M2M: The third industrial revolutionIt is a top-level decision: with a single resolution, the European Union (EU) has paved the way for further growth by leaps and bounds for machine-to-machine communications (M2M). It has not done so to give this particular industry a boost, but mainly because it is concerned about its citizens’ safety.
Passed in June 2012, the EU resolution states that by 2015, all new cars must be fitted with an eCall system. With the system, an in-car sensor contacts emergency services if the vehicle is involved in a traffic accident, resulting in faster response times.In the U.S., some automakers already offer their customers similar in-vehicle security systems, but there is no nationwide statutory requirement.
The EU ruling has opened the door to new markets and global revenue opportunities. In the first half of 2012 alone, 6.7 million cars were newly registered in EU member-states, and less than one percent had an in-car eCall system.
The eCall system is an example of the consumerization of M2M communications – but it’s only the beginning of the wide range of industries and applications this technology will offer in the coming years.
Global growth market
From automotive to engineering to energy, nearly all industries anticipate achieving high growth rates through the implementation of M2M. The main reasons are that mobile networks now provide nearly total coverage, and the number of possible applications is practically unlimited.
Vehicles in logistics convoys can report their location, mileage and fuel level; freight cars and packages can send their location automatically to a tracking service, and smoke alarms can notify the fire service all by themselves.
More than 100 million vending machines, vehicles, containers and other devices are already connected with each other by a mobile wireless link, and their number is set to rise to around 360 million by 2016, according to the market analysts at Berg Insight of Sweden.
The market researchers at ABI Research go even further: they forecast 453 million connections in 2017. And according to a recent Machina Research survey, the number is set to increase to 12.5 billion by 2020, with global sales generated by M2M totaling EUR 743 billion. These analysts’ figures may vary widely, but even the most conservative estimate leaves no doubt that an M2M boom lies ahead.
Opportunities for the energy industry
The M2M market is still fragmented. In German engineering and plant construction, only one in four companies use M2M applications, according to a study by RAAD Research. M2M technology’s major global breakthrough has yet to happen. The problem is said to be that it is difficult to develop standardized components for M2M communication because, according to the study, the machinery is too heterogeneous.
Individual applications currently exist wherever the developers’ imagination is especially creative. Implementing M2M solutions is not very costly and the tariffs are less expensive than the rates charged for using a cellphone. The initial extra cost of the M2M application has often been recouped within a year.