According to Ovum, the machine-to-machine (M2M) market is expected to reach $44.8 billion by 2018. Further, the Asia-Pacific market will account for more than a third of the total revenue generated by the M2M market by 2018.
Revenues for the M2M market will grow at a slower pace than the number of connections, reflecting the increasing competitiveness of the market and the extension of M2M into lower-value applications. The research firm forecasts that the number of global M2M connections will more than treble from 106.4 million in 2012 to 360.9 million in 2018 growing at a compound annual growth rate of 22.6 per cent.
Regions such as Asia-Pacific and the Middle East and Africa will witness the fastest growth in this space. Between 2012 and 2018, M2M revenue in Asia-Pacific will grow to $15 billion, at a compound annual growth rate of 26.5 per cent. Further, the most important industry verticals in 2018 will be healthcare, manufacturing, and energy and utilities, which are forecast to generate revenues of $7.9 billion, $7.1 billion, and $7 billion respectively by 2018.
Ovum emphasises that operators have two options for capitalising the business opportunities offered by the M2M market. They can either just stand back or simply offer connectivity for M2M services or play a more active role in promoting M2M services by making provisions for end-to-end solutions. The research firm points out that providing connectivity is a simple but a smaller opportunity for operators. However, making provision for the end-to-end solutions will require operators developing new skills and competencies, and defining new kinds of relationship with systems integrators and software development.
Going forward, service providers need to build robust relationships with device manufacturers and system integrators. If an operator wants to position itself as an end-to-end solution provider, then it needs to develop associations with a global system integrator. This would help an operator leverage its position and role within the enterprise segment more effectively.
