Machine to Machine Mobile Surging Ahead

Though the market for cellular handsets is predicted to grow 10% annually through the end of the decade, a rapidly growing market, cellular radios for Machine-to-Machine - or M2M - will see growth of 40% annually through 2010 according to the preliminary results of a report to be published by ABI Research next month.

Siemens, the current market leader in M2M modules, is already selling roughly 1 M2M module for every 3 handsets. "At this rate, Siemens could be shipping more M2M modules than handsets in just a few years," said Erik Michielsen, principal analyst at ABI Research. Wavecom and Sony Ericsson are also major players.

M2M modules are, in simple terms, cellular radios with accompanying functionality packaged in a slim form factor, often integrated within a larger system. These devices are used, typically over a cellular network, to provide information to a central location. Examples include a remote monitoring device informing a utility company that a customer is low on fuel; or a burglar alarm notifying a central station that a problem exists; or a vending machine notifying a snack supplier that it is low on potato chips.

Driving M2M is the increasing need for efficiency and communications in a variety of markets. Currently the biggest application for M2M is home security where radio backup transmitters consume a large portion of all modules made. But other up-and-coming areas continue to add to the demand: electronic meter reading, fleet management and automation, among others.

There are several aspects to the M2M module market that have made it particularly attractive to cellular radio suppliers. As cutthroat competition in consumer electronics and wireless handsets have hammered supplier margins, M2M offers a variety of customizable applications and end-to-end solutions. "Where you have customization and application integration in a device market, you have the opportunity for a better profit picture," commented Michielsen."

Posted to the site on 16th April 2004