Market for M2M applications explodes
Infonetics Research predicts that the number of connections for embedded machine-to-machine applications will jump to 428 million by 2014, from 87 million in 2009, as service availability increases, new M2M applications come online, and regulatory and policy initiatives dictate a “connected society.”
For the last year, mobile operators have been jumping on the M2M bandwagon, and most recently AT&T, Sprint and Verizon Wireless announced plans to launch centers to promote M2M services. AT&T announced plans to collaborate with Alcatel-Lucent, Amdocs and Ericsson on innovation centers located in California, Texas and Israel, in order to give developers the opportunity to work with AT&T and its suppliers on projects such as connected health, M2M apps and application development.
Sprint announced its M2M Collaboration Center that will open in California to allow its customers to work with developers to make their M2M projects viable. Meanwhile, Verizon Wireless announced that its Machine-to-Machine Management Center will launch later this month. The center was developed by NPhase, the joint venture of Verizon and Qualcomm back in 2009, and will offer an integrated dashboard that will allow customers to manage network connections and devices, and to oversee other aspects of M2M connectivity.
However, the success of M2M in general depends on the modules that go into such solutions. For example, GSM modules are now in the sub $20 range, said Tom Greggor, senior manager of M2M operation and field support with T-Mobile, which is helping the operator to tap more markets with cost-effective solutions. T-Mobile is focusing on telematics, connected energy and telemedicine.
One application T-Mobile has rolled out in San Francisco, Denver and Los Angeles is a wireless parking meter that senses when an automobile has left a parking space and dynamically changes parking rates. Drivers can pay their fees and detect what spaces are available via a smartphone application.
“We found in [these] cities that there has been a 40% increase in revenues,” Greggor said.
But the big question is how quickly can Long Term Evolution (LTE) technology be leveraged for M2M applications? GSM and CDMA — whose modules are slightly higher in cost than GSM modules — can handle the bulk of today’s low-bandwidth applications, but the amount of information moving along the smart grid, for instance, will continue to grow, which will require LTE-based modules capable of handling considerably more data.
During a keynote address at the CTIA Enterprise & Applications conference in San Francisco last week, Lowell McAdam, CEO of Verizon Wireless — which announced that that it would roll out LTE in 38 markets by the end of the year — described the powerful potential of LTE-enabled M2M applications, given that the world seemingly is moving to this one standard.
“Just as LTE is the technology platform for the future, a collaborative business model is also the promise. This is a new paradigm for the industry,” McAdam said. He argued that one global standard would result in developers creating millions and millions of applications. “The potential is really limitless,” he said.
McAdam also promised to come to market next year with LTE-connected devices such as e-readers.
Anil Barot, vice president of marketing and business development with LTE chip vendor Wavesat, believes that LTE will penetrate vertical markets rather quickly, not only because the world is aligning on one standard, but also because by early 2011 RF baseband chips will be in the $25 to $30 range, thanks to the ability to put chip elements on a single die.
The vision of LTE is to put chips into a host of non-traditional devices, which should quickly push down the price points of LTE modules. And with the amount of scale LTE will garner rather quickly, there should be good implications for both enterprises and the public-safety community.
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