9/9/11
Hyper Connectivity: Billions of
Connected Devices in 2020
“There will be no limit on the number of
connections as part of the mobile grid. Everything
has the potential to be connected .. Call it the 100
percent ceiling.”
– CEO Verizon
Wireless Connected Devices Ecosystem
Feature
Phones
Smartphones
Notebooks
Netbooks
Mobile
Computers
Air Cards
M2M
Tablets
MiFi
Security &
Home/Building
Automation
Consumer
Electronics
Transportation
& Telematics
Financial
Services &
Retail
Healthcare
/Wellness
Smart Grid,
Utilities,
Industrial
eReaders
Vehicle
Convenience,
Safety, &
Diagnostics
POS Terminal
Solutions
Wireless Patient
Monitoring
Smart Metering,
Smart Grid,
Utility Routers
Intrusion
Detection &
Safety Systems
Business Apps
GPS & Fleet
Tracking
Vending
Machines, ATM,
Kiosks
Patient Care &
Scheduling
Remote
Telemetry,
SCADA
Remote
Surveillance,
Access Control,
Building
Automation
Miscellaneous
Systems
Connected
Display,
Navigation,
Gaming
Others
Source: Frost & Sullivan.
Cellular M2M Communications - Market Forecasts
M2M connections on cellular networks in North America to approach 80-85 million in 2017.
These figures do not include laptops, netbooks, notebooks and tablets, which would be in
tens of millions as well(around 50 million) .
Source: Frost & Sullivan.
Key Market Realities in M2M
(Past , Present and the Future)
2001-2008
2009-2011
2012-2018
Market Adoption
Service & Support
Requirements
ARPU
Bandwidth
Consumption
3G/4G Usage
Low
Medium
High
Source: Frost & Sullivan.
Conclusions
 Exceptional growth expected in the global M2M communications market.
 Virtually all segments of the value chain need to work hard to maximize
the M2M opportunity.
 Ease of deployment ,and ease of management of existing implantations
will be the key to achieving long-term success in this market.
 Frost & Sullivan believes that eventually, both direct connections and
revenues from M2M could become larger than traditional mobile phone
business in several regions of the world, including North America – this
could take 20-25 years.
Vikrant Gandhi
Senior Industry Analyst, Frost & Sullivan
vgandhi@frost.com, 2103481000
About Compass Intelligence
Compass Intelligence, a global consulting and market analytics firm,
specializes in segment and vertical market intelligence for the high-tech
and telecom industries; and offers clients a tailored research experience
through excellent customer support. Compass Intelligence provides
subscriptions and research reports, insight videos, forecasts, competitive
analysis, market data and expert recommendations on multiple markets.
Find us on http://www.compassintelligence.com or follow us
on Twitter(www.twitter.com/CompassIntel).
If M2M was a Baseball Game,
What inning are we in?
Spring Training!
Why?
Why deploy M2M?
Market or Revenue Growth
Cost Reduction
How big is the market opportunity?
Quotes
“Soon, there will be more than one trillion connected devices…”
IBM TV Commercial
“…there will be 50 Billion connected devices by 2020.”
Hans Vestberg, CEO of Ericsson
“In this model, there is literally no limit on the number of connections that can be part of the
mobile grid: cars, appliances, buildings, roads, sensors, medical monitors and someday even
inventories on supermarket shelves. All of these have the potential to become inherently
intelligent — perpetually connected nodes on the mobile web.” Ivan Seidenberg, CEO of Verizon
“When you look at the numbers between M2M and social networking companies, LinkedIn
counts as its market every professional on the planet; that’s 1 billion people. Facebook is a little
bit more ambitious, it counts as a potential customer over 2 billion internet users and counting.
But if you look at M2M, we have a market which consists of over 7 trillion machines…”
Dale Calder, Founder of Axeda
“Once you embed it [wireless M2M application] in a business process, for example, customers are
probably not going to rip you [out] when your annual contract is up.”
Danny Bowman, Sprint Nextel Corp
U.S. Next-Generation M2M and Connected
Device Application Market Share, 2011
U.S. Next-Generation M2M and Connected
Device Vertical Market Share, 2011
Focusing on Transportation and
Logistics
• Roads and Vehicles: 4M miles of roads, 254M vehicles, 11.8M heavy
trucks and busses
• Rail: 140,000 miles of railroad tracks and 1.4M rail cars
• Air: 5,200 airports including 5 of the 25 largest in terms of air freight and
13 of the top 25 in terms of passenger traffic
• Pipeline: 1.7M miles of gas and oil pipelines
• Waterways: 25,000 miles of navigable waterways
• Shipping Containers: 14.8M TEUs globally. (At any time, over 1/4 could
be in the United States or inbound to the United States.)
