World Reimagined: What Are Mesh Networks, and How Will They Offer Unprecedented Opportunities for Investors?

One of the most impactful technology trends in recent decades has been the cost of data transmission and storage moving closer to zero. This trend has created unprecedented opportunities for entrepreneurialism and wealth generation around the world. A secondary wave has seen data-processing costs, aka computing power, also push closer to zero. We’ve already seen enormous strides made in this area: the smartphone in the palm of your hand has more computing power than was available to put the first people on the surface of the moon.

One way the cost of computing power is being reduced is through "mesh networks." A mesh network, or meshnet, is one in which the nodes connect to one another directly, dynamically, and non-hierarchically. In a more traditional network, all connectivity goes through a router. For example, a desktop that wants to access something stored on a server connects first to a router, which then connects to the server, managing the loads on the network and the server. In a mesh network, everything can connect directly to everything else, dynamically organizing and configuring, making a more robust system.

An example of a low-power meshnet is the Apple (AAPL) Find My Network, powered by Apple’s U1 chip. This network allows Apple devices such as iPhones and AirTags to communicate via ultra-wideband radio frequencies using very little power. The Find My network comprises hundreds of millions of Apple devices worldwide using Bluetooth to identify other devices in the vicinity. The power of this crowdsourced network is that a tiny AirTag, for example, can be functional for an entire year, providing precise location data before needing to replace the battery. The AirTag can use the computing power of nearby devices to subsidize its functionality, extending its battery life and increasing its utility.

In April, Apple updated the "Find My" app, opening up the global network to third-party products. Belkin’s earbuds, Chipolo’s ONE Spot item finder, and VanMoof’s S3 and X3 e-bikes all use the network to allow users to track down their wayward products. Who hasn’t run around the house or office desperately trying to recollect where they’d last seen their earbuds? With that app, it'll tell you exactly where it is.

Another example of a meshnet is Amazon’s (AMZN) Sidewalk, in which Echo and Ring devices offer a small portion of their bandwidth, serving as bridges for a network that reaches beyond the home. On June 8, Amazon will automatically enroll all compatible devices in the service unless a user changes the default settings. This obviously raises some privacy concerns, which Amazon addresses in this whitepaper. The potential range of the radio spectrum it uses is half a mile. This allows smart home devices to function, even without an internet connection. Amazon devices in your home team up with your neighbors’ devices to create a mesh network covering the entire area. If the internet goes out at your home, your Sidewalk compatible devices can leverage your neighbors’ connectivity to remain accessible.

As with all things tech, the power of these networks is subject to the power of (and no pun intended here) network effects, which means the value of the network increases as the number of connected devices increases.

After accusing Apple of anti-competitive practices recently, the OG of smart-tracker devices, Tile, has made its trackers Sidewalk-enabled, as have CareBand, which is currently pilot testing the capabilities of the Sidewalk system as it looks to expand its solutions to include older adults living with dementia who want to live in their own homes, and Level smart locks.

So, what does this have to do with reducing the cost of computing power? As the Internet of Things (IoT) evolves and expands, just what the “I” entails is expanding. Devices are no longer limited to connecting directly to a WiFi network, but are able to join different types of networks and piggyback on the computing power of other devices.

This brings up a whole lot of safety and security issues, which is actually a good thing, because as those risks and concerns get addressed, we get closer to the ability to share computing power in the same way that Uber Technologies (UBER) and Airbnb (ABNB) increased the utilization of cars and residences in a way that was previously impossible. Before, you couldn't monetize your car or your home easily, but now, you can use your car to earn money, or you can rent out your home when you are elsewhere, turning an empty building into something that actively generates income. And the meshnet? Imagine, for example, being able to safely earn a little extra income by simply leaving your laptop on overnight so that others leverage its abilities while you sleep.

New technologies are finding ways to increase the utilization rates of assets, lowering costs, and expanding access. What we’ve discussed here is dependent on networks ranging from 5G to those meshnets and all the technology that supports them, meaning it's worth paying attention to companies like MediaTek (MDTKF), Broadcom (AVGO), and MaxLinear (MXL), which support wireless communication. Those wireless communications at the edge of networks will continue to be dependent on a robust and resilient backbone network, which means tracking companies such as Calix (CALX) and Cogent Communications Holdings (CCOI).

We are on the cusp of technology breakthroughs that will make the advances in this area go asymptotic, and with that, the opportunities will also be unprecedented. Investors will want to keep a close eye on this area.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AAPL AMZN

Other Topics

Technology Stocks