Who Pays for IoT Communications?

One pesky and important detail we have yet to fully work out is the business model for IoT appliance business models, for consumer appliances.

If you assume a world where nearly every in-home consumer appliance, and probably lots of other stand-alone sensors to track everything from motion to soil moisture to light levels, often on a “stick it on” basis (put a tracking sensor anywhere you want by peeling off the adhesive), and if you assume connectivity has to be provided, the issue is how that connectivity is supplied, and “who” pays for it.

Amazon provides one model, where the appliance supplier pays for connectivity (mobile network) if Wi-Fi is not available, and then uses Wi-Fi as the preferred connection. In that model, connectivity somehow is build into the use of an appliance (does a purchase become a rental?).

Wi-Fi might be an easy choice, as it shifts payment to the owner of the appliance (user pays for the internet access connection). In a few cases perhaps a third party pays (advertising).

That same model could hold for multi-device IoT plans sold by mobile operators, just as they now sell “multiple-device” plans. That has the user paying.

There are exotic possibilities, such as collaboration between a refrigerator manufacturer and one or more large grocers, where an appliance maker works with the retailer and gets a percentage of automated grocery orders. Those might be relatively complex deals for almost anybody but an Amazon.

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