Why Controlling the IoT Entry Point Is the New Battlefield for Tech Giants

Introduction

In July, SoftBank’s Masayoshi Son invested £23.4 billion in a cash acquisition of ARM, marking the company’s explicit move to stake a claim in the IoT hardware layer. This deal is portrayed as a landmark event that heralds the opening of the IoT era.

IoT Entry Points

1. What is an entry point? The term originated in the early Internet era, describing the battle for the gateway to a market—whether browsers, search engines, operating systems, chips, app stores, or super‑apps. Whoever controls the entry gains dominance; those who lose it may fade away, as illustrated by Intel’s decline and Nokia’s collapse.

Although no strict definition exists, an entry point can be seen as the essential route into a market.

Historically, entry points can be divided into two layers:

Base layer: operating systems, chips, connectivity protocols.

Application layer: platforms, distribution channels, applications, and services.

The base layer determines the success of the application layer; advantages at the base level can dictate outcomes at the higher level, as seen in Netscape’s defeat by Microsoft.

2. IoT entry points The IoT market is still in the early stage of competing for base‑layer entry points, which include IoT operating systems, IoT chips, and low‑level connectivity protocols. SoftBank’s ARM acquisition signals the start of this competition, and whoever secures these advantages will be well‑positioned for the forthcoming IoT era.

Platforms tightly coupled with the base layer also become focal points of competition, often introducing new business models—e.g., Apple’s App Store reshaped software distribution.

Openness in Huawei’s IoT Strategy

1. Huawei’s IoT strategy Huawei promotes a “1+2+1” model: one IoT operating system, two connectivity methods, and one IoT connectivity management platform.

From an entry‑point perspective, the three components map to both base‑layer and application‑layer entry points: the IoT OS addresses the base‑layer OS entry; Huawei’s NB‑IoT and other protocols address the base‑layer connectivity entry; and the OceanConnect platform addresses the application‑layer entry. The ultimate goal is to capture the IoT entry.

2. Importance of openness Technical capability alone cannot secure an entry point. Huawei’s IoT entry must be open to developers and users to build a thriving ecosystem. An open entry attracts developers, expands the ecosystem, and creates the foundation for sustainable market presence in the IoT era.

IoT Openness and Business Model

1. API value chain A popular view is “software eats the world, APIs eat software.” The API value chain consists of five stages:

Business asset creation: assets must have intrinsic value before they can be opened.

Open business assets: exposing assets via APIs creates reciprocal benefits.

Driving developer adoption: evangelizing the open API to product managers and developers.

Finding application pathways: providing distribution channels for applications.

Value realization: monetizing the ecosystem through agreements among asset owners, API providers, and developers.

Each node is interdependent; a failure in any stage breaks the chain.

2. Applying the API value chain to IoT business models Huawei’s IoT connectivity management platform offers two key open interfaces:

Upward REST APIs for application developers.

Downward agent SDKs for hardware developers to register devices and expose capabilities.

Mapping these to the API value chain:

Business asset: hardware capabilities and data.

Open business asset: devices register to the platform and expose capabilities via REST.

Drive developers: evangelism encourages use of the platform’s APIs.

Application pathways: platform assists in app distribution to attract users.

Value realization: monetization through commercial agreements once a large user base is established.

Conclusion

Combining the API value chain with Huawei’s IoT connectivity platform reveals a clear path from asset openness to value realization. Openness is the cornerstone of Huawei’s IoT strategy; without it, no mature entry point, ecosystem, or market validation can emerge, and the API value chain would remain an unattainable ideal.