Cellular M2M Industry is Restructuring as Focus Shifts to Large-Scale Enterprise Solutions

ABI: Until recently, cellular machine-to-machine communications have been focused on leveraging mobile networks for niche data applications. But now, this under-the-radar technology is becoming more prominent as a key enabler of enterprise and industrial applications, and the M2M industry has entered a period of restructuring as vendors prepare for a new era of large-scale deployments. Small companies would offer limited vertical solutions using cellular M2M, whether in metering, industrial control, security or fleet management. Now, there are opportunities for large organizations, including carriers, to commit major resources to cellular M2M, and they are taking those opportunities. In 2005 and 2006, the two M2M market leaders each consolidated to address larger M2M opportunities. Wavecom acquired the Sony Ericsson M2M group to enhance its telematics and North American business. Siemens rolled its Wireless Modules Group into its Automation and Drives (A&D) division rather than including it in the public networks Siemens—Nokia joint venture. Now, the A&D group carries Siemens’ market leadership with its Simatic brand, its wireless modules, and its evolving RFID group. Asia has seen strong uptake, and Chinese module manufacturer SIMCOM is ramping up telemetry efforts to compete with the large Western manufacturers. Components are only part of the story. No market is complete without solutions, and for that, you need operator commitment. Operators used to be skeptical about M2M opportunities and the low monthly revenues they provide. Now operators such as Cingular, Sprint, Orange, TeliaSonera, and T-Mobile are rolling M2M into their business solutions groups. Operators now understand that they can play a hands-on role in managing these solutions across the cellular M2M ecosystem, or they can be less directly involved; but they will still earn revenue from these hundreds and thousands of deployed modules.

M2M also a compelling proposition for MVNOs—often called telemetry service providers—who buy airtime from carriers and then provide value-added services specific to particular M2M markets. M2M Research Service, Mobile Devices Research Service and Mobile Operators Research Service. Publ 20060711