3G and 4G to Dominate M2M Market, Largely Driven by Automotive Industry

The worldwide machine-to-machine (M2M) market will be dominated by 3G and 4G modules by 2018 and the automotive industry will be a major driver. Research firm Berg Insight predicts the cellular modules will overtake 2G by 2017, and a general trend toward cellular M2M devices connected to HSPA and LTE (News - Alert) networks will drive uptake.

According to Berg senior analyst Tobias Ryberg, most traditional M2M applications require higher data consumption, which in turn creates the need for high-capacity networks. He added that the automotive industry is fueling M2M adoption and is delivering on the idea of connected cars with mobile broadband connectivity.

GM and Audi, for instance, introduced car models with embedded LTE in the U.S. this year. GM’s 2015 Chevrolet Malibu is slated to be the first 4G LTE GM vehicle and the company plans to add more than 30 additional models through its Chevy, Buick, GMC and Cadillac brands by the end of the year. The connectivity will enable a variety of new features like built-in Wi-Fi hotspots capable of pairing up to seven devices along with improvements to OnStar safety and other security services.

AT&T (News - Alert) is providing the connectivity for GM as well as Audi. The 2015 Audi A3 will come with embedded 4G connectivity as well and the company plans to extend that capability to its entire lineup.

Other factors contributing to 3G and 4G growth in the M2M space including the general phasing out of 2G in many areas. AT&T has plans to completely ditch its 2G network by the end of 2016 and Japanese mobile operators have already migrated from 2G to 3G and 4G. This transition will happen in Europe as well, but more slowly according to Berg Insight. The research firm predicts that 2G will still dominate there well beyond 2020 in most countries.