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Amazon’s new wireless protocol for IoT devices will have trouble finding a customer base (AMZN)

Amazon’s new wireless protocol for IoT devices will have trouble finding a customer base (AMZN)

Somewhat lost in the shuffle at its hardware event last week, Amazon announced its Sidewalk IoT device networking protocol.

Business Insider Intelligence

The standard is meant to provide connectivity options in circumstances and use cases where Bluetooth or Wi-Fi don't offer sufficient range, but many devices intended for those use cases don't have the space for a battery to support cellular connections. Sidewalk will operate in the unlicensed 900 MHz spectrum bands and could offer a signal range of up to a mile from a hub, depending on interference and conditions.

Amazon hopes to build out an array of access points so that its Sidewalk networks can offer a range of coverage in urban areas. The first device to use this protocol is the Ring Fetch, a tracking device from the Amazon-owned home security company meant to help owners keep tabs on their pets.

Other devices from various Amazon brands will likely incorporate Sidewalk in the near future, especially for low-bandwidth home and property security sensors. The e-commerce giant is planning to publish the protocol's specifications so that other companies can develop devices that use it and communicate via its hubs as well.

For Amazon Sidewalk to find its legs, it will need support from third-party device manufacturers — but they don't have much reason to buy into the protocol. There aren't a huge range of use cases that require the intermediate range of support that Amazon's networking standard seems geared toward. And for many that do, low-powered cellular standards such as LTE-M can work just as well.

One point in Sidewalk's favor is that it likely won't require any monthly fees. As more smart home and security services move toward subscription models to guarantee steady revenue, though, connectivity costs will probably be factored into plans so that they can provide a more consistent experience.

But just as much as limited applications will hamstring Sidewalk, so will its association with Amazon. If a smart home device manufacturer were considering which protocol to use for its device, selecting Sidewalk would likely mean locking their device into the Amazon ecosystem; the company would need to have a separate product if it wanted to get Google Assistant users onboard as well.

At that point, if other standards offer similar or even only slightly worse range and performance, the wider market for a single device is likely far more appealing for such a manufacturer. And with the widening of low-powered network availability and the improvements to other standards — Wi-Fi 6 and Bluetooth 5.1 offer faster connections and longer range than prior iterations — there just doesn't look to be a great market for Amazon to tap into with Sidewalk outside of its own brands.