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content


Big brother is coming to your town

Big brother is coming to your town

Advanced monitoring technologies keep tabs on garbage haulers, pets and a lot more
  • Written by Urgent Communications Administrator
  • 1st April 2004

When Keiji Tachikawa, head of Japanese wireless giant NTT DoCoMo, began asserting in 2000 that everything from pets to refrigerators were prime candidates for wireless communications and would constitute the majority of the carrier’s total business in 10 years, he drew a few chuckles. Today, his predictions don’t seem inflated as the market appears ripe for an explosion of what is known as machine-to-machine (M2M) communications.

“It appears the business world has finally caught up with technology,” said John C. Williams, managing director of The FocalPoint Group, a research and consulting firm specializing in wireless M2M communications. “Businesses are looking to capture real-time data feeds about their assets, customers, and overall operations. M2M technologies create the conduit for delivering a whole new level of service functionality previously impossible to attain.”

While M2M communications have been around for years, several factors are converging in 2004 to create a massive market that could rival or exceed penetration of the mobile-phone market. Previous M2M deployments were limited to high-end telemetry and SCADA [supervisory control and data acquisition] for pipelines and utilities, often running on expensive private radio or legacy systems. Today, however, wireless networks such as GPRS/EDGE and CDMA 1X RTT/1X EVDO can offer high-speed data capabilities with nearly ubiquitous coverage at attractive prices. Consequently, many of the world’s top handset vendors are leveraging the economies of scale found in the mobile-phone business to bring M2M modules to market at competitive price points.

“With M2M, we can see the penetration rate in the U.S. exceeding 100% because people may have devices in their vehicles and in their homes,” said Dean Fledderjohn, general manager of Kyocera Wireless’s M2M module business, which has been selling such units since July 2003.

Indeed, a plethora of market research supports the belief that wireless communications will be used to monitor everything from generators and vending machines to hospital patients and parolees, and that the M2M sector eventually could outstrip the traditional mobile-phone market. M2M consultancy E-principles predicts the number of M2M connections will exceed the number of commercial wireless subscribers in North America, Western Europe and Japan by 2011. The FocalPoint Group projects that almost 880 million new M2M-enabled devices will be produced annually by 2010. McKinsey and Company estimates $100 billion in total sector revenue for the U.S., Japan and Western Europe combined by 2010.

In the U.S., much of the growth to date has come from the installed base of telemetry customers looking to transition from Cellular Digital Packet Data (CDPD) networks that soon will cease to exist, as AT&T Wireless shuts its network down this year and Verizon Wireless ends CDPD service by the end of 2005. Others are transitioning from more expensive private networks. Recently, Pennsylvania Power and Lighting (PPL) Electric Utilities transitioned from CDPD technology to become one of Verizon Wireless’s largest CDMA 1X customers. Currently, PPL deploys 6,200 automated meter reading (AMR) devices across 70% of its largest commercial and industrial electricity customers. The ARMs incorporate Kyocera’s M200 telemetry module.

CDMA 1X operator Sprint PCS, which announced an aggressive M2M strategy more than a year ago, estimates that half of the carrier’s M2M business to date is coming from companies looking for an alternative to CDPD networks. But Sprint PCS indicates it also is making significant headway into businesses that never before considered wireless M2M communications as a way to help make their businesses more efficient.

Sprint PCS and its partner, @ Road — a provider of wireless tracking systems — launched an application in May 2003 for the waste-management industry that lets companies monitor when and where garbage trucks pick up their loads. An embedded module incorporating a CDMA 1X chip and a Global Positioning System (GPS) chip tracks locations and interfaces with engine diagnostics to record when and where the garbage truck picks up a load. This capability has virtually eliminated the rampant fraud that occurred when garbage truck drivers demanded payment under the table to pick up garbage or simply skipped picking up loads.

“These companies were able to eliminate the fraud problem and receive a return on investment in a matter of hours,” said Ryan Slack, director of integrated solutions with Sprint PCS.

The M2M phenomenon isn’t limited to commercial applications. For instance, South Korea wireless carrier SK Telecom will introduce in June a robot for the home market that senses movement while also detecting smoke and natural gas. If the robot notes anything unusual, it transmits a text message to the homeowner’s wireless handset. The robot is expected to retail for about $850, according to the Associated Press.

These greenfield deployments are expected to become more common as competition among vendors increases and modules become standardized — factors that should decrease prices. Nokia, the world’s largest mobile-phone maker, already offers a range of modules and gateways, teaming with third-party providers such as nPhase to customize applications for vertical M2M markets.

In addition, Sony Ericsson has embarked on a major M2M initiative, offering a universal developer’s kit to shorten development cycles for M2M components. The carrier also is simplifying the development of M2M solutions by implementing the TCP/IP stack — the GSM/GPRS networking protocol — directly onto its GSM/GPRS M2M products. That means system integrators no longer are required to develop and implement their own TCP/IP stacks, allowing them to focus on simplified application development.

Meanwhile, Kyocera said sales of its Kyocera 200 module, which retails for about $150, have increased by 50% each quarter. “We’ll continue to make use of economies of scale from the handset business at the component level, and as volumes pick up in vertical markets, we can bring pricing down even more,” said Fledderjohn.

Among carriers, Sprint PCS has certified M2M modules from Kyocera, Sierra Wireless, Novatel and AirPrime. “Devices are central,” said Sprint PCS’s Slack. “We’ve done a lot of work with device manufacturers to make sure that cost is reduced. … It’s in everyone’s interest to get modules as standardized as possible.”

The ultimate result of standardization may be off-the-shelf M2M solutions that leverage core competencies to provide common platforms that are easily customized for vertical markets. With some 50 billion machines worldwide, the opportunities appear endless.

Tags: content Policy

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