21 April 2010

AT&T and the Internet of Things

This item over at GigaOm is interesting. To me, beyond the numbers, the most interesting observation was this:
The irony here is that M2M connectivity in many ways represents the dumb pipe future that AT&T is so worried about — it’s not providing anything to its partners but the bits. On the call, AT&T executives explained that the number of bits sent via the network are high-margin bits and the machine-to-machine clients have very low churn.
Customer acquisition costs in wireless are quite high, so low churn is a rational cost management strategy. The observation is right that M2M clients would not turn over very fast, if at all.

No comments: