M2M experiences growth spurt thanks to interest from cellular sector
Whoever thought machine-to-machine communications (M2M) ever would be sexy? Long thought of as services that monitor oil wells or track garbage-truck drivers, the M2M sector now is experiencing an expansion that will result in the technology playing a vital connectivity role in exciting services such as consumer telematics, electric vehicles and wireless home-energy management.
A new report from Yankee Group analyst John Keough sums it up: “The M2M market has matured from a fledgling industry into a force to be reckoned with in the wireless space. The number of cellular connections in the U.S. dedicated to M2M applications will nearly triple over the next five years, creating substantial growth opportunities in well-established verticals such as fleet telematics and industrial applications, as well as emerging opportunities including digital signage and pay-as-you-drive insurance.”
Indeed, cellular M2M connections are forecast to more than double from their 2011 level of 19.6 million to 50.2 million in 2015. Hardware pricing drops, established use cases and, perhaps most important of all, operators’ quest to bolster growth beyond phones are factors that now are driving M2M growth.
The popularity of this technology certainly was evident during the CTIA Wireless 2011 trade show in Orlando, Fla., Last week. While operators were low-key with other announcements, they were eager to talk about their progress in the M2M space. Even T-Mobile USA, which canceled most of its executives’ appearances at the show in light of AT&T’s proposed $39-billion acquisition of the operator, was there talking up M2M.
Deals announced last week ran the gamut. Among the announcements AT&T made was a deal with Ford to connect its Focus Electric vehicle. T-Mobile announced development of an embedded multimode international SIM and a deal with Audi for its Audi Connect system. Verizon Wireless made several announcements, including one with Sierra Wireless to deliver a cloud-based platform for end-to-end M2M solutions. Sprint Nextel also had several pieces of news, including an agreement with Macheen to enable consumer electronics manufacturers and retailers to deliver retail-ready M2M solutions.
The beauty is that this rapid expansion spells opportunity for those traditional applications that have been in the market for well over a decade. Fleet management and industrial applications will benefit from falling hardware prices and innovation that will be coming from the consumer-oriented side. In fact, these traditionally boring pieces of M2M could see a lot more innovation than even the consumer space now that M2M is sexy.
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