The SigFox business model takes a top-down approach. The company owns all of its technology—from the backend data and cloud server to the endpoints software. But the differentiator is that SigFox is essentially an open market for the endpoints. SigFox gives away its endpoint technology to whatever silicon manufacturer or vendor wants it so long as certain business terms are agreed upon. Large manufacturers like STMicroelectronics, Atmel, and Texas Instruments make SigFox radios. SigFox thinks that  allowing the application to be really inexpensive is the way to drive people to its market

SigFox endpoints use commodity MSK radios, and they are relatively inexpensive. You can get a chip for a few dollars and a module for less than $10 in high volumes, so SigFox partners aren’t bringing in much money from the hardware itself. SigFox makes its money by getting network operators to pay royalties on reselling its technology stack to customers. In other words, SigFox gives away the hardware enablers but sells the software/network as a service. In some cases, the company actually deploys the network and acts as the network operator. This is the case in France and in the US; when you buy LPWAN service there, you’re operating on a SigFox network.

SigFox’s ultimate goal is to get large network operators from all over to world to deploy its networks. It has raised more than €100 million to do this and has great global reach. SigFox has been around since 2009 (longer than almost everyone else in the space), and it’s likely the most aggressive marketer in IoT.

SigFox is of the opinion that it’s easier to work with mobile network operators or deploy networks itself and charge a small recurring fee than to sell expensive hardware at the endpoint. However, there are some challenges associated with this business model. For one, if you want to deploy a SigFox network, you have to work directly with SigFox—there isn’t another option. Additionally, only one SigFox network can be deployed in an area, because the company has exclusive arrangements with network operators when they work together.

SigFox is a narrowband (or ultra-narrowband) technology. It uses a standard radio transmission method called binary phase-shift keying (BPSK), and it takes very narrow chunks of spectrum and changes the phase of the carrier radio wave to encode the data. This allows the receiver to only listen in a tiny slice of spectrum which mitigates the effect of noise. It requires an inexpensive endpoint radio and a more sophisticated basestation to manage the network.

SigFox communication tends to be better if it’s headed up from the endpoint to the basestation. It has bidirectional functionality, but its capacity going from the basestation back to the endpoint is constrained, and you’ll have less link budget going down than going up. This is because the receive sensitivity on the endpoint is not as good as the expensive basestation.

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