M2M. In an IoT World. Whitepaper.

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1 M2M In an IoT World Whitepaper

2 1 1.1 Introduction In the last couple of years M2M (machine-to-machine) has become part of the arsenal of products on offer by global carriers and a significant revenue stream for M2M specialists. These have developed complex service propositions, designed to reduce costs and increase efficiency for their clients. While the threat of new business models created by the global smartphone/app ecosystem has created challenges in some sectors, it has also boosted the value proposition of M2M by providing an additional window through which to view M2M activity. Telematics remains an area of growth in the broader M2M market, as is security and even mhealth, albeit from small beginnings. In other sectors, such as the smart home and consumer electronics, Wi-Fi is becoming the dominant technology, though mobile technology is used to access the cloud and is likely to play a subsidiary role. Meanwhile business models are beginning to account for new technology concepts and developments, one of the latest to gain significant traction being the Internet of Things or IoT. With IoT, devices are widely SIM-enabled, but not necessarily for the purpose of a specific M2M application or roll out. The IoT generally refers to all wireless and fixed technologies that may link devices, including RFID (Radio Frequency Identification), Near Field Communications, Wi-Fi, Zigbee etc. This means that the IoT universe is much larger than the M2M universe, where a high degree of analysis is enabled by the SIM in the device. Increasingly important in the overall M2M environment are the interfaces built by companies to manage devices and, importantly, to allow customers to manage their own devices, often across several geographical regions in the case of large global corporations. both, is set to become increasingly important. Indeed one way of perceiving the future of M2M and IoT is a series of industry specific Internets, with M2M providing the underlying infrastructure to connect the disparate IoT elements. 1.2 Definition M2M at its simplest refers to machine-to-machine or machine-to-mobile communications. However M2M goes farther than this: the M2M concept incorporates the idea that such communication allows analysis of data which passes through the M2M network providing a value-add. Juniper Research defines M2M in the following manner: M2M (machine-to-machine) refers to the connections, interfaces and infrastructure allowing data to be transferred between machines and between machines and individuals. M2M includes the management system, interfaces and portals to extract value from the data from these machines. The connection of different M2M worlds, so that information from one M2M area can be combined with information derived from data in another resulting in information which benefits

3 2 Juniper Research believes that the management of devices is key to M2M and is one thing which distinguishes it from IoT, where any object may be furnished with connectivity on an ad hoc basis. In many ways M2M is the less glamorous side of the future world of connected objects. M2M provides a supporting infrastructure for myriad individually connected IoT devices. Figure 1.1: The Player Value Chain 1.3 The M2M Value Chain Often the differentiating factor between players in the M2M universe tends to manifest itself as the interface, often supported in the cloud, with the user of the service. Perhaps it is not surprising that it is no longer enough for operators to provide connectivity alone. However the extent to which even chipset manufacturers support their sales with portals and interfaces shows how advanced the market has become. Source: Juniper Research 1.4 M2M Industry Sectors Whilst some operators will have tailored services to specific industry verticals already, others are still exploring the possibilities that different industries offer. Each industry sector has its own profile in terms of number of users, bandwidth requirements, profitability per connection and growth profile.

