Like the smart grid market to which it is deeply linked, the machine-to-machine (M2M) market is huge and difficult to precisely define. It is as familiar as a windshield-mounted GPS system and as obscure as a refrigeration unit in a truck alerting the corporate system that something is amiss and the quartered chickens are starting to thaw.
Using certain definitions, it could include smart grids, other forms of home automation and dozens of other applications in addition to vehicle tracking. There are at least a couple of themes running through each of these applications: They generally are low on data (it doesn't take much capacity to tell somebody to turn left) and deployed ubiquitously (suffice it to say, "electronic picture frames").
AT&T recognizes the value of this market. During the past three-quarters, the company said, it has added almost 3.4 million connected and M2M devices, bringing its total to almost 6.7 million. InformationWeek reports that the carrier said it has certified more than 850 devices, which the story says range from eReaders to electronic pill dispensers that alert a designated person if they are not opened (and medicine presumably taken) at a preset interval.
Despite the massive potential of the market, M2M doesn't seem to be translating into a landslide business-yet. This week, ABI Research released a study of the cellular M2M market. The release notes what can best be called a malaise. In 2008, shipments and revenues decreased compared to 2007. Volumes rose last year, but declining unit prices -- caused by consolidation and competition -- put revenue behind 2007. The firm says the market will reach $3.8 billion in 2015.
Last month, Frost & Sullivan released research suggesting that the world satellite M2M market generated $726 million in revenue last year. The number, the study says, will reach $1.6 billion in 2016. North America has 62 percent of the market share, while the Asia-Pacific region will experience the greatest growth. The release suggests that satellite M2M is a unique and higher-cost segment compared to terrestrial platforms. The growth rate-revenues under the Frost & Sullivan model will more than double over the period of the study-suggests increasing demand and lower equipment costs. But, still, the total isn't overwhelming.
It's a bit surprising that two sources of real numbers on the M2M sector both are less than bullish. After all, the market, for intents and purposes, is limitless. Perhaps it's a matter of defining what to count in a study, or simply confusion over changing definitions. In any case, a couple of lukewarm reports shouldn't be enough to reverse the common sense idea that the market can -- and eventually will -- be massive.