According to Global Information Inc. (GII), the connected devices market is expected to reach $1.2 trillion by 2020. Berg Insight reports strong wireless M2M market growth across all world regions and vertical segments; estimating that shipments of wireless M2M devices increased by 35.3% to a new record level of 50.8 million units.
Berg Insight also states that due to the wide adoption of wireless M2M technology across many industries, a substantial share of M2M device shipments is now being generated from replacement sales; and as a result, the net increase of M2M subscribers will be significantly lower than M2M device shipments.
While the potential applications for M2M communications are endless, today's market is dominated by a handful of key industries:
UTILITIES / SMART ENERGY
Smart grids leverage intelligent monitoring systems and wireless controls to manage energy creation, distribution and consumption; helping to positively address energy independence and other concerns with lower use, reduced costs and increased reliability.
Utilities around the world are rolling out smart meters. Machina Research reports that in Europe, the main stimulus is regulatory, with countries such as Spain and the UK setting aggressive timetables for deployment of domestic smart meters. At the other extreme, Germany has carried out additional cost-benefit analyses and only started mandatory roll-out of smart meters in 2014 – a task that will be hard to achieve in the highly fragmented German market. In the US, there is a complex structure of federal stimulus funding and state legislation generally aimed at encouraging smart meter deployment. As well as a motivation to reduce revenue leakage, there is the further benefit of reducing fraud – households and businesses that don’t pay for electricity typically have little incentive to be energy efficient. So making people pay reduces demand on the network.
TRANSPORT / AUTOMOTIVE
The transport and automotive sector is investing in new and innovative M2M technologies to enable cost-effective improvements to efficiency, safety, maintenance, logistics and customer loyalty across applications such as: asset tracking, road freight, fleet management, security, emergency / roadside assistance, vehicle recovery, traffic information, navigation and voice. Berg Insight says that the Intelligent Transport Systems (ITS) for public transport is also in a growth phase expected to last for several years without being impacted by the fluctuating economic climate.
Cardiac arrhythmia, hypertension, ischemic diseases, sleep apnea, diabetes, asthma and chronic obstructive pulmonary disease are among the most common conditions being monitored today. As a result of notable uptake of clinical remote monitoring, connected medical environments, worried well personal health monitoring and improved assisted living monitoring Machina Research forecasts that the installed base of M2M connected devices within the health sector will approach 847 million by 2023.
Wireless connectivity enables retail devices such as PoS terminals and vending machines to be setup in locations where fixed connectivity is unavailable. By combining remote management and security with reliability and ease of implementation, customers using ATM machines and other kiosks can use wireless connectivity to lower costs, increase efficiencies and open new revenue streams, regardless of application or location. According to Machina Research, retail and leisure application devices will account for over 66 million IoT connections by 2025. Berg Insight reports that the retail industry is an important vertical for wireless M2M connectivity with a potential market size of nearly 80 million POS terminals, ATMs, vending machines, parking meters and fare collection devices worldwide. The number of wireless M2M connections in the retail industry is forecast to grow at a compound annual growth rate (CAGR) of 21.6 percent to reach 33.2 million connections worldwide in 2017. Shipments of wireless M2M devices will at the same time increase at a CAGR of 10.7 percent from 5.2 million units in 2011 to 9.6 million units in 2017.
According to GII, the market for M2M communication in intelligent buildings is the fastest growing application group in terms of revenue. The building automation group is expected to grow at a CAGR of 50% to reach $63 billion in 2020. M2M connectivity also underpins the Smart City concept, enabling city infrastructure and assets to be monitored and controlled remotely, and is instrumental in driving cost efficiencies and creating new value. The market for M2M connectivity in the smart cities sector is forecast to reach $19 billion in 2020.