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1. A clear top tier of operator alliances will emerge
Today Vodafone sets the benchmark in terms of global coverage with a huge facilities-based footprint and a long-established set of 'Partner' operators. However, other operators are looking to extend their footprint through alliances and affiliations. Most prominent of these is the emerging Deutsche Telekom/ FT-Orange/ TeliaSonera/ Everything Everywhere alliance. Telefonica has also established some interesting agreements with Etisalat and China Unicom. The most interesting things to watch is what Telefonica and AT&T do during 2012. Based on their decisions we expect to see two or three global groupings emerge.
2. Satellite operators and Systems Integrators will join global M2M alliances
As CSPs seek to extend their global coverage and increase scale, they will start to forge agreements with non-MNOs. The most obvious candidates are satellite operators such as Inmarsat and Iridium and systems integrators such as Logica. Machina Research expects a number of announcements that will see the emerging alliances diversify their memberships in order to boost coverage and/or improve their capability sets.
3. Android @home products will hit the marketplace
There is a huge opportunity in mass-market home automation, and Andoid@Home can potentially offer two key attributes: that it can be adopted by householders on a piecemeal basis over a number of years, and devices will benefit from an already-existing ecosystem of control devices (Android handsets and tablets). Google is unlikely to hold back for much longer
4. 2G will become accepted as a long term technology option
It is clear that the M2M world is, at best, grudging in its acceptance of 3G. M2M revenues are typically low, margins are thin, and the cost premium of 3G chipsets and modules over 2G is significant.
5. Some M2M platforms that currently partner with CSPs may begin to look like competitors to CSPs
Generic M2M platforms will naturally seek to provide an ever more comprehensive service to their CSP partners. The more capabilities such platforms develop, the easier it will be for them to compete for end-user revenues directly.
6. Huawei will launch an M2M platform
This would be a tactical move to drive sales volumes of devices, rather than a long term strategic play. In the short term, a device platform capability would afford Huawei a lot more flexibility to ‘sandbox’ devices and solutions, and support sales of the resulting commercial offerings through operator channels.
7. There will be further restructuring in the module/chipset market
The traditional M2M module vendors (Cinterion, Telit, Sierra Wireless and SimCom) will face continuing pressure on margins and there will be further consolidation. Most likely this will take the form of M&A with other players in the value chain to find economies of scale and increase capabilities but we don’t rule out mergers between those players.
8. MNOs will position themselves to take advantage of the growth in connected CE devices
Connected consumer electronics, such as cameras and portable games consoles, will remain the biggest category of M2M connected devices, accounting for 35% of the global total in 2020. Mobile network operators are increasingly keen to generate revenue from this segment. With a few exceptions, such as the Playstation Vita, the vast majority of these devices will be connected via WiFi rather than with SIM cards. MNOs will increasingly embrace MiFi-type devices, move to sell more CE devices through channels, and develop multi-device tariff options.
9. True standardisation proves harder than expected
This year has already seen initiatives around open standards from the ITU and a grouping of the major standards development organisations with the ‘One M2M’ initiative. Standardisation faces a number of challenges. M2M is fragmented, with numerous different technologies and several existing industry-specific sets of standards and a diverse range of companies, with different requirements. As such, it is likely that standardisation in 2012 will focus on achieving relatively modest objectives rather than developing an all-encompassing set of M2M standards.
10. The mobile industry will agree on a definition of M2M, and start counting
One of the key difficulties with the M2M industry is its extreme fragmentation. This is compounded by the lack of existence of any generally agreed boundaries. We think that 2012 will be the year that the M2M industry starts to reach consensus over definitions around devices, applications and platforms, which will provide some kind of basis for starting to measure performance.
Today Vodafone sets the benchmark in terms of global coverage with a huge facilities-based footprint and a long-established set of 'Partner' operators. However, other operators are looking to extend their footprint through alliances and affiliations. Most prominent of these is the emerging Deutsche Telekom/ FT-Orange/ TeliaSonera/ Everything Everywhere alliance. Telefonica has also established some interesting agreements with Etisalat and China Unicom. The most interesting things to watch is what Telefonica and AT&T do during 2012. Based on their decisions we expect to see two or three global groupings emerge.
2. Satellite operators and Systems Integrators will join global M2M alliances
As CSPs seek to extend their global coverage and increase scale, they will start to forge agreements with non-MNOs. The most obvious candidates are satellite operators such as Inmarsat and Iridium and systems integrators such as Logica. Machina Research expects a number of announcements that will see the emerging alliances diversify their memberships in order to boost coverage and/or improve their capability sets.
3. Android @home products will hit the marketplace
There is a huge opportunity in mass-market home automation, and Andoid@Home can potentially offer two key attributes: that it can be adopted by householders on a piecemeal basis over a number of years, and devices will benefit from an already-existing ecosystem of control devices (Android handsets and tablets). Google is unlikely to hold back for much longer
4. 2G will become accepted as a long term technology option
It is clear that the M2M world is, at best, grudging in its acceptance of 3G. M2M revenues are typically low, margins are thin, and the cost premium of 3G chipsets and modules over 2G is significant.
5. Some M2M platforms that currently partner with CSPs may begin to look like competitors to CSPs
Generic M2M platforms will naturally seek to provide an ever more comprehensive service to their CSP partners. The more capabilities such platforms develop, the easier it will be for them to compete for end-user revenues directly.
6. Huawei will launch an M2M platform
This would be a tactical move to drive sales volumes of devices, rather than a long term strategic play. In the short term, a device platform capability would afford Huawei a lot more flexibility to ‘sandbox’ devices and solutions, and support sales of the resulting commercial offerings through operator channels.
7. There will be further restructuring in the module/chipset market
The traditional M2M module vendors (Cinterion, Telit, Sierra Wireless and SimCom) will face continuing pressure on margins and there will be further consolidation. Most likely this will take the form of M&A with other players in the value chain to find economies of scale and increase capabilities but we don’t rule out mergers between those players.
8. MNOs will position themselves to take advantage of the growth in connected CE devices
Connected consumer electronics, such as cameras and portable games consoles, will remain the biggest category of M2M connected devices, accounting for 35% of the global total in 2020. Mobile network operators are increasingly keen to generate revenue from this segment. With a few exceptions, such as the Playstation Vita, the vast majority of these devices will be connected via WiFi rather than with SIM cards. MNOs will increasingly embrace MiFi-type devices, move to sell more CE devices through channels, and develop multi-device tariff options.
9. True standardisation proves harder than expected
This year has already seen initiatives around open standards from the ITU and a grouping of the major standards development organisations with the ‘One M2M’ initiative. Standardisation faces a number of challenges. M2M is fragmented, with numerous different technologies and several existing industry-specific sets of standards and a diverse range of companies, with different requirements. As such, it is likely that standardisation in 2012 will focus on achieving relatively modest objectives rather than developing an all-encompassing set of M2M standards.
10. The mobile industry will agree on a definition of M2M, and start counting
One of the key difficulties with the M2M industry is its extreme fragmentation. This is compounded by the lack of existence of any generally agreed boundaries. We think that 2012 will be the year that the M2M industry starts to reach consensus over definitions around devices, applications and platforms, which will provide some kind of basis for starting to measure performance.
