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Verizon Wireless: Rise of the Machines

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor

The scope of Verizon Wireless 's "open access" network project is finally becoming clear, and it won't -- initially at least -- have much to do with us puny humans. In fact, 90 percent of the devices that are in the process of certification are actually focused on machine-to-machine (M2M) communication.

Machine-to-machine communication generally involves a wide array of sensors, tracking devices, temperature monitors, and other distinctly non-sexy gizmos. In fact, Tony Lewis, Verizon's VP of open development, tells Unstrung that the first two devices that have been certified for open use over Verizon's CDMA wireless network are a storage tank-monitoring device from SupplyNet Communications and a prisoner-tracking electronic ankle bracelet.

This will be followed by a wireless router for the insurance industry and a $69 speech and texting device. Lewis, speaking at the CTIA show last week, noted that this neatly reflected the early devices that are coming up for certification under the open access plans.

"Ninety percent of them are M2M," Lewis said. "The other 10 percent are low-cost handsets and PDAs." (See Where Is Verizon's Open Access?, Verizon Tears Down the 'Walled Garden' and 'Open Access' Gets Closer.)

So why the sudden rise of machine-to-machine for Verizon? "The promise of machine talking to machine was always there, but the question for vendors was 'what network' and how to get on it quickly and cheaply," notes Lewis.

He claims that Verizon's open network plan now offers a "low-cost, low touch" model that appeals to vendors that are looking at applications that require straightforward automation and communication. "I have guaranteed those folks they will be on my network within four weeks," Lewis notes, reflecting on how fast initial devices have gone through the process.

He believes that the open access move could help open up the market for more commercial M2M applications, such as in-home sensors and health care-related products. Sensors in the home could be used for everything from heat regulation to security.

The initial burst of M2M activity doesn't preclude more consumer-orientated open handsets trickling onto the Verizon network as well, Lewis says. "Those [M2M] vendors were smart enough to see what the advantages where and approach us first."

Other handsets could follow soon. "Android, LiMo, Microsoft," says Lewis. "It matters not to me, I love them all."

LiMo Foundation handsets are expected to arrive on Verizon in 2009; there has been speculation about Google (Nasdaq: GOOG)'s Android on the open network. Does Lewis, however, really expect Microsoft Corp. (Nasdaq: MSFT) -- the sworn opponent of all things Linux -- to go open access?

"You never know," Lewis says with a laugh.

Verizon spokesman Jeff Nelson also points out that if an Android device goes through an open network certification for Verizon, it could later become available on the "closed" network as well.

Verizon certainly sees the benefit of running the two networks in parallel, with more device cost breaks and customer support being offered on the regular old closed network. (See CTIA: Open Is the New Frontier.)

"There are 69 million people who do in fact vote with their wallet and say they do, in fact, enjoy closed," Nelson notes.

— Dan Jones, Site Editor, Unstrung

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User Rank: Light Beer
12/5/2012 | 3:32:12 PM
re: Verizon Wireless: Rise of the Machines
Looks a very smart strategy by VZW. Dan, any word on the proportion of devices that are EV-DO versus 1xRTT?

Most machine-to-machine services (telemetry, normally) have historically only required low bit rates and so work fine on GPRS and 1x. IGÇÖd be very interested to hear about applications using 3G.
User Rank: Light Beer
12/5/2012 | 3:32:11 PM
re: Verizon Wireless: Rise of the Machines
Lewis wouldn't talk much about numbers but I got the sense it was mostly applications that don't need much in the way of speed.
User Rank: Moderator
12/5/2012 | 3:32:10 PM
re: Verizon Wireless: Rise of the Machines
M2M device vendors are probably considering 1x-only designs (though the chips are not that much less expensive than EVDO ones), but Verizon may actually prefer devices with EVDO. EVDO, even for low data rates, efficiently uses the channels, while 1x data services are less efficient and reduce the capacity available for voice services (which are still, as far as I know, Verizon's bread and butter).

Device manufacturers and Verizon may have conflicting goals. It's easier to deal with those when one controls which devices are sold for the network. For this "open network" initiative, I don't know how they are dealing with the issue.
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