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When it's your job to turn people's wireless ideas into reality, you get to see a lot. Innovation in the wireless device space is picking up as a much broader community becomes increasingly aware that connectivity can enable better business and better living. So what trends is driving growth? I like to look at it from two perspectives: technology and business trends.
On the technology side, one thing with which we have been challenged several times as designers is the miniaturization of finished products. Thankfully, this has been supported by the continued miniaturization of key components including modules and even SIMs. Nevertheless, it presents unique design problems particularly when it comes to integrating antennas for mission-critical performance and reliability. For those seeking to bring small connected products to market, we highly recommend looking for expert support for antenna design, particularly in light of the fact that antenna performance is a key component of required device certifications.
The next trend creating an impact is the continued downward slope of component pricing across major component categories including modules, processors and memory. For years, analysts blamed slower-than-expected growth in the m2m industry on this very issue. Today, with costs coming down, we are starting to hit the sweet spot on bill of materials enabling attractive pricing on finished products in both traditional and emerging m2m verticals including the connected consumer space.
Another trend on the technology side that we expect to continue through 2011 is an increased interest in standardization. Though ABI Research recently stated "m2m markets will NOT achieve significant standardization in 2011" (1), they do note that a host of international standards organizations are working on setting standards with many projects expected to conclude this year. While we agree there will continue to be some road blocks, we are seeing increased concern for standards based development from the innovators bringing new m2m products to market and believe customer-driven demand will press the industry to overcome objections and begin adopting these standards.
On the business side, we are seeing a maturing in m2m value propositions and business models which is leading to improved return on investment and, as a result, the emergence of new vertical market participation. Markets like healthcare, connected homes and consumer products are now among the fastest growing verticals. In turn, related applications are shining a new light on the internet of things and driving increased visibility for m2m communications. Where the average consumer five years ago was just beginning to see the possibilities of cellular data communications, today that connectivity extends beyond their computers and phones into more and more aspects of their lives.
Ron Westfall of Current Analysis recently wrote, the potential growth in the m2mmarket is now driving, "increased resource investment and marketing attention of the major mobile carriers." (2) Having watched the carriers take notice and look toward m2m as a key element of their strategic plans, we agree with Westfall, while there remains work to be done, the growing focus from the carriers on m2m can only help drive adoption of the technology going forward.
Regulatory and legislative concerns are also driving interest and adoption of m2m technology. Recent hot topics in the political world include smart grid and energy management technology, environmental concerns, healthcare and highway safety - all of which can be addressed to some extent by implementing m2m technology. As a result, government funds are becoming available for m2m projects around the world. In addition, the global economic downturn of the past few years is forcing even the strongest organizations to seek efficiency wherever they can find it. What they're finding is that wireless technology can save them both time and money, and in some cases, even open doors to new service offerings and related revenue streams.
With m2m technology featuring more prominently in the news and consumer-related applications becoming more embedded in our everyday experience, many of the Fortune500 are standing up and taking notice. Retailers are streamlining their supply chains. Equipment manufacturers are enhancing their products and establishing the grounds for ongoing customer relationships and for recurring revenues. Healthcare companies are enhancing patient quality of life. Carmakers and auto insurers are making the highways safer. And, of course, major technology players are looking to complement existing portfolios and leverage customer relationships to expand into this hot new space.
Berg Insight projects the total number ofm2m connections to grow at a rate of 32 percent to reach nearly 300 million by 2015 (3). iSuppli predicts even faster growth of 52 percent between 2009 and 2014 (4). Beecham Research expects sales of embedded devices to exceed $250 billion by next year (5). By any measure, it's clear that m2m is poised not only to grow tremendously, but indeed to change forever, for the better, the way we live and work.
1) "What's NOT Going to Happen in 2011," ABI Research, December 2010; 2) Westfall, Ron, "m2mmobile: Will carriers rise to meet m2m ecosystems challenges?", Fierce Wireless, November 29, 2010,http://www.fiercewireless.com/story/m2mmobile-will-carriers-rise-meet-m2m-ecosystemchallenges/2010-11-29; 3) The Global Wireless m2mMarket (3rd Edition), Berg Insight, December 2010; 4) Sideco, Francis, "WWAN m2m Modules: Catalyst for an Industrial Revolution in the 21st Century,"iSuppli, Q3 2010; 5) Carrozzo, Mike, "Get Yourself Connected," Connected World, July/August 2010.
