As I see it, the leading M2M equipment manufacturers are fighting for market share by chosing one of two device design philosophies. A few are even trying to place their bets on both. Ultimately, the market will decide their fate. The question is whether the market wants “closed” devices with predefined, though configurable, functionality or whether it wants “open” devices with the flexibility to be programmed for a specific application.

In the M2M world today, there are “closed” devices that are configurable, but not programmable, and some that are “open” devices that can be programmed. The largest volume of devices seem to be the “closed” type, but they exist to satisfy several very specific business needs — examples include sub-prime car loans, teen tracking, and various specialized security applications.

When I talk to people who have application ideas, they are very creative about how to use the existing “closed” devices to help them solve a business problem, but often the “closed” device can only get them to the starting gate. So much of their “wish list” requires special features that can’t be justified in a general-purpose device. However, if the specialization can be defined in terms of software and not additional hardware, suddenly the “open” device options become much more attractive.

The tradeoffs are pretty straightforward. “Closed” devices benefit from larger production runs leading to lower costs per unit. With larger numbers come more tested scenarios leading potentially to greater stability and robustness. “Open” devices currently sell fewer numbers, have higher costs, and have been tested less. BUT they also can acheive a wider range of functionality and address a larger number of business solutions.

If “closed” devices are winning on price, volume, and robustness, “open” devices could surge forward by continuing price reductions and the availablity of effective over-the-air programming (OTAP) options, leading to the potential for even greater volume and the hardening through real field use.

Which will win this time? There are serious contenders in both camps. I’m not picking winners here (yet) and am holding off (for now) naming “front runners.” But I’m enjoying watching the battle. Stay tuned…