At its most basic level M2M relates to connecting remote sensing, monitoring and actuating devices. However, it is about much more than that. Specifically it concerns enabling new business models and processes through the application of connectivity. The addition of this connectivity can provide a diverse range of benefits:
- Increase IT efficiency for business and government. Public and private sector organisations can gain significantly in terms of automated business process management, enterprise resource planning (ERP) and streamlining of customer relationship management (CRM) processes.
- Help products gain or maintain a competitive edge. Connectivity can facilitate the addition of new features to products and services. For instance a consumer electronics equipment manufacturer can add a cloud storage solution for a camera, or an insurance company can offer a real-time usage-based insurance solution. The opportunities are endless.
- Enabling companies to comply with regulation. Certain national and multi-national (i.e. EU) regulation requires either explicitly (e.g. eCall) or implicitly (e.g. regular utility meter reading) some form of connectivity. These regulated applications provide the strongest growth push for M2M in the next 2-3 years.
- Saving the planet. M2M is concerned with the real-time dynamic management of existing processes. This typically allows the processes to work more efficiently. Take, for instance, car parking. Implementing a managed parking system utilising M2M can reduce the amount of time spent by drivers looking for a space, thus reducing carbon footprint.
By 2022 there will be 18 billion M2M connections globally, up from approximately 2 billion today (as illustrated in Figure 1), an annual growth rate of 22%. Today approximately 23% of connected devices can be categorised as M2M, a figure that will grow to 61% in 2022. The biggest sector in 2022 will be intelligent buildings with 37% of all connections, dominated by heating, ventilation and air-conditioning (HVAC) and security systems. Accounting for 32% of connections, the second biggest is consumer electronics, including games consoles, music players, cameras and white goods. These are followed by utilities (10%) and automotive (8%). Short-range technologies will dominate M2M, accounting for 73% of connections in 2022. Cellular technologies will grow from 146 million devices at the end of 2011 to 2.6 billion at the end of 2022.
Today M2M accounts for only around 2% of cellular connections. By 2022 it will account for 22%. By 2022 3G and LTE will between them account for almost 90% of connections, driven by requirements for higher bandwidth applications and demand for technology future-proofing.