Friday, 03 September 2010
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| Wednesday, 18 March 2009 | |
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Two recent analyses forecast a healthy future for machine-to-machine (M2M) communications.
First up: inCode, in the ‘Top 10 Enterprise Predictions’ supplement to its annual ‘Top 10 Telecom Predictions’ (click), includes the forecast that the number of devices controlled or monitored by this technology would number 1bn by 2012. The company reckons there are 60mn devices currently monitored and/or controlled through M2M solutions worldwide, and predicts a sharp increase in M2M shipments in 2009 due to significant price reduction of M2M modules. inCode calculates that in 2008 the average price of an M2M module was over US$50 per unit (on high volumes), but points out that M2M module manufacturers in China are now selling modules at less than US$30 per module on volume. Another important factor in increased adoption, says inCode, is the availability of M2M data plans selling for US$5 per month or lower per device. inCode believes an increase in shipments will coincide with greater activity by the majority of the 300 global network carriers who are taking a role in selling and supporting M2M solutions. These carriers will take greater control of additional functions of the M2M value chain (that is, software, middleware, integration, and support services) directly or working with partners. This will especially be the case for higher volume rollouts of greater than 100,000 units. inCode estimates the highest volume M2M opportunities will be in automotive, water, gas and electrical utilities, and consumer electronics. Next up: US M2M and smart services specialist Harbor Research has published its ‘2009-2013 M2M/Pervasive Internet Market Forecast Report’. Harbor reckons the document represents the most comprehensive analysis of intelligent device networking in the marketplace, and covers market sizing and the state of adoption of all wireless and wireline technologies across eight key sectors (buildings, industrial, energy, healthcare, retail, transportation, security and IT). It also includes analysis and forecasts for associated Smart Services. In the report Harbor Research forecasts that the number of intelligent device shipments will grow from 73mn units in 2008 to 430mn units in 2013. The company anticipates total device revenue is exceeding US$12bn by 2013. Much of the growth, asserts Harbor, will be due to the increasing presence of wireless PAN technology, including ZigBee and other 15.4 related technology, particularly those used in Wireless Sensor Networks (WSNs). The report notes that during this time adoption will be driven primarily by technological improvements, cross network integration, and advances in product innovation. Harbor has assessed the impact of the current global economic slowdown, and sees that while growth has slowed below 20% in the short term, there remains strong demand for M2M communication and associated services. “We're currently on the cusp of a transformation in the marketplace. It is clear there are important fundamental and structural changes are underway in the global economy that favour manufacturers who see beyond incremental product improvements to a future driven by networked experience as a means for differentiation and value creation,” reasons Harbor Research president Glen Allmendinger. “The market for connected products and managed services will increasingly be driven by customer interaction innovation. Over the next five years, we're going to see that the true value held in connected devices will shift towards value-added services where there's unheralded potential for revenue generation.” Smart money In Harbor’s reading of the runes the M2M/Pervasive Internet sector covers the networking of any product that has some form of internal processing or sensing. This, according to the company, is increasingly being regarded as a key growth sector over the coming decade. Often described as the 'next wave of the Internet', it is believed that the networking of such products will open up vast new opportunities for growth in added-value ‘smart services’ for product manufacturers and will radically change the dynamics of many industry sectors. Harbor's report addresses the growing role that the value-added or smart services will play in the coming years, noting that consumers are increasingly demanding these services. The company argues that at the current rate, demand for these services is expected to outstrip supply. “Those companies that have already switched their focus towards smart services are already seeing high and sustainable margins. In addition, they've found significant advantages as first movers,” concludes Allmendinger. “Recently, the margins on product manufacturing have been squeezed, and we don't foresee this to let up in the near future. Product manufacturers will have to change the way they do business or suffer dire consequences.” John Williamson |
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