Sterling, Virginia, USA — As the market readies itself for 50 billion connections among the ‘internet of things (IoT) or machine-to-machine (M2M) sector, there is a sense that automotive telematics and energy management are seeing solid traction, while other use cases are more anecdotal, according to a new report from Current Analysis.
A report by Kathryn Weldon, principal analyst, Enterprise Mobility at Current Analysis, provides an informal survey of announced wins so far in 2012 among the leading US and global operators and aggregators / mobile virtual network operators (MVNOs). It implies that businesses in other verticals are starting to see the value in M2M as well.
Granted, says Weldon, it is hard to compare operator traction using this informal survey technique, principally because the size of deployments are generally not included in public announcements, and many customers do not want their names to be used in press releases or case studies. Therefore, operators cannot publicly tout the majority of their wins.
She adds that there is also a key distinction between partner announcements and real customer wins. Partner announcements generally do not include a set number of SIMs guaranteed to yield active paid connections for the network service provider. So, while many operators issue press releases on device or application partnerships (which typically are not exclusive), these are not as telling as customer announcements.
Operator projections for M2M connections
One way to measure the current size and scope of the M2M market is to use numbers of connections that some operators have provided publicly and to estimate the rest. While the numbers below only represent 120 million connections, these are cellular only, and the 50 billion connection numbers quoted by many M2M industry groups would include wireline, WiFi, Bluetooth, Zigbee and other access types.
The projections for cellular connections are approximately 1-2 billion by 2020, which is justifiable, assuming that cellular connections grow at about 35% per year. In looking at these connection numbers, note that some operators do not give out this information. Some give it out every once in a while but not every quarter, and more importantly, the way they measure number of connections may be different. In other words, it is uncertain if the numbers represent the number of SIMs or modules that have been sold, or if they represent active connections.
In addition, says Weldon, it is not always clear where the line is drawn in the consumer electronics segment between an e-reader or a standalone PND (personal networking device) with embedded connectivity and an M2M connection. If these kinds of consumer electronic devices are included in the counts, they would skew the numbers up for that operator.
For more information, contact: kweldon@currentanalysis.com