Opportunities and Challenges in Machine-to-Machine Communications
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ABHISHEK ROY
SYSTEM DESIGN LAB,
SAMSUNG ELECTRONICS, SUWON.
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5 Cellular M2M Communications – Vertical Segmentation
7 Cellular M2M Communications – Key Drivers Summary
2 U.S. Cellular Market—Market Engineering Measurements
1 Connected Devices Ecosystem – Market Segmentation
3 U.S. Mobile Communication Markets – Connections, Voice Revenues, Data Revenues
4 Machine-to-Machine (M2M) Communications – A Simplified View of the Value Chain
8 Cellular M2M Communications – Key Challenges Summary
9 Cellular M2M Communications - Market Forecasts
10 Cellular M2M Communications - Other Key Highlights
11 Cellular M2M Communications – Overview of Operator Strategies
6 Key Market Realities in Cellular M2M –Past , Present and the Future
12 Cellular M2M Communications – Key Conclusions
Outline
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Connected devices ecosystem- Market segmentation Mobile and Wireless connected ecosystem
Feature Phones
SmartphonesMobile
ComputersTablets M2M
Notebooks Netbooks Air Cards
Transportation & Telematics
Financial Services &
Retail
Healthcare /Wellness
Smart Grid, Utilities,
Industrial
Security & Home/Building
AutomationOthers
Vehicle Convenience,
Safety, & Diagnostics
POS Terminal Solutions
Wireless Patient Monitoring
Smart Metering, Smart Grid,
Utility Routers
Intrusion Detection &
Safety SystemsBusiness Apps
MiFi
Connected Display,
Navigation, Gaming
eReaders
Consumer Electronics
GPS & Fleet Tracking
Vending Machines, ATM,
Kiosks
Patient Care & Scheduling
Remote Telemetry,
SCADA
Remote Surveillance,
Access Control, Building
Automation
Miscellaneous Systems
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U.S. Cellular Market—Market Engineering Measurements
Market Overview
Mobile Connected Devices Market: 2010-2017
6 Year Forecast Feature Phones
6 Year Forecast Smartphones
6Year Forecast Mobile Computing
6 Year Forecast M2M Market
6 Year Forecast Tablets
(CAGR)
Connections:
Data Consumption:
-21.0%
-2.0%
(CAGR)
Connections:
Data Consumption:
20.4%
49.1%
(CAGR)
Connections:
Data Consumption:
18.4%
36.7%
(CAGR)
Connections:
Data Consumption:
49.0%
91.8%
(CAGR)
Connections:
Data Consumption:
22.3%
38.6%
Market Stage
Mature
Market Revenues
$172.6 B
(2010)
Mobile Connections
311.5 M
(2010)
Average Revenue Per Connection
~$52.50
Connections at End of Forecast Period
418.0 M
(Projected 2017)(Revenue/Connections/12)
Stable IncreasingDecreasing
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Connections and penetrationexpected to exceed 400 million and125 percent respectively by 2017.
Wireless will become the prime dataconnectivity medium for multipletypes of devices which will driveadoption.
Total market revenues to reach $240 billion by 2017. Within the nextfive years, data revenues will exceedvoice revenues.
Eventually, all services – includingvoice will be packet-based and allwe will have it plans for ‘data’.
U.S. Mobile Communication Markets – Connections, Voice
Revenues, Data Revenues
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Machine-to-Machine (M2M) Communications – A Simplified View
of the Value Chain
In its simplest form, M2M communications refers to data sharing between endpoints (electronic devices) and an enterprise
backend systems through a wireless/ wireline channel. The device may be used for monitoring, control and notification, or
information sharing and presentation purposes.
