Will Carriers Be Big Players in the Internet of Things?

Qiq connected insole

The number of mobile devices using integrated wireless broadband is expected to top 2 billion by 2014, according to research firm In-Stat. That forecast represents an 11 percent cumulative annual growth rate in the number of devices that demand wireless services — yet the carrier networks are already struggling to keep up with demand from existing devices.

Perhaps the wireless infrastructure issue would be lessened if we only used smartphones, but increasingly, people are buying other types of devices with wireless capabilities; the average U.S. or Canadian consumer has 1.3 cellular connections, for example. Smartphones are the obvious leader of the pack in terms of sheer numbers — research firm Gartner (s it) predicts more handsets than computers will be sold by 2012 — but laptop data cards, portable hotspot devices and e-book readers are eating up the wireless pie, too. Even feature phones, which are still expected to outnumber smartphones in the U.S. until the end of 2011, are nibbling away at the broadband supply. For more examples of non-traditional connected devices, here are seven I never even imagined — among them smart insoles or ski-run trackers.

But the rise of connected devices fighting for wireless connectivity isn’t all doom and gloom. In-Stat highlights a key point in the transition and usage of new 4G technologies, and suggests that “smartphones and computing devices are the only devices expected to transition to 4G technologies over the next five years.”

If that holds true, it will help manage wireless supply with growing demand in several ways. As illustrated in our GigaOM Pro report on the topic (subscription required), 4G technologies such as WiMAX and LTE offer spectrum efficiencies not found in today’s 3G networks, which helps to reduce network congestion. And while such a transition will force service provides to run multiple networks for some time — they’ll still need 3G for e-book readers and those intelligent insoles — devices such as smartphones and laptops requiring faster pipes will use 4G and free up existing 3G resources for less data-intensive mobile gadgets.

Plus, in comparison to the totality of connected gadgets as estimated by Intel (s intc) (5 billion today) or Ericsson (s eric) (50 billion by 2020) 2 billion by 2014 on cellular networks isn’t too crazy. In fact, in that light, it looks like cellular operators should aim to take a bigger slice of the connected gadget pie.

Image of Qiq Insole courtesy of 24eight

This article also appeared on BusinessWeek.com