4 Telematics Telematics is one of the cornerstones of the broader M2M industry and comprises a number of different activities in both the consumer and commercial sector ranging from in-vehicle infotainment for consumers to fleet management services for businesses. Many telematics applications, particularly the consumer telematics sector, use higher bandwidth than other M2M applications. Telematics can also serve as the platform for usage-based insurance and stolen vehicle recovery services. Further, telematics can also be used by commercial auto insurers for fleet products, driver data and vehicle monitoring Smart Metering and Utilities Smart metering involves using chips, SIM cards and the mobile network to provide real-time metering of electricity, gas, water and other utility services used. Implicit in smart metering and the smart grid concept is the idea that meters and other devices are linked by a network, allowing the widespread collection and sharing of information on aspects of resource usage Healthcare and Remote Patient Monitoring Monitoring devices are central to all complex mhealth services, but vary in their complexity and the degree to which they are crucial to positive health outcomes. At its simplest, a monitoring device can be used to track weight or blood pressure in a system which links to a smartphone or PC, using the smartphone as a hub. At its most complex, heart arrhythmias can be managed through a bespoke monitoring device that links through to a specialist medical establishment. It is only in this context where the system can be considered to be M2M. There are 2 principle M2M applications in the healthcare sector; chronic disease management and cardiac outpatient monitoring. M2M s use in the healthcare sector remains constrained by the time required for applications to be certified and consequent long development cycles. Above all, the complexity and sensitivity of the healthcare use-case has constrained activity to date POS, Retail and Banking The 3 main tiers in the retail and banking environment for M2M are the areas of smart vending, monitoring automated teller machines and GSM-based POS (point of sale) devices. The latter 2 categories are expected to play an important role in less developed nations, while the vending industry is more developed in mature markets, particularly Japan. The most developed area across the board in the retail environment is POS devices, where several companies have made significant inroads into building a market for cellular-based POS systems which are hired out to retail establishments for a monthly fee (and often an upfront cost). Other applications in this category include games machines, car washes and parking meters The Connected Home, Security and Consumer Electronics After many years as a concept, the connected home is beginning to show signs of becoming a reality. There are various elements that comprise the connected home and several technologies that enable it. It is also worth noting that the connected home is closely linked to the consumer electronics market, since consumer electronics are mostly used

5 4 in the home. For this reason Juniper Research has addressed both markets in the same section. Figure 1.2: M2M Now & Future The development of the ereader, particularly Amazon s Kindle, which is based on a non-subscription business model for the underlying connectivity, introduced a major new vertical to the M2M market, albeit one with substantial differences from other verticals. It has been one which burned brightly but now seems on the wane, as tablets become preferred to ereaders for the consumption of ebooks. 1.5 The M2M Opportunity: Now & Future Key to the future of M2M is its development from a series of isolated objects to an environment where several types of M2M and IoT services are integrated together, the whole representing more than the sum of the parts. Source: Juniper Research

6 5 1.6 M2M Forecast Summary Juniper Research forecasts that the M2M sector will generate service revenues of over $40 billion globally by 2019, doubling the size of today s market. Both telematics and smart metering benefit from high device numbers, but the revenues that can be generated through telematics are expected to exceed those of smart metering substantially. Figure 1.3: M2M Service Revenues 2019: $42 billion Telematics POS, Retail and Banking Smart Home and Security Smart Metering Healthcare Consumer Electronics Source: Juniper Research

7 6 Order the Full Report M2M & Embedded Devices: Strategic Analysis & Vertical Market Forecasts Our M2M & Embedded Strategies research is an essential guide for players across the M2M value chain, as it provides an assessment of the key developing business models along with a series of strategic recommendations. Key Features Evaluates the current market landscape, examining key disruptive and innovative market forces. Provides an in-depth analysis of 6 key M2M verticals: Telmatics; Healthcare; Smart Metering; POS, Retail and Banking; Consumer Electronics; Connected Buildings. Interviews with leading players across the value chain including: Cinterion, Freewave, Globalstar, Jasper Technologies, KORE Telematics, Neul, Tech Mahindra, Trimble. Assesses the leading players through a Key player capability and capacity assessment, together with a vendor market positioning matrix. Includes benchmark industry forecasts for size and growth of the various M2M sectors. Identifies key executives driving the sector in our Movers & Shakers review. What s in this Research? Executive Summary - Key trends, competitive analysis, market forecasts and strategic recommendations (PPT). Market Trends & Competitive Landscape - Strategic analysis of market dynamics, drivers and trends, together with vendor assessment and matrix (PDF) Market Sizing & Forecasts Regional and sector analysis together with forecasts for key data usage and traffic metrics (PDF). Interactive Forecast Excel Highly granular dataset comprising almost 9,500 data points, allied to a What-If Analysis tool giving user the ability to manipulate Juniper s data (Interactive XL). Publications Details Publication date: June 2015 Author: Anthony Cox Contact Jon King, Business Development Manager, for more information: Jon.King@juniperresearch.com Juniper Research Ltd, Church Cottage House, Church Square, Basingstoke, Hampshire RG21 7QW UK Tel: UK: +44 (0) / USA: (International answering service) Fax: +44(0)