IoT is now growing faster than smartphones

U.S. mobile carriers added more cars than phones to their networks in the second quarter

If there were any doubt that IoT is for real, one fact ought to dispel it: For the first time, U.S. mobile operators are adding IoT connections to their networks faster than they’re adding phones.

In fact, cars alone are getting connected to cellular networks faster than anything else, according to statistics compiled by Chetan Sharma Consulting for the second quarter of this year. Counting all U.S. carriers, about 1.4 million cars got connected to cellular networks in the quarter, compared with 1.2 million phones and less than 900,000 tablets.

The second quarter, between April and June, isn’t a high point for new phone sales like the fourth quarter, when holiday shopping hits and new iPhone models roll out. But IoT growth has been a long-term trend.

AT&T, the carrier that’s led in connected cars, has already been adding them faster than phones and tablets combined for seven consecutive quarters, says Sharma, a longtime mobile industry analyst. AT&T’s on track to reach 10 million car connections soon, he said.

For now, most of those cars have been tuning in without their drivers lifting a finger, Sharma said. It’s the car companies that are rolling out vehicles with live cellular connections, which can help them do things like monitor the condition of their cars, update the software on board, and learn things that could help them improve future models. Keeping vehicles online may also reduce the need for expensive recalls where cars have to come back into the shop.

It’s taking a little longer for consumers to start using the cell services in their cars. One reason is that people already drive around with a network connection through their cellphones, which can even provide a pipeline for vehicle data through IoT device-and-app combinations like Automatic.

At the same time, the business model for how consumers would use and pay for a car connection is still being hashed out, Sharma said. No one quite knows what drivers will find indispensible about having a connected vehicle or how much they’ll pay for it.

Connected cars aren’t the only use of cellular IoT. There are also more advanced services, like fleet management and tracking of shipping containers, plus smart-city applications like connected lights and parking meters. And the trend extends beyond the U.S. The country’s biggest carriers offer international IoT services, and a handful of other big operators around the world, such as Vodafone and China Mobile, are also building up big IoT operations.

Sharma’s quarterly report also showed how successful mobile data as a whole has become in the U.S. In the second quarter, it accounted for more than three-quarters of mobile carriers’ revenue for the first time. It helps that the U.S. is No. 3 in the world for mobile data consumption per subscriber, per month, according to Sharma. Only people in Finland and South Korea use more.

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Stephen Lawson

IDG News Service
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