25 May 2012

Berg predicts strong growth for M2M devices

Research from Berg Insight reveals the number of shipped consumer M2M devices with cellular connectivity grew to 7.1 million worldwide in 2011, up from 6.4 million in the previous year.

According to the analyst, this relatively new breed of connected devices – neither classified as handsets, PCs, tablets nor traditional M2M devices – has strong growth potential.

E-readers and PNDs are the most common consumer M2M devices already shipping in millions. Handheld gaming consoles, personal tracking devices and wellness devices are promising categories as well.

In the next five years, shipments of consumer M2M devices are forecasted to grow at a compound annual growth rate of 39.8% to reach 37.9 million devices in 2016. Consumer awareness, decreasing prices of modules and chipsets together with massive global deployments of high speed cellular networks such as LTE will have a positive impact on the market.

"Cellular connectivity gives the freedom of being connected everywhere and there are already 12.7 million consumer M2M devices in use worldwide," says Johan Svanberg, Senior Analyst, Berg Insight. "In a not too distant future, a substantial part of all content and services will be delivered through mobile channels. All companies – from device vendors, content owners to service providers – need to prepare for this change and have a well thought out mobile strategy in order to stay relevant."

Operator data

According to recent figures disclosed by leading global mobile operators, the number of machines using cellular communication also continues to grow at a high rate in key world regions. As the installed base grows, Berg indicates that year-on-year growth rates are stabilising at around 15–30%.

Among the mobile operators that officially report M2M subscriber statistics on a quarterly basis, AT&T reported the highest figure in Q1-2012 of 13.3 million, up 25 percent year-on-year. Vodafone reported 7.8 million M2M subscribers at the end of the financial year ending March 2012, up 47 percent from the previous year.

Japanese operators NTT DoCoMo, KDDI and Softbank recorded year-on-year growth rates in the range 20–35 percent and reported between 1.9 million and 2.4 million M2M subscribers each.

Many of the leading global mobile operators do not report M2M subscribers separately. Among these Berg Insight estimates that China Mobile has the largest installed base of around 15 million, followed by Verizon Wireless, T-Mobile and Telefónica at around 7–9 million.

T-Mobile USA is the only entity in the Deutsche Telekom group disclosing M2M subscriber data, reporting 2.7 million at the end of Q1-2012. Other major M2M communication providers in Europe and North America include Orange, Telenor and Sprint, which had approximately 3–4 million M2M subscribers each.

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