How to buy IoT: Hardware

For many people in the planning stages of their IoT innovation, it can be difficult to know where to start.

Depending on where your IoT journey begins, you may need to research basic terms and find the right path for your business or, if you're already familiar with the landscape of vendors and enablers, you can cut straight to contacting potential partners. If you’re an OEM with hardware expertise, looking to simply integrate IoT into currently existing products, then your focus may fall entirely around finding the right solution provider for your end users. For innovators looking to create a brand-new device for an IoT project, you may need to carefully vet your technology vendors to ensure they’re able to meet your requirements. Have a look at the diagram below to get an idea of the current IoT ecosystem landscape.

Focus on hardware

Setting out to build a solution or product that uses IoT-connected devices in the field requires you to source the right hardware fit for your requirements. Take a look at the list below to find out which of these IoT hardware ecosystem players is the best fit to help you make progress with your IoT project.

SiPs (silicon providers)

The very beginning of the IoT supply chain starts with the silicon providers, who create the computer chips/processors used in the hardware that goes into devices, the “things” in the Internet of Things. For many potential IoT adopters, you may not have to deal directly with the silicon providers, as you’ll most likely be purchasing devices off the shelf and adapting them to suit your needs or creating devices with the help of design houses and manufacturers further down the chain.

The entry point for most organizations looking to create a device or IoT solution is at the hardware level. Let’s dive into the various sectors of the hardware market: module makers, design houses and manufacturers, OEMs and distributors.

Module makers

An IoT module is a small electronic device embedded in objects, machines, and things connected to wireless networks and sends and receives data. Sometimes referred to as a “wireless module”, “rf module” or “IoT chip,” the IoT module is a critical component of an IoT device, allowing it to connect to networks and transmit data.

If you’re not picking a fully-fledged IoT device off the shelf and instead want to cater to your exact requirements and design a device, then you’ll need to choose a module that is best suited to your needs.

Design houses and manufacturers

For organizations who don’t have IoT device design capabilities in-house, outsourcing the build of your devices to a design house can be an ideal solution. As the name implies, the main focus for services offered from a design house is electronics design. Some design houses can offer a full range of electronics design services including both hardware design as it related to electrical and electronics, and software design, across a wide variety of product end markets.

A classic challenge in the IoT market is the “build vs buy” question, and there is no easy answer. For some, a bespoke solution might be necessary (though more expensive and time consuming), when an off-the-shelf device simply won’t fit their needs. In these cases, partnering with a design house will enable you to better leverage your in-house resources while outsourcing the more difficult tasks like manufacturing.

OEMs

OEM stands for original equipment manufacturer and is a term used in a variety of ways, often quite ambiguously. OEM usually refers to an organization that manufactures products that are comprised of component parts created by other companies. Confusingly, it can also refer to a manufacturer that creates parts which are used by other businesses in their end products.

By obtaining hardware directly from the OEM, generally you’ll benefit from better pricing structures and warrantees, and, if you need slight alterations and a more bespoke hardware design, you’ll be able take advantage of their device expertise. However, dealing directly with a manufacturer may require significantly bigger order quantities in order to qualify as a customer, so keep that in mind.

Distributors

As the name implies, distributors take the products manufactured by the OEMs and handle their distribution via a range of channels. If you weren’t able to order a large enough quantity of devices to work with an OEM, you’ll usually purchase directly from a distributor instead. Smaller quantities can mean a lower overall cost for your project, so a distributor can be the best option if you know exactly what you need in terms of a hardware, for a small Proof of Concept deployment.

Stay tuned for our next blog in the series, where we tackle the software side of the equation!