What’s coming in 2013 in the world of machine-to-machine (M2M) communications and connected devices? M2M Now talks to a few key industry figures — now tell us if they’re talking sense or if it’s just crystal balls.
Gurmeet Singh Ahuja, M2M expert and programme director at MindTree Ltd, says that while M2M adoption gained momentum during 2011—2012, the trend has been to provide a packaged service to the end customers with one of the M2M value chain members playing the role of system integrator. Mobile network operators are strategising towards re-farming 2G spectrum and looking to migrate to 3G / 4G services completely. It is, therefore, a safe bet that the OEMs will use 3G modules. 3G modules will increase the initial cost of the device, but will help reduce the total cost of ownership as the average life cycle of M2M is much higher.
The industry will see a whole host of changes over the next few years. One trend to watch out for will be in Open Systems. Efforts continue to be made by ETSI, the European Telecommunications Standards Institute to standardise M2M systems, and the oneM2M initiative which has brought seven global Standards Development Organisations (SDOs) together. In 2013, we will see compliant products, solutions and services offered bringing openness into the system. We will also see an increase in M2M adoption by bringing down the total cost of ownership of the M2M device / solution by reducing the cost of every element. Through system openness end users will be offered many more choices, which will enable faster adoption of inter-operable M2M services.
Ahuja says, “We will see the emergence of a multitude of MVNOs offering only M2M services, and they will take advantage of open systems, reducing costs and receiving help from mobile network operators to use their network in an optimum way. M2M Roaming, which today is a big challenge, will be the ‘need of the hour’ for the transportation, logistics and automotive vertical markets. Operators and M2M service providers will have to work together to make M2M roaming possible. We will also see the emergence of Open M2M platforms, enabling service providers and niche players to integrate their offerings with M2M platforms.”
Matt Hatton, director of Machina Research has made several predictions. Here are a few of them; the rest can be found at www.MachinaResearch.com:
Operator alliances will expand and their roles become clearer. To support global M2M offerings MNOs are increasingly forming into alliances. The most prominent currently are Vodafone with its partner markets, and two groupings that emerged during 2012: the Global M2M Association (Deutsche Telekom, Orange and Telia Sonera) and the grouping around the Jasper Wireless platform (including NTT DOCOMO and Telefonica), the “J-7”. During 2013 we expect a lot more operators will join these emerging alliances and that the roles of these organisations will become more apparent, e.g. with joint bidding, IMSI-swapping, and SLAs.
Data analytics, or so-called ‘Big Data’, will seize the M2M agenda. During 2012 there were a few tentative moves in this direction such as Telefonica’s Dynamic Insights business unit, but 2013 will see many of the issues crystallise. We believe that a huge amount of the value of the M2M market lies in the analysis and manipulation of the data generated by diverse sources. We will be speaking at IQPC’s Big Data Monetisation in Telecoms event (Jan 22-24, London), and publishing a Strategy Report on this topic as part of our Advisory Service in Q1, 2013.
In 2012 there were a lot of initiatives around open standards. M2M is a fragmented field with numerous different technologies, industry-specific standards and a diverse range of stakeholders. As such, it is likely that standardisation in 2013 will achieve modest objectives rather than developing an all-encompassing set of M2M standards. Many companies won’t wait for standards.
Programmable SIMs/eUICC will start to take off. One area where standards are important and should be finalised in 2013 is eUICC. There is a lot of interest in remote SIM management for M2M and we expect pre-standardisation commercial deployments in 2013. Several issues need to be resolved to see full-scale inter-operator IMSI swapping, not least the Subscription Manager role. During 2013 there will also be discussion around how reprogrammable SIMs might affect the wider industry (i.e. handsets and mobile broadband).
Module vendors will start to compete with MNOs. The M2M module market is becoming more competitive, pushing module OEMs to find new ways to differentiate and compete other than simply on cost. During the last year or two we have seen all of the major module vendors (Cinterion/Gemalto, Sierra Wireless and Telit) launch cloud-based device management platforms, to provide end-to-end services for M2M service users. They are in a good position to provide a simple, one-stop-shop for devices and connectivity, particularly for smaller contracts. However, it is dangerous for vendors to overstep the mark and start competing directly with their MNO customers.
M2M predictions for 2013 from Jürgen Hase, VP of the M2M Competence Center at Deutsche Telekom and chairman of the M2M Alliance are:
– Middleware layers will speed up development and deployment: New horizontal middleware layers for M2M will emerge. Placed on top of existing layers such as connectivity and device management, they will provide support for common tasks in all industries – for instance, in setting up heterogeneous sensor networks for industrial monitoring. This will accelerate the development and deployment of M2M solutions, while drastically reducing development costs. Huge benefits are expected for both solution developers and adopters.
– Big Data: M2M is about to enter the next evolutionary stage: at the moment we collect data, but the real benefits of M2M will become apparent by analysing this data. Today, it is already possible to detect attrition in production facilities by analysing data in real time. Combined with machine learning algorithms, such applications will recognise more and more patterns and allow completely new insights into our businesses.
– Alliances: M2M is not a locally based business. In 2013, we will witness a number of strategic alliances, which will shape the future of the M2M market. They will work to overcome a major challenge in the long run: to provide seamless services in all countries. Furthermore, alliances are necessary to improve quality of service and establish M2M communication standards.