Data Collection
Data Sharing
Data Interpretation
M2M Devices and Endpoints
Wireless / Wireline Networks
Enterprise Backend Systems
Key Functions
Key Enablers
Key ParticipantsDevice & Module
VendorsAccess Network
Providers Application /
Platform Providers
I II III
Communication Flow
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Cellular M2M Communications – Vertical Segmentation
•Laptops/Netbooks/Notebooks•eReaders• Others - Connected Consumer Display, Picture Frames, Others
Consumer Electronics
• Vehicle Convenience & Safety• Vehicle Diagnostics• Others - Fleet & Asset Tracking, Others
Transportation and Telematics
• Patient Monitoring & Reporting• Adherence & Reminders• Others - Patient-Provider Collaboration(video communication, image uploads & management), Others
Healthcare
• Intrusion Detection & Safety Systems• Remote Surveillance & Access Control• Others - Roadside Speed Monitors, Automatic Lighting Controls, Others
Security & Safety
Utilities & Industrial Financial Services & Retail
• Smart Grid Components• Industrial Monitoring & Control Applications and Devices• Others - Industrial Routers, M2M Gateways, Agriculture Systems, Others
• POS Terminals & Devices• ATMs, Vending Machines, Kiosks• Others - Digital Signage, Asset Tracking
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Key Market Realities in Cellular M2M – Past , Present and the
Future2000-2008 2009-2011 2012-2016
Market Adoption
Customer Care Requirements
ARPU
Bandwidth Consumption
3G/4G Usage
Medium HighLow
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Cellular M2M Communications – Key Drivers Summary
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Cellular M2M Communications – Key Challenges Summary
Cellular M2M Communications – Key Challenges Summary
Immense Service & Support
Requirement for Evolving M2M
Market
Need to GeneratePrice Premium –
‘Beyond Bandwidth’
Pricing
Driving Adoption of 4G
Device & Module Certification
Device & Module Certification
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Cellular M2M Communications - Market Forecasts
M2M connections on cellularnetworks in the United States toexceed 75 million in 2017.
These figures do not include laptops,netbooks, notebooks and tablets,which would be in tens of millionsas well .
Top three categories by connectionswill likely be Transportation andTelematics, Consumer and theUtilities and Industrial.
In many cases, a single endpoint(such as a rugged router) willsupport a large number of otherconnected devices. The ‘wireless-supported’ vertical breakdown willlikely look very different then.
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Cellular M2M Communications - Market Forecasts (contd..)
A large majority of cellular M2M connections still use 2G-2.5G networks. This is changing
rapidly due to a strong adoption of consumer devices as well as various other high-
bandwidth applications across the other verticals ( in-car infotainment, security and
surveillance, digital signage, and others).
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Cellular M2M Communications - Other Key Highlights
5
6
2
Different pricing for different speeds
Role of M2M cloud to become increasingly important going forward
Base data access revenues of more than $ 4.0 billion by 2017
1 Annual data consumption of nearly 7000 million MB by 2017
3 4G module pricing to become less than half of what it is today
4 Tiered pricing for high-bandwidth M2M applications to become more prevalent
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Cellular M2M Communications – Overview of Operator Strategies
Optimize Data
Pricing
Certification & Training
Other Value-added
Services
Promote M2M
MVNOs
Partnerships &
Ecosystem
The Network
• Partner with specialized M2M platform vendors to simplify device on-boarding and management
• Focus on vertical solutions
• Position high-speed networks for high-bandwidth M2M apps
• Complete network enhancements to support M2M
• Tiered Pricing• Low pricing for slower
networks, off-peak hours
• Reduce time for network certification
• Approve devices with approved modules faster
• M2M innovation centers
• Multiple pricing options – large vs. smaller upfront investments
• Reduced limits of liability
• Rely on specialized M2M service providers
• Enable business collaborations through their network platforms
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Cellular M2M Communications – Key Conclusions
Strong growth expected in the M2M communications market in the United States
Virtually all segments of the value chain working hard to support growth of the M2M
segment
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 the United States – this could take anywhere from
12 to 24 (or 30) years.
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ReferencesOpportunities and Challenges in the U.S. Cellular M2M Communications Market, by Frost and Sullivan on Jul 14, 2011
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Thank you
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