Last week, LoRa chip company, Semtech, made several announcements that should accelerate the IoT market. First, it announced LoRa Basics Modem-E, which is a software modem. Second, it announced relationships with IoT companies, Actility and Tago.IO that surround services that can be offered to drive the IoT market. Third, the company announced the LoRa Edge Tracker Reference design, which is a "device to cloud" reference design for asset tracking applications. In our IoT research, we have forecasted a near-doubling each year over the next five years for LoRa and competing devices. We believe Semtech's recent announcements as driving the market because they make it easier, cheaper and faster to deploy IoT services.
The LoRa Basics Modem-E allows customers to use modem capabilities from Semtech, where previously the customer would have had to have developed this technology itself or commissioned a third-party software design house to develop it for them. We see it as a slight increase in the "footprint," or addressable market in each IoT device that benefits Semtech. However, Semtech's Director of LoRa Product Line Management in Semtech's Wireless and Sensing Product Group, Sree Durbha, explains, using the Modem-E can reduce the total cost of ownership of an IoT application by as much as 47% over three years for a deployment of ten thousand devices or more. The savings come from both up-front savings and ongoing savings. Upfront savings are from being able to use a smaller microcontroller unit (MCU) with a smaller footprint, reduced non-recurring engineering (NRE) spending to develop the modem, and reduced certification costs enabled by the LoRa Basics Modem-E. The ongoing savings come from maintenance and testins costs for future modem releases, which Semtech will make available to its customers and partners on a regular basis.
We spent some time discussing the cloud service with Mr. Durbha, as well, and learned that Semtech's LoRa Cloud service can enable geolocation and LoRa device and application services like GNSS almanac updates. We tried to get a general sense for the prices involved on a per device basis and learned that for the asset tracking application, each device can be tracked for under $1/year. There are many variables that come into play like usage rates, for instance, that can change this number.
All told, we think that by offering reference designs, tight relationships with service providers, developing more of the footprint of an IoT system, and reducing costs to customers, Semtech is working to accelerate the IoT market - and of course, its participation with LoRa technology.