Global cellular M2M connections growing to more than 325 million by 2016

IMS Research, now part of IHS, forecasts the market for cellular machine-to-machine (M2M) connectivity services to rise from approximately 107 million connections globally in 2011 to about 326 million connections by 2016.

Mobile operators are intently focused on developing and expanding their activities in the cellular M2M market as a key growth opportunity in the face of increasing saturation and maturity of the core mobile voice/data services market.

A number of factors are enabling and driving cellular M2M market growth including: government regulatory initiatives (such as eCall in the European Union), the desire by corporate adopters to increase efficiency and develop new revenue models, the increasing number of tools and platforms that help to facilitate cellular M2M application development and the declining costs of components and services (including connectivity).

According to Sam Lucero, senior principal analyst at IMS Research, “Mobile operators are not simply providing managed connectivity services to the cellular M2M market but increasingly are ‘connecting the dots’ among M2M ecosystem players, including suppliers and developers – and this benefits the market as a whole.”

Mobile operators have become key players in facilitating cellular M2M market growth, by establishing M2M business units, deploying connection management platforms (CMP) and taking a leading role in coordinating the cellular M2M value chain at multiple levels.

Lucero comments :“Examples of this proactive role by mobile operators range from establishing module supply programs to developing partnerships with platform vendors and solution suppliers to reduce overall complexity in the value chain.”

Mobile operators are providing leadership in the cellular M2M market not only to grow the overall market, including the opportunity for offering managed connectivity services to M2M application service providers (ASPs), original equipment manufacturers (OEMs) and corporate adopters, but also to expand the mobile operators’ own share of the M2M value stack.

IMS Research estimates that managed connectivity accounts for only about 10 – 30 percent of the overall value in the M2M service value chain. Consequently, mobile operators are seeking to provide more value through the provisioning of value-added services to solution developers and end-to-end applications to end-users, typically through partnerships with ASPs.

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