LTE, connected cars to drive M2M market

Read time 2min 20sec

Demand for machine-to-machine (M2M) connections is set to triple over the next four years, with long-term evolution (LTE) fuelling the growth.

So says Godfrey Chua, directing analyst for M2M and the Internet of things at Infonetics Research.

"The M2M services industry is currently worth $11.5 million, across almost 1.7 billion connections, and is forecast to increase by an 18% compound annual growth rate between 2013 and 2018," states Chua. Because of such rapid expansion, vendors will face challenges to ensure that the infrastructure and architecture are in place for future M2M connections.

According to Chua, four out of five M2M devices are currently connected through PAN (personal area networks) technologies, including WiFi, Bluetooth and Zigbee.

"M2M continues to gather momentum as enterprises, in the never ending pursuit of competitive advantage, seek to find new ways of using connected technologies to improve agility and lower operational costs," explains Chua. "For service providers, there are significant and fast-growing opportunities ahead."

Chua observes that for cellular technologies are playing an increasing important role in enabling M2M services, comprising the vast majority of WAN wireless M2M connections today, over 220 million, and nearly tripling to just over 630 million connections.

"Among the cellular generations, 2G and 3G are the majority currently, but it's LTE that will grow the fastest, starting from a small base and then expanding rapidly, supported by numerous connected car technology initiatives as well as projects like China Mobile's massive LTE TDD network roll-out."

Chua points out that North America and Europe are the key centres of mobile M2M module growth but, buoyed by significant investments in China, Japan, South Korea and Singapore, Asia Pacific is catching up and is expected to account for a third of total revenue by 2018.

"This LTE push comes from the growing connected car industry and is being championed by AT&T, GM, OnStar and others," adds Chua, "Almost 300 LTE networks were deployed or were in the process of being deployed in 2013. To further fuel the move to LTE, more than 25 countries will auction their LTE networks in 2015."

Chua concludes that with the emergence of LTE and the focus of businesses looking for M2M connections that will give them a competitive edge, technology vendors should start building network solutions - such as data management, network security, mobile device management, M2M device management and cloud-based mobility management - that will meet the requirements of buinesses as well as the use cases of M2M devices.

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