Another Telecom Giant Acquires LED IoT Company to Capture Trillion-Dollar Smart City Market
Major cities worldwide are planning smart city pilot test programs, and smart city construction supports a vast industry chain. Smart LED lighting fixtures have become the focus of competition among various parties, because LED streetlights not only save energy but also serve as nodes of the smart city IoT. This important strategic position has attracted competition from many parties. Major IT companies include Cisco, IBM; major lighting companies include GE, Philips (Philips), Cree, as well as smart energy vendors Itron, Silver Spring Networks, all rushing to claim their turf. Telecom companies are not falling behind either. The latest to make a major investment is the largest U.S. carrier Verizon, which announced the acquisition of LED IoT startup Sensity Systems (hereinafter referred to as "Sensity").
Founded in 2010 and located in Sunnyvale, California, Sensity is a company that provides smart LED lights for streets, airports, shopping centers, and more, striving to seize the opportunity of the global transition of urban lighting to LED lights. The Climate Group has called for "every city and public facility" to switch to energy-saving LED lights by 2025. Currently, some major cities and their metropolitan areas have already started and are doing well. New York began replacing its streetlights with energy-saving LED lights back in 2015.
Sensity says that in the future, cities will use tens of billions of LED lights, and Sensity will become a high-speed IoT platform providing multiple services. Light owners can embed network technology into their systems, thereby introducing a series of sensors to test humidity, ambient light, seismic activity, radiation, wind speed, temperature, air quality, and even available parking spaces. All these functions are supported by a high-bandwidth wireless network that supports both peer-to-peer and mesh networking. Sensity says 42 smart cities around the world have already adopted this technology.
Hugh Martin, Chairman and CEO of Sensity, mentioned in a press release: "Around the world, rapid urbanization has placed a heavy burden on city services. The infrastructure that provides critical social services is aging and becoming less efficient, including firefighting, emergency services, public transportation, lighting, sewer systems, and sanitation systems. Sensity has long recognized that the Internet of Things will be the key to breaking this impasse."
Verizon has been very active in the IoT space. In addition to this acquisition of Sensity, in October 2015 it launched the ThingSpace platform, offering developer tools, application programming interfaces (APIs), big data engines and other services to help IoT developers build solutions. In February 2016, Verizon opened the ThingSpace platform to all third-party developers. Verizon has also partnered with other telecom giants, including Nokia and Ericsson, to develop low-power, low-bandwidth IoT core network technologies. Verizon has participated in many smart city pilot programs in major cities around the world, providing solutions for the internal IoT communication network infrastructure of cities and utility companies. For example, in 2015 Verizon launched the 4G LTE-enabled "Grid Wide Utility Solutions" cloud platform, allowing utility companies to manage smart meters, demand response, meter data management, and transmission and distribution monitoring and control on a single cloud platform.
Building on its previous work in IoT and smart energy, Verizon has decided to make another move by acquiring LED IoT startup sensing system company Sensity. Sensity has already installed more than 40 systems, and through Verizon's prior partnerships with city governments and utility companies, the company can expand the market space for Sensity's smart LED street lights.
Currently, cities around the world install LED street lights mainly for energy savings and reduced electricity costs. There are still relatively few cases where sensors and IoT communication devices have been added to LED street lights and put into practical use. In fact, once installed, there can be many applications, such as providing smart parking services. On the other hand, as sensor prices continue to fall, cities interested in investing and installing such systems are also worried about "buying early and losing out," and are unsure about when to invest.
As the largest wireless network provider in the United States, Verizon is actively investing huge amounts of capital to build infrastructure that can connect every aspect of cities. This most clearly demonstrates that the IoT is not a passing fad, and can be expected to accelerate the development of the smart city industry.
"As an IoT solutions company, Sensity serves smart communities within a powerful partner ecosystem. This collaboration will accelerate the implementation of large-scale projects and drive digital transformation in cities, universities, and venues," added Mike Lanman, Verizon's Senior Vice President of Enterprise Products and IoT.
Prior to this, Sensity had received over USD 70 million in funding.
Currently, Verizon's acquisition of Sensity is expected to be completed in the coming months.
In fact, it is not only foreign players that are staking out this market—domestic players are doing the same. It is understood that to date, there are already 193 "smart city" pilots in China. The trillion-dollar battle for smart city construction has become increasingly fierce since the high-profile entry of BAT (Baidu, Alibaba, and Tencent). In fact, competition along the smart city industry chain has always existed. Our editors' research has found that companies deeply engaged in smart city construction currently include central state-owned enterprises across various industries, such as China Mobile, MCC, and FiberHome; major internet companies, represented by Alibaba and Tencent; others that have developed rapidly in recent years, such as Digital China and Yanhua Smart; as well as many large and small startup companies, such as "Optics Valley Aoyuan Technology" and "CheLaiLe", which focus on exploring niche vertical markets.
Based solely on the current situation, major internet companies are the most closely watched players in today's smart city construction industry. The boom in smart cities has also given rise to demand for new types of sensors and low-cost sensors, with a huge market space.
With the significant increase in the number of lighting facilities and the growing complexity of lighting control requirements, refined management of urban lighting can only be achieved through intelligent control systems, which also makes it more convenient to realize environmental protection. As an important component of the "Smart City", smart lighting should apply urban sensor networks and power line carrier technology to connect street lights across the city, forming the "Internet of Things".