When you’re designing an IoT device, there are lots of important decisions to make — including the mode of connectivity. The debate between Wi-Fi and cellular IoT is long-standing and many-faceted, with advantages and disadvantages of each depending on the situation.

For example, if the devices are touchscreen tablets attached to podiums or tables within a restaurant setting, it makes sense to choose Wi-Fi connectivity since reliable service will likely be stable and available. But if the IoT use case is more mobile, such as an asset tracker or a healthcare device that travels with a patient, Wi-Fi connectivity isn’t going to work as well. To ensure stable connectivity in remote locations or when devices are on the move, cellular internet is the best choice. Some IoT devices take a hybrid approach to connectivity, allowing them to hop on Wi-Fi when that option is available and switch to cellular when they’re beyond reach of the nearest router.

In this article, we’ll take a closer look at the Wi-Fi vs. cellular debate and how to weigh the pros and cons of each depending on your use case.

Understanding the useful applications of cellular internet

A device that uses cellular internet connectivity relies on a cellular data service, authorized through its SIM, to connect to the wider Internet. The connection does not flow through a router, but rather through the wireless cellular connection.

Most common reasons for cellular internet connections

Let’s take a closer look at a few of the reasons device designers may choose cellular connectivity over Wi-Fi, Bluetooth, or other options.

Better privacy protection

Security is often a concern with Wi-Fi, because depending on the network, data may not be encrypted. With cellular, data is always encrypted, ensuring data remains private.

Unlimited wireless range

While Wi-Fi’s capacity is limited to the range of the router, cellular internet connectivity has no set range. Devices can connect from anywhere there’s a cellular signal.

No access to a router required

With cellular connectivity, there’s no need for a router nearby because the data flows directly from the device to the cellular network, just like with a mobile phone.

Pros and cons associated with cellular internet connections

PROS

--Data always encrypted

--Unlimited wireless range

--No access to router needed

CONS

--Data plans may be limiting or expensive

--Must be within range of cell service

Understanding the useful applications of Wi-Fi

Devices that use Wi-Fi connect to the Internet through a router, usually located within the same room or building as the device. For uninterrupted connectivity, the Wi-Fi service in the area must be stable and the device has to stay within range.

Most common applications for Wi-Fi internet connections

Let’s look at a few reasons why device designers choose Wi-Fi over cellular.

Having a limited cellular data plan

If cellular data is limited and the IoT device needs to send significant amounts of information each day, Wi-Fi is often a better option because there are no cost limitations on the amount of data transferred.

Secure, fast access to connect multiple devices in your private home

While public Wi-Fi hotspots have a reputation for being unsecured, private Wi-Fi can be encrypted and thoroughly secure. When you need to connect multiple devices in a private home or office, Wi-Fi is often the best and most affordable solution.

Video and large data file streaming

For IoT devices such as video security systems that need to transfer a high volume of data in real-time, Wi-Fi is currently the best option (although the emergence of 5G might change that in the near future).

Pros and cons associated with Wi-Fi internet connections
PROS

--Unlimited data transfers,

--Able to be secured in private settings,

--Good for video and other data-heavy IoT devices

CONS

--Requires a router,

--Limited range

--Security risks for devices using public hotspots

Use case examples to illustrate the differences between Wi-Fi and cellular

Now let’s consider a few use cases that illustrate the differences between Wi-Fi and cellular connectivity for IoT devices.

Case study #1: Connectivity and realtor key lockboxes

Cellular solutions make a lot of sense when considering the cost of adding data connectivity to a new location. Here’s a business case study involving a real estate firm.

Currently, the homeowner lists a house with a realtor and that realtor leaves a lockbox key at the location. Other realtors can use the lockbox combo to access the key and show the house. Once a realtor has the combo, there is no further need to ask for it, nor any real incentive to communicate with the original realtor.

The realtor and the homeowner are in the dark about how many showings are happening. They don’t even know how to solicit feedback if they don’t know a visit has happened.

Enter the connected solution.

Let’s assume the homeowner has Wi-Fi. The realtor must coordinate with the homeowner to get the password. The realtor would then have to test out the password onsite. If the password or Wi-Fi doesn't work, the realtor has the combo fallback but loses the benefits of being connected.

The location of the lock could be out of range in the case of a condo or large house. More likely, the owner could no longer be living in the location or is trying to sell/rent/lease an empty property. Who wants to pay for the internet for an empty property?

The best solution, in this case, is to offer a cellular solution that works anywhere phones can get a signal. The system can be configured and tested at the office before going to the property. A simple phone app can coordinate with the server to authorize and track who is showing the property and include mandatory showing feedback.

Since realtors split 5% of the property price, any data that helps them sell it sooner and for more money is a very small investment. This is especially true with a device that they can reuse and recoup the costs over time. In this case, cellular wins out because it will work consistently where Wi-Fi won’t work.

Case study #2: Deployment cost and the personal storage industry

We know that a cellular solution makes sense when there is no Wi-Fi available. Next, we’ll go over a use case where Wi-Fi is readily available if the property owner wishes to pay more for it versus cellular.

The personal storage industry brought in more than $39.5 billion of revenue in 2020. Personal storage is a great candidate for this use case because unlike many other service industries, there is no expectation of having internet onsite, and although the costs could be spread among all the tenants, people want storage to be as cheap as possible.

Because there is no expectation of data, the only thing that a company might want to use connectivity for is lock and gate access management.

To get started with a Wi-Fi lock solution, you would need internet installed with a contract. That internet would cost at least $30 per month, but probably more because business internet is more expensive. The contract may or may not come with a router, but you pay for it either way.

The system needs to be set up and maintained, which means you need someone locally on-site to set it up. Technicians aren’t cheap. Every time there is an outage, you would have to send a technician. Managing the contracts and payments to the internet providers for each location is also non-trivial. You would need someone on payroll to manage the contracts and keep an eye on the rising internet prices. It’s not looking that great for Wi-Fi.

A cellular solution wouldn’t require a contract, and the cellular hardware would be cheaper than the first month of internet service, meaning that a cellular solution wins over Wi-Fi in the first month.

Servicing hardware is also much cheaper. The system can be designed to phone home in a heartbeat and let the server know that everything is alright. If there is a problem (meaning potentially angry customers and lost revenue) a less skilled technician can be sent out to replace the lock instead of needing someone capable of troubleshooting Wi-Fi.

There are certainly many times when Wi-Fi wins over cellular, but thinking about when and where cellular is a winner and offering a solution that saves another industry money is how to start a new company or expand an old one.

Choose cellular IoT and Hologram for the best connection option

All cellular IoT devices need a dependable source of connectivity. Hologram’s IoT SIM card offers seamless, global coverage for IoT devices with access to LTE/4G/3G/2G technologies. With our Hyper eUICC-enabled SIMs, you’ll gain access to new connectivity partnerships without any additional carrier negotiations, integrations, or hardware swaps.