M2M connections to account for 10pc of mobile market
Cellular machine-to-machine (M2M) communications will account for at least 10 per cent of the global mobile market by 2020, according to a new study by GSMA Intelligence, the research arm of the GSMA.
The study, entitled ‘Cellular M2M forecasts and assumptions: 2010-2020,’ said the connections will account for almost one billion of the 10 billion total mobile connection expected by 2020 if the market develops at its current trajectory, it forecast.
It, however, highlighted several factors that could stimulate further growth in the sector, potentially leading to as many as two billion cellular M2M connections by 2020 – double the current forecast.
The cellular M2M accounts for about three per cent of global mobile connections today, it said.
The new study, which was published at the GSMA Mobile 360 Series-North America conference taking place this week in Atlanta, counted M2M connections that access mobile networks (cellular M2M) and excluded consumer electronic devices such as smartphones, tablets and e-readers.
Hyunmi Yang, chief strategy officer at the GSMA, said: “Mobile networks are the platform upon which the M2M industry is being built and mobile operators are at the forefront in shaping the new business models that are driving this exciting market forward.
“The study issued points to strong growth in the M2M space over the next six years, but also highlights the measures that industry players and regulators can adopt to further accelerate market development.
“To fully unlock the M2M market opportunity for both consumers and businesses, we need industry-wide collaboration to address the current fragmented marketplace and to drive economies of scale and global interoperability, which will benefit all players in the emerging M2M ecosystem. The GSMA is supporting this industry-wide collaboration as part of its Connected Living programme, as well as other initiatives.”
At the current rate of trajectory, cellular M2M connections will grow at 26 per cent per year on average in the period between 2014 and 2020.
However, this growth rate could accelerate beyond 40 per cent a year if desirable market conditions are achieved, leading to the potential two billion cellular M2M connections globally by 2020, according to the report.
There are a number of areas identified as possible growth stimulators, including: the introduction of additional government policies aimed at encouraging wider deployment of cellular M2M in key sectors such as utilities, smart cities, automotive and healthcare; reductions in M2M module costs; and the development of standardised APIs.
Meanwhile, the US is one of the largest and most advanced M2M markets in the world, with M2M representing one in 10 of all mobile connections in the region, compared with one in 20 in Eurpoe and one in 100 in Africa, said another report.
The new GSMA report ‘Driving Innovation in Connected Living – The US Flags the Future of M2M,’ said US accounted for 35 million connections or 19 per cent of all global M2M connections at the end of last year, a figure that is expected to reach 41 million this year, driven in particular by advances in the automotive, utilities and oil and gas sectors.
US operators are meeting this burgeoning growth by forming strategic alliances and tactical partnerships with industry specialists to address the specific needs of a variety of vertical sectors, it said.
The report also highlighted that although the US M2M market is one of the biggest in the world, it is still in the early stages of its development and needs to address a number of significant challenges in order to fulfill its potential.
The market currently lacks standardisation, which limits interoperability, causes fragmentation and restricts economies of scale, as well as the rate of growth. There is also relatively little co-operation between the private and public sectors in many parts of the economy and in some sectors, such as healthcare, there is a lack of regulatory clarity.
However, despite these challenges, the market will also see growing demand in areas such wearable technology, connected cars and the connected home enabled by M2M connections, it said.
Alex Sinclair, chief technology officer at GSMA, said: “The US has taken a leading role in the deployment of next-generation network technologies and is now extending that far-sighted approach to M2M technology, particularly with innovative services in the Connected Car and Connected Home spaces.
“However, without common, interoperable standards and appropriate regulation, the US market cannot reach its full potential. We look forward to continuing our work with US operators to help them deliver the full power of M2M technology and the Internet of Things, providing important socio-economic benefits to citizens and businesses alike.”
The Automotive Opportunity
The US currently has 250 million cars on its roads, with 15.9 million either registered or purchased last year, according to the Organisation Internationale des Constructeurs d’Automobiles (OICA).
Consumer demand for in-car connectivity and services such as fuel consumption, safety monitoring, real-time news, maintenance and even pay-as-you-drive insurance subscriptions are growing apace.
M2M Technology in Utilities and Home Automation
The US has also been fast to deploy smart grids that use connected smart metres to track energy consumption in real time and enable a homeowner or business to remotely monitor their use of power, with 43 million smart metres installed across the country as of the end of 2012.
In many cases, smart meters may be integrated into a broader home automation system that enables the householder to remotely control heating, air conditioning, lighting and even individual appliances, such as security cameras or burglar alarms. There were approximately 2.3 million smart home installations in North America last year.
Embedded SIM to Accelerate M2M Market
AT&T recently became the first operator in the United States to launch the GSMA Embedded SIM specification. The specification allows mobile network operators to provide scalable, reliable and secure connectivity for M2M connected devices that are often hermetically sealed, such as in the connected car or smart metres.
It also facilitates over-the-air operator provisioning and management, which provides service flexibility to end customers. The specification promotes a common global architecture that will reduce costs, drive efficiencies and further accelerate the rapidly growing M2M market, which is set to reach 244 million global connections this year, according to GSMA Intelligence.
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