AT&T connects everything to its network
AT&T sees its emerging devices business, which connects everything from E-readers to digital picture frames to dog collars to its wireless network, becoming a $1 billion business in roughly five years.
LAS VEGAS--First it was e-readers and Netbooks. Now AT&T wants to connect dog collars and pill caps to its wireless network.
AT&T's Glenn Lurie, who heads up the company's emerging devices business, sees a world in which any device can be connected over AT&T's wireless network. And for almost two years, he has been working to get as many devices signed up on the AT&T network as possible.
The business is just beginning, but at the end of 2009, AT&T reported it already had one million devices that were not cell phones connected to its network.
Initially, these devices were mostly Netbooks, e-readers, digital picture frames, and GSM navigation devices.
"Netbooks and e-readers are the low-hanging fruit," Lurie said during an event at the CTIA trade show here this week, where he provided an update on the emerging device business.
The company is now branching out and offering wireless connectivity to a slew of products. This week AT&T announced a pet tracking collar that allows dog owners to locate their lost dogs.
"There are 25 million people who say they treat their dog as well as their children," he said. "I'm not one of them, but the right type of product with the right business model is out there to develop a product for this market."
Indeed, there are countless other gadgets that could be "connected" to AT&T's wireless network, including the top of a pill container that senses when someone has taken their medicine. Using the wireless network, it can alert people if they've forgotten to take their medication or it can inform a concerned doctor or family member, Lurie said.
Other devices that AT&T has announced, include cargo pallets used to track shipped containers and a low-cost 3G gaming device. AT&T is also still adding new Netbooks and computing tablets to its network, such as the upcoming Apple iPad, which can connect to AT&T's 3G wireless as well as the new OpenPeak tablet computing device, which Lurie said was "game-changing."
Today, the emerging device business doesn't contribute much revenue to AT&T. And service margins are low. But Ralph de la Vega, AT&T Mobility's CEO and president, said that the company is taking a long-term view when it comes to the business. And he predicts that emerging devices will contribute $1 billion in revenue annually to AT&T in about five years.
"This is a long-range bet," he said. "In the short term it's not that significant to the financials. But we look at this on a five-year horizion and it will contribute a billion dollars in revenue, which can be significant even to a company the size of AT&T."