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Tech heavyweights in a billion-dollar battle to rule the connected world

Ethan Miller/Getty Images

A high-stakes war is taking place at this year’s Consumer Electronics Show and it’s not over high-definition TVs or smartwatches. To catch a glimpse, you have to head to a relatively unassuming corner at the southern end of the convention space, where the Wireless Power Consortium and the Alliance for Wireless Power are fighting for control of the wireless charging market.

Neither group makes anything, in the traditional sense – all the products on display belong to heavyweights such as Samsung. Instead, these groups are selling a set of technical standards.

Just as a host of companies fought over the VHS and Betamax video standards a generation ago, today’s technology giants are waging a similar war in a variety of growing industries – everything from smart home appliances to wireless charging to self-driving cars. In each case, the stakes are high – whichever companies manage to make their preferred technology the industry standard will have a huge advantage over those that don’t.

“This is big money,” says John Perzow, vice-president of marketing development for the Wireless Power Consortium. “It impacts all the different parts of the value chain. We’re talking about hundreds of millions of dollars in WPC member investments.”

Technical standards battles are nothing new for the technology industry – and the resolution of such battles in the past has been responsible for industry-wide norms such as those for USB ports, HDMI cables and Bluetooth communication. But rarely have there been so many nascent technology industries (many of which are expected to become billion-dollar markets) simultaneously in need of technical norms – and so many different parties trying to define those norms.

Indeed, the WPC is just one of three groups all pushing different technical specifications that each group hopes will become the industry standard. Similar battles are being waged in the connected car market between some auto makers’ proprietary technology and groups such as the Open Automotive Alliance, a Google-backed organization pushing for the auto industry to adopt a version of Google’s Android operating system as its default software.

But perhaps the most powerful catalyst behind the current standardization wars is the burgeoning market known broadly as the Internet of Things. In general terms, IoT refers to a future in which myriad devices – including everything from cars to dishwashers to thermostats – function as Internet-connected computers. It is this potentially multibillion-dollar market that has increasingly become the primary focus for the industry’s biggest players, including Intel, Samsung and Microsoft.

“Many of the changes with the Internet of Things go way beyond what we’ve seen in the past,” says Samsung’s global senior vice-president Lee Won Jin. “[The IoT] requires a lot more co-ordination between all devices.”

But the industry-wide technical rules for that co-ordination have yet to be determined. At CES this week, BlackBerry introduced its own IoT platform, hoping to leverage its reputation for network security to become a trusted middleman in the communication between myriad web-connected devices. Another industry group called the Open Internet Consortium – and backed by giants such as Samsung and Intel – is pushing its own standards. OIC is in direct competition with another organization, the AllSeen Alliance, which is backed by the likes of LG and Microsoft.

“The industry won’t be successful if we have all kinds of different standards,” says Gary Martz, a wireless marketing manager at Intel who is representing the OIC at the show in Las Vegas. “There is no Internet of Things unless all those things can communicate with one another.”

Like several other standardization bodies, the OIC is pushing an open-source technical standard for the IoT – in essence, a set of technical rules and software code that is free to anyone.

But the OIC’s decision to make its standards free to use is not purely altruistic. For OIC companies such as Samsung, there’s a huge advantage in having a single, free-to-use platform for everyone. Such an industry landscape would allow companies to differentiate themselves on the strength of the products and services they provide, rather than the advantages of the technical standards they own or subscribe to.

Indeed, to hedge its bets in the world of wireless charging, Samsung is a member of both the Wireless Power Consortium and the Alliance For Wireless Power.

“There has never been a one-winner scenario in the tech industry,” Mr. Lee says. “People love one-winner scenarios, but they rarely happen.”

Battle of the Standards

Just as the technology industry eventually settled on universal technical standards for everything from USB ports to Bluetooth communication, it must now do the same for a host of new products and services that didn't exist just a few years ago. Several potentially lucrative new technologies have yet to find a common set of rules, and whoever succeeds in writing those rules is likely to have a huge competitive advantage.

Ethan Miller/Getty Images

Industry: Wireless Charging

Players: There are, broadly, two major organizations vying to write the technical standards for wireless device charging – the Wireless Power Consortium and the Alliance For Wireless Power. The differences between the two groups' approaches are largely technical, and relate to the details of the charging hardware. Of the two groups, the WPC has been around longer, but suffered from some bad publicity in its early days because some of the first WPC-certified wireless charges were found to have serious bugs.

The Market: Not only is wireless smartphone and tablet charging itself a potentially massive market, it also has many interesting future applications. For example, a cafe could offer wireless charging stations that, when activated, can push coupons of special offers to the device being charged. A number of hotels are also experimenting with wireless charging stations that allow a user to not only charge their device, but control room functions, such as lighting or curtains.

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Industry: The Connected Car

Players: For years, companies such as Canadian BlackBerry subsidiary QNX have been building advanced entertainment and information systems for myriad car companies using their own proprietary software standards. But now a number of car companies are building such systems themselves. In addition, a number of big-name automotive players, such as Ford and Honda, have joined a group called the Open Automotive Alliance. The group, supported by Google, is in favour of bringing the Android operating system to vehicles of all makes and models.

The Market: As cars begin to pack more and more powerful computers under the hood, the number of digital services available for those vehicles has skyrocketed. For example, QNX now provides not only entertainment and information services, it is beginning to expand into digital side and rear-view mirrors and even lane-swerving detection tools. Such services represent small steps toward the holy grail of vehicle automation, the self-driving car.


Industry: The Internet of Things

Players: A number of companies, including BlackBerry, have developed their own IoT platforms and services. But many of the tech industry's biggest players are starting to join forces to create universal standards that dictate how various different pieces of hardware can talk to one another. Two of the biggest industry groups include the AllSeen Alliance, which is backed by the likes of Microsoft and LG, and the Open Internet Consortium, which is backed primarily by Intel and Samsung. Both groups are pushing open platforms and standards that can be adopted by any developer, although the technical details of those standards are significantly different.

The Market: Just as smartphones quickly came to dominate the mobile communication market, smart devices of all kinds are expected to floor the consumer marketplace in the next five years, making the fully connected home a reality. As such, the potential market for companies that make everything from smart dishwashers to smart thermostats is massive. Many of these companies would love to see a universal, open-source framework for the Internet of Things, which would allow them to develop products and services without having to worry about licensing some competitor's proprietary technology.

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