Why now? Operator interest in
M2M intensifies
•
Many telecoms operators are seriously looking at the M2M opportunity (again)
– A stream of recent announcements, particularly partnerships and new organisations
– Some interesting customer wins
•
Why now?
– Economies of scale, especially in the market for M2M hardware
– Increasing importance of connectivity in consumer electronics devices, and the advent
of ‘cloud’
– Availability of device management software, which has become an integral part of M2M
platforms and makes it possible for solutions to be deployed on an industrial scale
– More realism from operators - more acceptance of partnership/wholesale role
•
Main obstacle to growth
– Absence of an agreed architectural framework for M2M - some limited progress towards
this from smaller players
•
M2M – poised for growth?
M2M market has been slow to deliver to
date:
–
–
–
–
–
•
What is driving change now:
–
Lack of scale - specialized industrial
applications in narrow industry verticals
Value chain is complex and fragmented
Lack of standardization
The lack of a new revenue model - M2M has
looked like a small market for operators
Need for partnerships - MNOs’ lack network
coverage.
–
–
–
–
–
Low ARPU
–
Local opportunities
Consumer
market
opportunity
Old revenue models
Lack of scale
Global M2M for
MNCs
Market
fragmentation
Lack of standards
MNO interest
Regulation
Falling
component costs
Cloud delivery
model
–
Corporate customer focus within mobile
operators
Falling costs as scale grows
Regulation, particularly in some verticals
Consumer electronics companies are
interested
New delivery and commercial models
Operators are recognizing that there is
value in M2M – it’s not (just) about ARPU,
it’s about margin.
Device management has become
mainstream
The size of the market opportunity
Operators do not want to miss out on a
potentially huge opportunity, which some see
as many times the size of the current
(personal) mobility market.
The role for the operator in the M2M
value chain
Consulting/sales
Customer
Customer care
Integration of M2M solution
The M2M value chain
Applications support
Applications development
Billing & reporting
Connectivity monitoring & support
Connectivity
Device provisioning & support
Hardware customisation & testing
Hardware manufacture
Operator core positioning
B2B value chain
Key decision areas for operators
Segments
B2B
B2B2C
Applications
Vertical
Horizontal
M2M approach
End-to-end
Revenue
share
Connectivity
Revenue model
Wholesale
Coverage
Global
Local
Organisation
Decentralised
Centralised
Platform
DIY
Outsource
Partnering will be essential,
even for core services
M2M issue
Decision point
What is M2M? - Key Horizontal
Applications
•
•
Strict definition: communication
where a remote machine is
monitored and/or controlled by a
central server.
Broad definition: the extension
of connectivity to consumer
electronics products, particularly
where the role of the network
operator in providing this
connectivity is not apparent to
the end user, and where the
provider of the consumer device
presents itself as the service
provider.
Broad definition: based on lack of
retail relationship for operator
E-reader
Narrow definition:
Based on lack of
user interface
Smart metering/grid
Satellite
navigation
device
Track and trace
Remote sensors/monitoring
Digital
picture
frame
Vehicle telematics
“White Label Network Devices”*
Connected
camera
* Where the overall
proposition presents the
connectivity as an attribute of
the device rather than as a
service provided by a network
operator.
Summary
•
Operators recognise there is a significant opportunity in M2M
–
–
•
Learn from other operators’ experience
–
•
–
–
Link to the enterprise business unit – the majority of early leads will come from business customers, even if applications
are B2C
Opportunities will span fixed and mobile
Build a core of dedicated expertise for M2M, but use and train the enterprise sales team and channels
Focus on obvious first verticals – these are not country-specific
–
–
•
Partner for the M2M platform, at least in the early days
Partner for applications development – you will need to foster M2M application ecosystems
You must build robust and friendly partnerships with complementary providers as the M2M market matures and wider
opportunities grow
Provide an organisational focus for M2M
–
•
Operators have a much more realistic appreciation of their own position in the M2M value chain than in the past
You must partner to profit
–
–
–
•
M2M's time might finally have arrived
The market has developed in a fragmented way – it is not one opportunity, but a collection of opportunities
Logistics & fleet management
Vehicle telematics
Local regional opportunities will exist
–
–
–
–
Process monitoring in manufacturing
Utilities – linked to regulation
Retail - POS
Healthcare
Mike Sapien - Ovum
Mike.sapien@ovum.com
(760)931-8025
Who We Are
Why We Are Relevant to M2M
Industry Impact
The Transported Asset Protection Association (TAPA) represents
businesses fighting back against cargo crime that want to use realtime intelligence and the latest preventative measures to protect
goods in the supply chain.
