If you�re in charge of new subscriptions for a large telecom, here�s something to keep you up at night: in the U.S. and Europe there are now more cellphones and mobile devices than people.
�We have reached a saturation point with mobile,� according to Robin Duke-Wooley, CEO of U.K.-based Beecham Research.
So what can telecoms do when the market for human customers reaches full saturation?
The answer is to look to machines for new customers, Christoph Inauen, head of new business development for Nokia Siemens Networks, said at a session on new market opportunities at Wavefront�s February 7 to 9 mPower M2M conference, which was held in Vancouver and sponsored by Sierra Wireless, Rogers Canada and the Canadian Digital Media Network.
�[Communications companies] will play a very significant role in the machine-to-machine business,� Inauen said.
While there are many ways to transmit data between devices – Bluetooth, ZigBee, RFID (radio frequency identification), WAN (wide area network) – wireless, Internet and other communications companies are likely to be the biggest beneficiary of the M2M boom, Inauen said, because they already have significant wireless infrastructure in place.
�In the cellphone industry last year, in Europe and the United States, net new adds hit zero,� Sendum Wireless Corp. president and CEO Wayne Chester told Business in Vancouver.
�That�s why everybody is scrambling trying to find new places to go. The goldrush is over. That�s why M2M is the future for these guys, because that�s the only way they�re going to get new adds, unless they get it from their competitor, which is a zero-sum game.�
It�s not just telecoms and device manufacturers who stand to benefit from the growth in the M2M trend. Because communications companies are unlikely to have the necessary expertise in areas where M2M will be deployed – health care, utilities, the automotive industry, consumer electronics – there will be opportunities for those sectors to partner with them.
�There is tremendous potential for partnerships,� Inauen said. �We�re at the beginning of a huge market opportunity for all of us.�
Globally, the M2M industry – otherwise known as the �Internet of things� – is already worth $18 billion, said Duke-Wooley, who was one of mPower conference�s guest speakers. That figure is expected to rise to $30 billion by 2014.
Local technology companies are already doing brisk business in the M2M sphere.
Richmond�s Sierra Wireless manufactures embedded devices that allow communications with machines, including cars, and companies like Sendum, Webtech Wireless and In Motion Technology Inc. are using M2M technology in vehicle telematics.
In Motion makes a mobile gateway called onBoard that turns a vehicle into a mobile hotspot. The device is used by Rowan County�s Emergency Services in North Carolina.
Chester pointed out that the biggest market for B.C. companies involved in vehicle telematics is the U.S. He said that more than 80% of Sendum�s business is in the U.S.; Canada makes up only 5% of its sales.
While there are many potential applications, Wavefront CEO James Maynard said �transportation is [currently] the big vertical.�
Brian Anderson, vice-president of marketing solutions for Sierra Wireless, said a number of technologies have converged recently to make M2M more practical and widespread.
Computing power is going up, while the price for hardware and wireless data is going down.
�The ROI is such that where, 10 years ago, it was only practical to connect a $10 million MRI, today it�s practical to connect a $200 coffee machine,� Anderson said. �You�re already seeing connected cameras that have WiFi that can automatically download your pictures.�
One area Anderson expects to see M2M widely used is in electric car charging systems. He sketched a scenario where electric car owners will use their smartphones to reserve a time and location to charge their electric cars close to where they work, and use an RFID badge to activate and pay for it when they get there.
�All that is done with M2M communications,� he said.��
