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M2M grows fast, driven by mobile

Juniper Research says Machine to Machine (M2M)) service revenues will reach $20bn globally in 2015, as players across the M2M industry focus on simplifying the process of rolling it out for the end-user.

However, the report - M2M & Embedded Strategies: Telematics, POS, mHealth, Metering & Buildings 2013-2018 - found that the monetisation opportunities offered by M2M services differ significantly according to the industry to which it is being applied. While telematics is particularly positive, smart metering, despite high forecast numbers and regulatory drivers, is still struggling to find a way to make money. However, in all sectors, service revenues will substantially exceed revenues from managing connectivity throughout the forecast period.

The report also argued that faster mobile broadband networks would impact on M2M use cases, noting that M2M service provision based on 4G LTE technology was beginning to find a market in CCTV, mobile POS (Point of Sale), digital signage and as a backup for fixed broadband services.

Operators are increasingly deploying sophisticated cloud based APIs (application programming interfaces) to address the increased complexities of the industry. However, it argued that M2M specialist players are the primary creators of the ecosystems behind deployments. "Operators continue to play a fundamental role in M2M," said report author Anthony Cox, "but there is still significant scope for new players focussing on either new technology approaches, or a particular angle of the market."

It says: 

  • Lower chipset prices will spur the use of mobile technologies for the Internet of Things.
  • Telematics remains the anchor M2M industry sector as virtually all major vehicle manufacturers are now deploying, or planning to deploy, M2M modules in new vehicles.
  • The installed base of cellular M2M devices will approach 500 million modules by 2018, driven primarily by Telematics and in-vehicle applications.

Market research firm Infonetics Research has released excerpts from its just-published M2M Strategies by Vertical: North American Enterprise Survey, which provides a view of the market through the eyes of end-users of M2M solutions and services.

Infonetics' M2M strategies report explores the drivers, barriers, plans, and service provider selection criteria of enterprises in five market segments: automotive and logistics; utility; retail; healthcare; and public safety and surveillance.

"So much of the discussion surrounding M2M has been focused on connections, but whether it is 20 billion, 30 billion, or 50 billion, there's no question that number is going to be huge. What hasn't been as clear is why this is happening. Why are enterprises buying M2M services?," says Godfrey Chua, directing analyst for M2M and connected world at Infonetics Research.

"We asked enterprises what's driving their decisions to adopt M2M services, and the number-one factor is the never-ending pursuit of competitive advantage," continues Chua. "This speaks to the need for M2M services to deliver a strong business case. As technologies continue to evolve and prices come down, enterprises will increasingly turn to M2M to lower operating costs, differentiate their brands, and create new revenue opportunities."

A majority of enterprises surveyed expect the need for M2M services to increase over the coming year, validating the assumption made by the top global service providers (Vodafone, AT&T, Verizon, Orange, and Telefonica) that M2M will be a key growth area for their businesses.

Security is a top concern among respondents, as are regulatory issues and the complexity of the M2M solutions themselves, underscoring the need for customer education in these areas. Just as it does in the smartphone world, network quality matters in M2M: According to enterprises surveyed, network quality is the top criteria for M2M service provider selection. Not surprisingly, service providers who place a strong emphasis on network reliability and performance in the US - namely Verizon and AT&T - also have significant mindshare in M2M.