– Automotive will be the main driver of M2M adoption in Europe. The European Union has decided that, starting in 2015, all newly registered motor vehicles must be equipped with an emergency call (eCall) system. Automotive manufacturers will focus on integrating embedded SIMs to comply with this regulation. Furthermore, telematics and connected entertainment services are additional M2M solutions, which will be subject to mass production.
– Healthcare will be a key driver of M2M in the USA. Using M2M devices, a patient’s state of health can be monitored continuously. A computer checks readings such as blood pressure, pulse or blood sugar level and notifies a doctor or care workers in the event of an emergency. As American health insurances recognise the potential long-term savings, they will subsidise a great number of M2M solutions in 2013.
According to John Horn, president of RACO Wireless, catching the attention of many outsiders, M2M was a disruptive force in 2012. So, what can we expect in 2013?
1. Industry consolidation will be prominent. M2M is ripe for an explosion of growth, made possible by the amalgamation of resources to improve scope and scale. Through M&A activities and financial backing, single companies will develop capabilities that meet the wide-ranging needs of their growing customer bases.
2. Rapid industry growth will continue its sizzling trend. The need for greater convenience and productivity will create demand for M2M technology like never before seen. With companies achieving as much as 40% ROI in the first year of usage, M2M will quickly become a “must-have” solution. With this growth, spurred by investment to bring together a segmented industry, it will be critical to have enablers like RACO Wireless, to bring new solutions to market quickly.
Clare McCarthy, Practice Leader, Telco Operations, at Ovum, the communications analysts says: “In the enterprise market in 2013 operators will take a new approach to M2M, with more partnering to deliver services.”
Mark Yates, Research Analyst, IDC Government Insights, EMEA, says, “The volatile context in which governments operate makes systemic change necessary. Incremental, step-by-step improvements to government effectiveness will often be the only ones affordable in the short-term.”
– At least 60% of funding for smart city projects will be focused on smart energy and intelligent transportation.
– At least 70% of smart city programs that succeed between 2013 and 2015 will be governed by joint ventures that include city leaders as key stewards.
One of the 2013 predictions from InMedica, medical technology research division of IMS Research, is that activity monitors will rapidly increase as a share of the wearable fitness device market. The fastest growing group of consumers of wearable fitness devices are those who have an interest in tracking their everyday activity. They are not performing high intensity sports activities and just want to become more active: climb the stairs. Others, instead of taking the lift, take the occasional stroll, or walk instead of driving short distances, and change from a sedentary lifestyle to a more active one.
These increasingly fitness-aware consumers do not need a high performance GPS heart-rate monitor; what they need and are adopting at a high rate are daily activity monitors. As a result, the activity monitor market represents the largest growth opportunity in the fitness and wellness market. InMedica predicts that in 2013, the share of activity monitors in the wearable fitness devices market will increase to 44%, from 32% in 2012.
KORE Telematics’ Felix Chuang, senior product manager, says that M2M adoption will move rapidly in two segments: Healthcare and payment processing. “Healthcare stakeholders understand how connected devices can improve both the economics and quality of care for patient monitoring, including: sleep apnoea, diabetes, blood pressure, heart function and other vital signs. Payment processing both in mobile wallet and fixed devices has reached critical acceptance. Consumers can see examples abound of companies integrating cellular processing ubiquitously: in restaurants, among residential service personnel, in taxis and parking meters – even wireless cash registers.”
(For more from Kore, see Predictions for 2013: M2M Hype Meets Reality)
Jean-Noel Georges, global program director for ICT in Financial Services at analysts, Frost & Sullivan, predicts that: “The value of transactions made via mobile payment using NFC technology will reach 42.3% in 2015 and 49.6% in 2018… and the commitment of market participants to work together signifies a positive signal for Near Field Communication (NFC) development.”
He adds that, “Cloud computing will remain a cost-efficiency driver as these solutions are expanding faster than NFC-based solutions in the mobile payments space. Amidst the economic crisis in Europe, many companies are looking to reduce or minimise their investment or functional cost. As the cloud uses internet and server storage for payment purposes, associated business models will allow small and medium-sized enterprises to better reach their expenditure objectives.”
PayPal’s president, David Marcus, predicts that NFC won’t be around after 2013, saying he thinks that NFC for payments will “fail to gain mass adoption.” Computerworld reports that Marcus predicted this in a blog, stating he doesn’t believe that “tapping a phone on a terminal [is] any easier than swiping a credit card.” Apparently, he doesn’t believe it’s providing additional value to encourage consumers to change their behaviour. PayPal chose not to use NFC for its recently announced in-store mobile payment system; instead, it is having customers check in to a store using the PayPal mobile app, then the store can see a profile at the point of sale (PoS) and charge a customer’s account by tapping the customer’s picture. Marcus noted in the same blog post that the cash register will become mobile.
Yankee Group associate analyst, Jordan McKee responds that the PayPal president’s remarks on how the technology fails to provide convenience are “quite comical, given that PayPal’s current mobile payment platform involves keying in a 10-digit phone number and four-digit pin. Admittedly, NFC faces somewhat of an uphill battle before it can gain traction in mobile payments. But to rule out the technology altogether is outlandish at best — especially given the interest it continues to garner from all facets of the mobile money community. Simplicity and convenience, the hallmarks of NFC, are difficult to overlook for merchants and consumers alike, thus positioning it well for future adoption.”