Manufacturers ~ Carriers ~ Insurers
AMERICAS
EMEA
ASIA
Abbott Laboratories ADT AFC Worldwide Express, Inc. Air and Ground World Transport Allianz Global Corp
& Specialty Alterra E&S (formerly Max Speciality Ins.) Amerifreight, Inc. Amgen, Inc Aon Risk Services APL
Logistics, Ltd. Applied Materials Associated Global Systems Astellas Avnet, Inc. Best Buy, Inc. Brightpoint,
North America Bristol-Meyers Squibb Cargo Screening Solutions Challenger Freight Systems, Inc. Crane
Worldwide Chubb
Insurance
CEVA Logistics
Chartis
Insurance
Dell,East
Inc. DHL Express
Today,
in CVS/Pharmacy
the Americas,
Europe,
the
Middle
Americas DW Morgan Eastman Kodak Eli Lilly Expeditors International Falvey Cargo Underwriting
and Africa
(EMEA),and
Asia,
TAPA’s
membership
Flextronics International
FM Global
Cargo Insurance
Co Freight
Logistics,
Inc. FreightWatch International,
USA Genzyme Corporation
Glaxo Smith
Kline Hewlett-Packard
High Tech Cargo
Insurance Program
is at its highest
ever
level – and growing
every
(Insurance Associates of the Southwest) Intel Corporation International Business Machines (IBM) Johnson &
month.
The
700+
members
include
Johnson Kingston
Technology
KraftAssociation’s
Foods Kuehne & Nagel
LoJack
SCI Marsh Risk
& Insurance Services Max
Specialty Insurance
Co. McCabe
Corporation
MillerCoors
Motorola, Inc Motorola
many
of theAssociates
world’sMicrosoft
leading
consumer
product
Solutions National Air Cargo National Retail Services New Breed Logistics Nike Nippon Express USA, Inc.
brands
well Logistics
as their
logistics
andOHL
transport
NNR Global Logistics
USA, as
Inc Ocasa
Solutions,
Inc. Pfizer
Purolator USA OnAsset
Intelligence Performance
Teamwith
Panalpina
Inc. Purdueannual
Pharma Technologies
Quantum Corporation
providers
combined
sales of over
Research In Motion (RIM) R&L Carriers Relcor Samsung Telecommunications Sandisk International SanofiUS$900
billion,
lawSealock
enforcement
agencies
(LEA),
Aventis Sanofi-Pasteur
Seagate
Technology
Security Systems,
Inc. Shasko
Global Logistics Smith &
Associates Sonyinsurers
Electronics, Inc
Spansion
Transportation Starr Marine Agency, Inc. Synnex
and
otherSpeedmark
trade associations.
Corp. Tech Data Corporation Travelers Tyden Brooks (formerly EJ Brooks Company) UPS Watson
Pharmaceuticals Willis of New York, Inc. Xerox Corporation Yusen Air & Sea Service (USA) Inc. Zurich
Services NA
Relevance to M2M
TAPA
–
–
–
–
Global Standards
Freight Security Requirements (FSR – revised in 2011)
Truck Security Requirements (TSR – due 2012)
Parking Standards (Europe only)
Air Cargo Standards (TACSS – EMEA and ASIA
IIS (Incident Information Service)
Benchmark Studies
Cargo Theft: Low Incidence, High Impact Events
2010: The volume of cargo theft is consistent with 2009, but value per loss continues to increase dramatically
•The average value per loss increased by 69%
•Extreme high value thefts are occurring more frequently:
– $76 million warehouse theft, Enfield, Connecticut (pharmaceuticals)
– $37 million full truckload loss, Carlisle, Pennsylvania (pharmaceuticals)
– $10 million electronics warehouse theft, DFW
•Trends in 2010:
–Televisions are the most sought after electronics products
–Pharmaceutical theft rates equal to 2009, yet value of shipments sharply rising
–Multi-load theft incidents becoming more common
SHIFTS IN FOCUS
From
•Assessing General
Routing
•Requiring Checks of
Documentation
•Different
Government
Agencies for Different
Cases
To
•Risk Assessments Per
Individual Shipment
•Checking for
Fraudulent
Documents and ID’s
•One platform for
interacting with
multiple agencies
9/9/11