Informa Telecoms & Media: Machine-to-Machine Connections and Revenue are Below Expectations

The Machine to Machine (M2M) market is diverse and with the wide adoption of cellular technology, M2M technology is available to organizations all over the world. The M2M devices that run on technologies like GSM, GPRS and W-CDMA have changed the way we live, work and play.

Recently, Informa Telecoms & Media (News - Alert) published a report on the M2M market and the results of this market segment are not encouraging. Machine to Machine connections were up 22 percent last year, but still only represent a fraction of ‘human’ mobile network connections, according to the report. M2M revenue represents just 0.5 percent of mobile operator service revenue.

The latest research says that the overall health of M2M ecosystem is not good. The report says that M2M growth is far more behind the industry’s expectations, with 132 million mobile connections in June and $5.68 billion revenue generated in the previous 12 months.

Jamie Moss, senior analyst for M2M at Informa Telecoms & Media, said in a statement, “M2M connections and M2M revenues are neither as high nor growing as rapidly as some are anticipating. However, this does not detract in the slightest from the validity - or long-term prospects - of the market. Indeed, M2M could do well without the hype that is associated with every ‘next big thing’, for it operates on entirely different grounds to consumer services and as a consequence needs to be judged by different standards.”

This report is based on the data generated from fleet tracking, while newer services such as digital signage are also showing strong average revenue per connection.

“Most wireless carriers will seek to improve their revenue potential beyond simple connectivity as much as possible. Platforms dedicated to value-added service creation for M2M are already being deployed by carriers, but how successful they will be in addressing this portion of the market, currently dominated by small independent specialists, has yet to be demonstrated,” said Moss.

Want to learn more about M2M technologies? Don’t miss the M2M Evolution Conference, collocated with ITEXPO West 2012 taking place Oct. 2-5, in Austin, TX.  Stay in touch with everything happening at M2M Evolution Conference. Follow us on Twitter.