Prepare for Massive and Explosive Cellular Growth

Carl Weinschenk

It's generally assumed that the growth in mobile connections during the next few years will be great. But just how great may not be apparent to some people.

 

These people should understand that the growth will be explosive and massive. The trade group GSMA said that cellular connections will increase from 9 billion now to 24 billion by 2020. Mobile connected devices will increase from 6 billion to 12 billion over that period. The study was conducted on behalf of the GSMA by Machina Research. The firms found that the value of the market will be $1.2 trillion, a seven-fold increase of its current value.

 

The pie will be split several ways, according to the story at GigaOM:

Where exactly are the opportunities? The study found that good collaboration with the consumer electronics industry could generate direct revenues of $445 billion. Other sectors that stand to benefit are automotive, which could generate $202 billion in revenues; health, which could see $69 billion; and utilities, which could increase by $36 billion in revenue by 2020.

There are a couple of things that should be noted. One is that this simply isn't going to happen without a successful rollout of IPv6. Also, even if people average more than one device, the fact that there are only about 6.9 billion people in the world today suggests that the majority of the 24 billion connections will be of the machine-to-machine (M2M) variety.

 

IPv6 will be needed, of course, simply because there aren't nearly enough addresses using the old system. The transition is chugging along with the speed of a moderately fast glacier. But indications are that the job will be done in time to stave off disaster. Wes Simpson at TV Technology provides a brief and moderately technical overview of the technology involved. What the cable industry does on IPv6 is important, and there were two positive pieces of IPv6 news last week. CableLabs said that an interop it ran this summer had succeeded and the Society of Cable Telecommunications Engineers started an IPv6 working group.

 


On the M2M front, ABI Research released research last month that the cellular M2M sector had a "more difficult than expected year" in 2010, according to the release. But the difficulty turned out to be more on margins than on the unit sales side. The industry shipped almost 34 million units, though revenue fell from $996 million to $841 million.

 

The greatest increases in mobility will be transformative - and it will happen quickly. In particular, the strength of the verticals suggests that even GSMA/Machina's numbers may be conservative.



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