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Machine-to-Machine Connections to reach 2.1 Billion Devices by 2020

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The number of machine to machine (M2M) device connections worldwide will grow from 62 million in 2010 to 2.1 billion in 2020, according to the latest report from Analysys Mason.

The report estimates year-on-year growth rates of between 36% and 52%, suggesting that M2M will be one of the fastest-growing connectivity sectors in the next decade. All participants in the M2M supply chain have the opportunity to drive this growth. As take-up of mobile handsets slows in the developed world, M2M presents itself as one of the next opportunities to connect commercial and consumer devices.

"Smart electricity meters, ubiquitous surveillance cameras, connected Porsches - all are in our M2M future," says Steve Hilton, Principal Analyst at Analysys Mason and author of the report. "The fastest-growing sectors will be utilities, healthcare and security, although their relative size will vary dramatically. Each mobile device connection can generate between USD0.25 (EUR0.18) and USD40.00 (EUR29.34) per month."

The most significant inhibitor to market growth is the M2M industry's cumbersome supply chain, which hinders the development of industry-standard M2M solutions. This supply chain spans from chip and SIM manufacturer to IT vendor to communications service provider (CSP) to application vendor to systems integrator (SI). Almost all M2M implementations are custom designed, which means that their overall ROI is generally lower than that of other IT solutions. Unless enterprises can calculate an acceptable ROI, they will hesitate to adopt M2M solutions, and consumers will only adopt them if the devices are perceived to be good value for money.

"CSPs, global SIs and vendors should acquire best-of-breed M2M application and platform providers in order to reduce the complexity of the supply chain," recommends Hilton, who also leads Analysys Mason's Enterprise research programme. "All participants in the M2M supply chain must focus on the utility, automotive and transport, security and healthcare sectors. The automotive and transport sector accounts for most M2M connections today, but we expect the utility, security and healthcare sectors to show highest levels of growth."

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Tags: machine-to-machine  m2m  connect