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Advancing LTE migration heralds massive change in global M2M modules markets

Advancing LTE migration heralds massive change in global M2M modules markets

Posted by Sue Pakenham-WalshDecember 19, 2013

London, UKThe M2M modules industry is on the verge of dramatic shift as key markets continue to expand LTE network coverage and deployments, according to a new study, Global M2M Modules Report: Advancing LTE migration heralds massive change in global M2M modules market, published by Machina Research.

To date, the demand for 4G connectivity within an M2M context has been restricted to a select few high bandwidth applications such as emergency response, security video and automobile entertainment. But evolving market dynamics in countries committed to the early adoption of LTE are creating a “perfect storm” of circumstances involving the decommissioning of 2G networks, rapidly expanding LTE network coverage and large scale LTE deployments that are ushering in a new era of LTE-based M2M modules with improved module design and pricing.

Of the global 266.5 million wireless wide area network (WWAN) M2M connections in 2013, 99.5% was comprised of 2G and 3G connections. However, as the initial wave of LTE migration transforms the M2M markets in the US, Japan, South Korea, China and top European markets, the mix of WWAN module technologies will change dramatically in the next 3-5 years.

This coming wave of LTE modules and connectivity is driving innovation in module design and forcing the migration of modules among existing M2M deployments in more advanced LTE markets. While the immediate impact of this process will be felt predominantly in early adopter markets, the migration dynamics in these markets serve as important case studies for all markets in the midst of LTE transitions.

“A key impact of this technology migration is being felt by companies that currently have large scale 2G M2M deployments or are looking to deploy new devices over the next few years,” stated Andy Castonguay, Principal Analyst at Machina Research and author of the new report. “The combination of network decommissioning and evolving LTE module options presents a new challenge to product designers of connected devices and M2M solution providers.”


The migration to LTE will have major implications for how enterprises choose which technology to use in both their existing and future M2M initiatives.  “For most M2M deployment decisions today the primary issues are module and device costs in the context of what the specific application needs today and in the short term,” continued Castonguay. “The conventional product development analysis will need to evolve quickly to consider long-term availability of the network, total cost of ownership for the M2M integration and intended lifespan of that asset. As a result, for enterprises embedding connectivity in devices with useable lifespans of more than 2-3 years, they will need to evaluate their choice of module technology not only to meet the immediate needs of their specific application, but also to take into account the longevity of the host network, so as to avoid costly module replacement in the future.”


A central element of research for this report involved extensive interviews with 20 modules manufacturers, mobile network operators, M2M service providers and M2M device manufacturers in order to assess current pricing trends for the 13 most common variants of M2M modules available in the global market.  As a result of heavy competition among global module makers and growing economies of scale, the pricing levels for WWAN modules has declined in recent years, making modules increasingly affordable for M2M projects and deployments.  The rapid shifts in LTE network coverage are also establishing a foundation for the deployment of LTE-only modules which are expected to have a substantial impact on LTE-module pricing. In addition to the introduction of LTE-only modules, manufacturers are exploring new module designs and product line formats to further lower the costs of 4G connectivity. The report identifies several key trends in module design that will contribute to continued improvement in both cost and performance that will help drive greater scale into the M2M module industry.

These, and numerous other elements of the WWAN M2M modules market, are addressed in the report.


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Sue Pakenham-Walsh

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