In the fourth quarter, AT&T added nearly 2 million devices other than phones to its subscriber roles. AT&T defines them as emerging devices, which can be anything from an embedded laptop or tablet to a pillbox with a radio transmitter in the cap—so long as it doesn’t make phone calls. It’s a bit difficult to parse AT&T’s new numbers since it has several classifications for mobile data connections, divided into prepaid and postpaid, retail and wholesale. But it looks like much of that surge in connected devices was weighted toward machine-to-machine (M2M) applications.
Of the 2 million data connections, 1.5 million were connected devices, which could include industry M2M applications like vehicle tracking and monitoring, but also consumer devices from which AT&T doesn’t collect a direct revenue stream from the subscriber. The Amazon Kindle e-reader is probably the best example, since the customer pays no data access charge to AT&T, rather Amazon pays AT&T for network access directly. Other e-readers, navigation devices and connected digital photo frames probably fall into this category.
The remaining 500,000 devices AT&T classifies as embedded computing devices are the ones AT&T either sells directly to its customers or bills directly for data access: laptop USB cards, the Apple iPad and other tablets and embedded laptops and netbooks. AT&T reported that iPad and Android tablet sales increased by 442,000 in Q4, which accounts for most of its embedded computing device activations.
The total number of emerging devices by the end of 2010 was 11 million, making non-phone connections nearly 12% of its 95.5 million total subscriptions. In total AT&T has certified 940 specialty devices for its network, but some of the devices might have a much bigger impact than others. AT&T is providing the network connectivity for Vitality’s GlowCaps smart pill bottles, which track patients’ daily pill intake and remind them when it’s time to take their medication. Vitality is selling the pill caps directly to consumers over Amazon, but it’s end goal is to distribute them through pharmacies and drug companies, who would subsidize the cost of the product. Such a program could generate millions of sales, creating millions of new connections on the AT&T network.
AT&T is also supplying the connectivity for Garmin’s new GPS tracking device, designed to fit on a dog collar or kids backpack, and BMW to supply in car connectivity for the car marker’s emergency and concierge services.