the machine-to-machine market, 2012-2016, market figures & trends
DESCRIPTION
This presentation is an excerpt of our M2M expert's Samuel Ropert intervention at M2M World Innovation Congress 2013 in Nice. It sums up the Market Figues & Trends about the M2M market untill 2016. Read more on our blog : http://blog.idate.fr/the-enormous-growth-of-internet-of-things-2/?/lang-pref/en/TRANSCRIPT
The Machine-to-Machine Market, 2012-2016Market Figures & TrendsSamuel ROPERT
Senior consultant – M2M lead expert+33 4 67 14 44 [email protected]
Market & Data
M2M INNOVATION WORLD CONGRESS, September 24-26, 2013 – Nice
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Recent years: a few major verticals- Fleet management
- Industrial asset management
- Security
- PoS
3 impacting verticals- Automotive (40% CAGR, 2012-
2016)
- Connected consumer electronics (15% CAGR, 2012-2016)
- Utilities (60% CAGR, 2012-2016)
Future- focusing on emerging segments
- hundreds of million of machines in each main regional market (health, home automation).
Source: IDATE
M2M development by vertical industry
Future M2M market growth will come from the development of new vertical markets
Cellular modules evolution, by vertical, in million units
Source: IDATECopyright © IDATE 2012
Value chain is very fragmented
A combination of value chains
Source: IDATE
"Machine" Module Network DataProcessing
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Smart machines Remote Server
Electronic value chain Telecommunications value chain Computing value chain Value chain of the machines themselves
3 types of players- Module manufacturers- Communication providers- Integrators
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Sierra Wireless (including Sagemcom) Gemalto (including Cinterion) Telit SimCom Huawei
˃ Five major (cellular) players
Source: IDATE
M&A in the M2M module industry
The M2M hardware segment is experiencing strong consolidation
Market consolidation since 2007- Gemalto, Sierra and Telit have multiplied their acquisitions
Numerous Chinese players: Huawei, ZTE and SimCom- Pressure on price
3G is coming (but 2G still the majority of total sales)
˃ Main trends
SigFox Coronis Neul Also connectivity providers
˃ Other technology providers
Acquirer Target (activity) Date
Telit ILS (cloud platform services) September 2013
Sierra Wireless Sagemcom (modules manufacturer) June 2012
Gemalto Sensor Logic (platform provider) December 2011
Telit Motorola M2M (modules manufacturer) March 2011
Novatel Wireless Enfora (modules manufacturer) Nov 2010
Gemalto Cinterion (modules manufacturer) June 2010
Sierra Wireless Wavecom Dec 2008
Telit (module maker) One RF Technologies (spectrum technologies)
Nov 2008
Wavecom Anyware Technologies (software) Early 2008
Enfora TeleM2M (software) October 2007
Sierra Wireless AirLink (CDMA hardware) End-2007
Elster Coronis (hardware) 2007
Wavecom (module maker) Sony-Ericsson 2006
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Millions of machines concerned- Millions of SIM cards with data plan
Limited churn Telco seen as leader on the M2M value chain
- End-to-end offering
Low marketing costs Limited per M2M line (ancient technologies
sufficient)
˃ Business opportunities
Source: IDATE
Differentiation between traditional and M2M operations
M2M as an opportunity for Telcos ?
(Very) Low ARPU (from 1 EUR/month/line) Vertical and adapted offering for typical user
- Compared to horizontal for a traditional user
QoS introduction => expensive tools to implement
Monopsony situation (1 huge M2M client for several MNOs)
Communication revenues forecast to be very limited- 1.1% of their total mobile revenues in 2016
˃ … But some threats as well
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Customer benefits (costs savings)- ROI
- Higher customer satisfaction
Solutions mostly based on very mature and well-deployed technologies (both technical and economical interests)- Internet
- SMS
- GPRS
Public policies and regulations adopted in some vertical markets- eCall in automotive industry
- Smart grid
Telco involvement in this market- Credibility (financial and technical)
˃ Drivers
Drivers and barriers
Cost is still a key issue- High fixed costs (up-front costs)
Education of the market
Improvements requirement for application- Autonomy
- Network coverage
- Latency
Privacy & security issues- Threats from end-users
M2M market fragmentation- Numerous technologies and players
- Complexity in both technical integration and supplier identification
˃ Barriers
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Multiple alliances for technical cooperation on multinational contracts- Potential shared platform usage for global RFPs
New players arrival- Value proposition meeting clients expectations for some
M2M applicationso Technical requirementso Business requirements (low cost solution)
- SigFox, Neul, etc
Towards SLA introduction- Introduction of SLA constraints in M2M contracts
(requirement from M2M clients)- QoS could be seen as VAS while ARPU is decreasing a lot
Value is in the data management and storage - How about the Internet of Things (open loop) ?- Concerns about privacy?
o RFID threats on consumer side
Discussions around embedded SIM (eSIM)- Remote activation and provisioning over-the-air (OTA)- Requirement from (global) M2M clients
o Technical improvements & logistics costs savings
- Ability to change the carrier over the air
Different alliances
Multiple trends impacting the M2M market : game changers ?
SLA offering by Telenor
Source: IDATE
Source: Telenor
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Samuel has been an IDATE Consultant since early 2007. His assignments specifically involve technological expertise for connected devices, including RFID, the Internet of Things and the smart grid. He is in charge of the M2M market at IDATE. His activities focus on both technological and marketing innovation.
Before coming to IDATE, Samuel worked as a consultant for NPA Conseil (a French media consulting company). He focused on the new TV technologies (IPTV, HDTV, VOD and mobile TV). Prior to this, Samuel worked for TV Breizh (TF1 Group) as a technical video assistant where he specialized in video transmission (contribution side) by satellite.
Samuel graduated from the French engineering school Ecole Nationale Supérieure des Télécommunications de Bretagne. He also holds a master’s degree in Physics and in Politics from Sciences-Po Rennes.
Read more on our blog : The enormous growth of Internet of Things, 80 Billion things connected in 2020
Samuel ROPERT, Senior Consultant
DigiWorld by IDATE M2M Lead expert
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