M2M: Ushering in the dawn of endless possibilities
It has been a busy time in the market for M2M. We have been hearing the term M2M (Machine-to-Machine) more often these days than before. For starters, M2M refers to technologies that enable machines to communicate with each other and backend IT systems freely exchanging information. So why this sudden interest and hype now?
Wireless Operators are jumping in this bandwagon and claiming their stake in this market that is forecasted to grow rapidly. Moreover, with reducing prices of data connectivity and technological advancements in the wireless network space, M2M use cases are now more widely realizable. When Mobile Operators are desperately seeking newer revenue streams to offset their declining ARPU from Voice and Data, M2M seems to provide one of the most promising avenues for them to explore.
M2M is not a new concept. Everybody would agree with me that Asset Tracking and Fleet Tracking solutions deployed were all some form of M2M implementations in the past. But now the M2M market is becoming broader in reach. Companies are talking about connected devices in the fields of Medicine, Utilities, Home Automation/Security and even the Insurance industry to name a few. (I hope all of you would have seen the recent pilot “MyRate” rolled out Progressive Insurance using Wireless M2M that will track your driving habits).
In a M2M world, any device or machine fitted with a communications module will be able to communicate with any other device or a backend system. From a user arming and disarming the Home Security Alarm and switching on/off light bulbs in their homes from miles away to a smart electric meter that will submit monthly readings automatically to a backend system to my Sugar and BP machines that will record my readings directly on a database accessible by the doctors, the use cases are endless. And the good news is that these use cases are NOT so far fetched in the future as well! With such variety of devices enabled by M2M communications, we will start seeing Wireless networks being used for purposes other than those for which they were created – yes, I am talking Mobile phones…
We all know that almost every major US operator have made announcements around M2M and the formulation of new groups that are focused on this market segment. With all this hype about the M2M market and analyst projections of a multi-billion dollar industry, are Wireless Operators ready for this yet?
With such endless M2M application possibilities and innumerable devices connecting to a Wireless network, comes a variety of challenges for the Operators. It will be interesting to see how Operators address these challenges and monetize such services.
What are your thoughts? I would like to hear from you on this. I will try to share my thoughts on this in my next post.
Comments
M2M is a label that has historically been applied to industrial machine-to-machine. When you examine analyst forecasts for this market, annual shipments are sized at well under 100m units per year (see latest ABI, Beecham projections, for example). This is a small market relative to handsets.
Once you start to consider M2M as a subset of Embedded Mobile devices where consumer-machine applications are accounted for it begins to look like a far more interesting sector. All of a sudden, the 100m/year figure becomes a lot larger and more interesting to the supply side of the industry - think of 'embedded mobile' netbooks, digital photo frames, eReaders, personal health monitors etc.
In addition to becoming a more attractive market, a whole host of new business, operational and technology issues need to be addressed - traffic independent business models, mobile/non-mobile business partnerships etc.
For more, look into the GSMA strategy report on embedded mobile.
Commented by: Ken Figueredo | November 17, 2009 8:57 PM
Ken: Thanks for adding in some valuable insight. And thanks for pointing to the GSMA report on Embedded Mobile devices.
I totally agree that we need to start looking beyond traditional M2M applications (targeted towards Enterprise customers). The potential opportunity is fairly large when we consider CE devices, embedded with communication modules, and some of the use cases that I have pointed out too.
And like you have pointed out rightly, with this new market potential comes some challenges that needs to be addressed by the Operators. I will share some of my thoughts on this subject, in my next post.
Commented by: Sandeep Chandrasekar Seshadri | November 24, 2009 6:55 AM
For the benefit of others, I am just adding to the thread. Here is the URL to GSMA's Embedded Mobile initiative where you can find information and market data that Ken has referred to in his comments.
Commented by: Sandeep Chandrasekar Seshadri | November 24, 2009 7:14 AM