Rise of the machines heralds the next Industrial Revolution

3 Nov 2010

Global revenue from sales of Wireless Wide Area Networking (WWAN) modules for Machine-to-Machine (M2M) systems are set to rise nearly sevenfold from 2010 to 2014, according iSuppli.

WWAN M2M modules are devices that allow pieces of equipment to communicate with one another wirelessly. Using technologies such as GPRS, EDGE, CDMA 2000 and UMTS/HSPA, M2M WWAN systems employ mobile cellular networks to transmit data and information.

The WWAN M2M module market will generate total revenue of $1.0bn in 2010, up a robust 26.4pc from $813m in 2009. By the end of 2014, revenue will hit $6.5bn.

Employed in applications as diverse as meter reading for utilities, patient monitoring in healthcare and wireless connectivity for devices in automobiles, the WWAN M2M module market today is in its infancy compared to the more mature handset segment. However, tremendous upside potential exists for the nascent technology.

“Wireless internet access for connecting people to each other or for connecting people to machines has exploded over the last decade, driven by the rise of mobile computing and smartphones,” said Francis Sideco, principal analyst for wireless research for iSuppli. “However, a new wireless internet boom is shaping up in the M2M area. WWAN technologies increasingly are being used in M2M modules to enable new communication capabilities, in the process powering innovations and enhancing the efficiency of key markets, like utilities and healthcare.”

To date, the largest markets using WWAN M2M modules are wireless gateways and remote monitoring. However, healthcare is the fastest-growing vertical, with the market projected to consume 16.5 million units by 2014, up a colossal 155pc from 2009. WWAN M2M modules also are used in many other sectors, including vehicle tracking, automotive infotainment, security, payment and ruggedised computers.

The new Industrial Revolution

“When WWAN technology is used in M2M applications, the results can be transformative,” Sideco said. “Just as the Industrial Revolution in the 18th century upended manual labour and made production more efficient by introducing machinery, present-day WWAN-based M2M modules confer a level of communication capabilities on systems never thought possible.”

In healthcare, for instance, WWAN M2M modules can enable patients with cardiac disease to be outfitted with a device that collects and uploads data to a medical centre, even while the patients engage in normal day-to-day activities. Such an approach represents a dramatic departure from the traditional mode of diagnosis — one that might involve, say, tethering the patient continuously to a monitoring machine in a hospital.

Another area where WWAN M2M modules can find intensive application is in utilities, especially for automated meter reading, advanced metering infrastructure and smart grids. iSuppli estimates that for every household, at least three types of meters can be connected: electric, gas and water.

“The wireless connection of meters yielding monitoring and control capabilities are not only interesting opportunities,” said Sideco. “But if we are to optimise power consumption in a world of potentially dwindling energy reserves, they will prove to be indispensable.”

M2M obstacles

Despite the rapid growth potential expected for the WWAN M2M industry, a number of pressing challenges still need to be addressed if the current rate of adoption is to continue.

One problem is the extreme fragmentation of the M2M market — a state of affairs acknowledged by even staunch supporters. Given the disparate and often conflicting requirements of the various verticals, the industry has found it difficult to achieve sufficient scale and volume to spur continuous growth or blowout revenues.

Nevertheless, the emergence of key verticals is now allowing the value chain to solve a more limited set of problems — and by extension, to address a more specific set of requirements.

A second problem relates to the component-centric focus of the supply chain. Because the market is relatively new, many companies lack experience or know-how to integrate communication capabilities into their particular verticals. Adding to the difficulties, participants often experience the pain of dealing with multiple nodes of the supply chain, compounding the challenges that arise when unrelated suppliers work together.

The M2M ecosystem can help speed up the learning curve, iSuppli believes, if the industry shifted its focus toward solution-based, system-level collaborations, up to and including back-end and front-end software platforms, as opposed to the current emphasis on individual component sales.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years