Economies of L
The longevity enabled by LPWA is manifested in long device life cycles. As just shown, these long device life cycles are the foundation of the economies of scale achievable by the IoT. A reminder from Econ 101: economies of scale are achieved by stretching fixed costs (like device costs) over a greater number of units (including time). Longevity then, is the “stretching factor” leading to a higher return on investment (ROI) for IoT device deployments. The premise of the IoT is to bring unprecedented efficiencies across the economy, from the enterprise to the household. These efficiencies are built on top of the economies of scale that longevity enables.
Economies of scale are achieved by stretching fixed costs (like device costs) over a greater number of units (including time). Longevity then, is the “stretching factor” leading to a higher return on investment (ROI) for IoT device deployments.
There is a subtle and often overlooked point here that should be emphasized: longevity isn’t just a nice side benefit for the IoT or interesting side effect of LPWA technology; longevity is the the very foundation of the IoT’s entire value proposition. In short, without the longevity that LPWA enables, the IoT would be unable to realize its purpose.
Longevity is necessary to garner any demand for IoT devices as it enables the ROI that justifies investing in them. Return on investment greatly hinges on the usable lifetime of IoT devices. The longer they can function as intended, the better the ROI and lower the total cost of ownership (TCO). Because demand for IoT devices has thus far proven to be extremely price sensitive, it will be essential for device manufacturers to attain economies of scale so that their devices’ prices can be at the level businesses and consumers are willing to pay.
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