A new report from Beecham Research predicts rapid growth in the sales of M2M cellular modules and wireless terminals to end 2019, with volumes shipped reaching 154% and 166% of 2014 levels, respectively. Cellular M2M modules are expected to reach $2.2bn in sales in 2019.
Despite the move to 3G and 4G and talk of 5G, Beecham Research says that 2G modules will continue to provide for the majority of new M2M connected devices for the next few years. This is particularly the case in Europe where there are no plans to end 2G services. But while 2G module shipments will continue to increase in volume over the period, as a percentage of total shipments they will decline from almost 80% in 2014 to just 50% by 2019
Over 90% of new cellular M2M connections are made using a module built directly into products such as smart meters, security alarms, medical devices, parking meters and connected cars systems. Compared with that, wireless terminals are defined in the report as general purpose stand-alone devices with one or more cellular network connections, such as modems, routers and gateways.
“The increasing sophistication of M2M applications is driving the need for higher speeds, including real time video in security and connected car markets and the addition of service layers on telematics applications such as job scheduling and mobile payment systems,” says David Parker, senior analyst at Beecham Research and author of the report.
“There are a number of potentially disruptive factors in the market including the timing, pricing and acceptance of new technologies like LTE-M and the rise of alternative methods of connecting objects such as mesh networks, low power wide area (LPWA) and satellite,” says Parker. “The extent to which companies operating these technologies will compete or collaborate with established cellular networks is a key topic right now.”
M2M wireless terminal sales are expected to more than double in revenue terms in the period to 2019. These products are much more diverse and can cost from $150 up to $2,000 for complex multi-radio gateways. The market is also far less globalised than for modules with over 63% of revenue attributable to small companies who typically operate in just one region.
“North America continues to be the most valuable region for high-end devices with features such as multiple radios, strong security and integration into other network technologies such as Wifi and Zigbee,” says Robin Duke-Woolley, CEO of Beecham Research. “New products can also be developed very rapidly for specific markets using the latest chipsets, a choice of operating systems and a variety of standards based firmware.”
Beecham Research has a strong track record for accurate forecasting in this market. Its prediction for M2M cellular modules at end 2011 of forecast sales in 2014 was just 3% variance from the actual outcome 3 years later, with a rise in sales of 40.9% over the three years.