--and you can't run video on low bandwidth networks," said Chief Operating Officer Sean Harrington.

Write to Don Clark at don.clark@wsj.com

(END) Dow Jones Newswires

December 09, 2015 18:52 ET (23:52 GMT)

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