French IoT company Sigfox claims 6.7 million active devices in the field (“not counting proofs of concept, just commercial rollouts in diverse industries”), in 63 countries on five continents. It has set an ambitious (bonkers, surely?) target of one billion connections by 2023, under the strategy-moniker ‘1B23’. The giddying ramp-up starts now, it says.
Sigfox has reached its present count, up from 3.9 million in October 2018, in just five years. It seems decent going, even if the figure is disputed in certain quarters, and the company has a history of extravagant targets – even its latest count, of 6.7 million, is a way short, in fact, of its 2018/19 year-end target of eight million.
But a billion? By 2023? How is that even a forecast – even in a market pegged to reach 50 billion devices by 2020 (in just six months)? It sounds outrageous, just as a show of ambition. Not so, says Sigfox; the company’s sales pipe for tracking solutions is backed-up, and demand for it as a fall-back for wideband cellular is bursting.
“That is our corporate vision. We are putting together all possible means to achieve that,” says Laetitia Jay, chief marketing officer at Sigfox. “We’ve had quite steady and sustained growth. But we’ve got a huge backlog – contracts signed. So the rampup is coming now. We will grow quite quickly in the next two years, as massive deals being signed now start to rollout.”
Jay references the recent contract with DHL to connect 250,000 roll containers in Germany. All 250,000 will be retrofitted with with Sigfox trackers within six months, according to the parties involved. “Our deals are not in the 10,000-range, but in the six-digit range,” she says. Asset tracking is the key for Sigfox; it signed with Dachser, Getrak, Michelin, NEC, Netstar, Groupe PSA and Total in 2018. Sigfox is “100 per cent a viable solution to digitalise industrial patrimony,” it crows.
Much of its new business is around tracking containers in the automotive sector – and not just tracking the autoparts they carry. New “six-digit” arrangements in the next months and years will bring annual growth of about 30 per cent, it calculates. But 30 per cent does not get you to 1B23, as the target is defined. “There is a mid-term objective of 100 million objects, which should be reached by 2021,” says Jay.
Something is awry, either in its maths or our figuring. Compound annual growth, from a standing start of 6.7 million today of 30 per cent does not get you to 100 million by 2021, let alone one billion by 2023. If it did, it would leave just three years (2021-2023, inclusive) to get to the billion target.
Jay explains it away. “There are two aspects of it,” she says, returning to this twin strategy of asset tracking and backup connectivity.
“We have a huge number of customers that will start commercial deployment this year, with a fast ramp-up of devices. The focus has been on the automotive sector, to help with supply-chain management. The volume of assets is huge – and it’s just one use case in one industrial sector. There’s a lot of traction in other industry sectors, as well – because they have the same types of issues.”
She says: “That’s the first thing. The second is this ‘0G’ aspect, where we are a complement to other technologies.” The 0G (Zero-G) concept is that Sigfox provides a last-ditch comms pulse for any generation of cellular (through to latest 5G networks) to fall back-on in the event of failure, as well as an alarm system and a safe-guard for IoT providers offering assurances about service reliability.
It is a branded proposition that has grown out of its cornerstone deal with Securitas Direct in Spain, Portugal, and France, where Sigfox affords a reliable alternative in case its ADSL and 3G connections are compromised by burglars. “You can buy $20 jammers on the internet,” says Bertrand Ramé, the company’s senior vice president of international operations. “Securitas has added Sigfox as a third backup.”
Over the last five years, 2.8 million Securitas alarms have been linked to the Sigfox network – a major chunk of its total base, however it is counted. Sigfox has a new 0G-style deal with French operator Free Mobile, part of the Iliad group, which has Sigfox as backup connectivity in its new Freebox Delta, a set-top fibre-box that bundles in Devialet speakers, Amazon Alexa, ZigBee connectivity, and a Netflix subscription.
Jay suggests any head-scratching at its target numbers might be because Sigfox counts differently. “The projection volumes from analysts count the shipments of devices, modules, and silicon. We count existing devices, as well,” she says. The point is Sigfox connectivity can be downloaded into devices that have shipped, and been counted into the market already.
“Sigfox can be enabled over-the-air, to transform a connected device into Sigfox-connected device. That’s what we have done with Securitas Direct. As soon as these devices have the proper hardware – sub 1 GHz radios – then it is possible; you can do anything. You can transform anything, any sub 1 GHz component, into a Sigfox device.”
Its 0G run-rate (2.9 million connections from Securitas, plus growth and new sales, out of a base of 6.7 million, we understand) will remain constant, Jay implies. When Sigfox gets to one billion connections, what proportion will be as a backup network and what percentage will be the primary carrier? “Thirty-to-forty per cent will be backup connections,” she responds.
But one billion still seems absurdly high. We’ve missed something, in fact. Jay splits-out her first point, about the levee breaking under a flood of new deals for supply-chain trackers in the automotive sector, spilling over into parallel markets. There is another aspect to it, she says. Sigfox has forced-down the price of tracking devices during the past 18 months, and forced-open new use cases.
It is one thing to make the business case for attaching trackers to $5,000 shipping containers, carrying finished cargoes; it is another to connect them to $150-$200 roll containers, carrying just their component parts. Sigfox trackers for roll containers are available for about $15, which makes their monitoring add-up. But Sigfox is going much lower, too.
Its so-called Bubble device, a beaconing solution offering indoor and outdoor geo-positioning with 1-10 metre accuracy, is available for less than $5. Meanwhile, Sigfox has been drafted in to work on a sub-$2 micro-tracker with CEA Leti, a nano-tech lab within French research organisation CEA Tech, and Oscaro, an online trading platform for new and used autoparts.
CEA Leti came up with the design, a single-chip, sub-GHz transceiver, called ‘Foxy’, which marries “marginal cost, event-based, massive-scale IoT applications” with long-battery life. It is designed for tracking parcels. Oscaro, described as the Amazon of the car market, is developing the solution, and testing it out; Sigfox is providing the pulse to the hardware/software stack.
“We’re working with our ecosystem to have specific use case where you’ve got a single usage, like luggage tracking, like RFID tags,” says Jay. “That’s where we’re going to have this explosion in the number of devices.”
Which is the way to one billion ultra-narrowband IoT connections, according toi Sigfox. This analysis will be tested in a new report, available next week, on the LPWA market. Look out for it on these pages.
