Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
Machine-to-machine solutions are changing how we live and work. Smoke alarms do not just sound an alarm; they send an alert to the fire service at the same time. Trucks regularly relay their location to the logistics company and beverage vending machines text to order supplies. The number of connections with or between M2M devices is set to increase from two billion now to 18 billion by 2022, or so the market research people at Machina Research say. By then, most of these connections will be in China, but the analysts anticipate the highest earnings from M2M in the United States. For 2022, Machina Research forecasts global sales revenues totaling $1.2 trillion. By way of comparison, the experts calculated global sales in 2011 as having amounted to $200 billion. These figures may vary from survey to survey, but even conservative estimates leave no doubt that the market will experience strong growth in the years ahead.
There are many reasons for this swift growth. Falling hardware costs and special data tariffs lower the threshold to enable smaller companies to go for M2M. New regulations are another important factor. The European Union, for example, has just approved legislation requiring all new automobiles to be equipped with an M2M emergency call system from 2015. In the event of an accident, ECall alerts the emergency services automatically, relaying the vehicle’s exact location.
Wide range of application scenarios
M2M security solutions over and above ECall are among the most important growth areas. Home security from Securitas, for example, helps you to protect your home. The central unit of the alarm system comes with a GSM module and can be operated with up to 50 wireless detectors. In an emergency the central units sends the data by the mobile phone network to the Securitas service center. Previously agreed steps are then initiated, such as sending the mobile security service round to check, thereby enabling break-ins to be prevented or at least solved.
The experts at Machina Research also foresee strong growth in the healthcare sector. In view of rising healthcare costs and an aging population, the potential for M2M solutions that reduce costs, automate processes or collect healthcare data is enormous. A solution developed by Limmex, for example, enables older or sick people to enjoy greater security and independence in their daily lives. The Swiss watch manufacturer has built an emergency call solution into a wristwatch. It functions much like a cellphone, enabling them to contact the emergency services directly in the event of an emergency. Solutions that completely automate the exchange of information go one step further. If the ECG device on board an ambulance relays its data automatically to the physician on duty at the hospital’s emergency department, the doctor can treat the patient faster. Other M2M solutions monitor and relay vital data such as body temperature, blood pressure or pulse rate to the healthcare professional during treatment. Many health insurers in the United States have already realized that M2M solutions make economic sense in the long term. That is why the market there is much more advanced than in Europe.
M2M solutions are also used in industries where, at first glance, you might be less likely to expect them. Deutsche Telekom partner Medria Technologies, for example, offers the HeatPhone and the VelPhone as monitoring solutions that assist cattle farmers with breeding their herds. These systems send a text to the farmer’s cellphone at the beginning of the short insemination window when a cow is on heat or when she is about to calve.
Entirely new business models can also be developed on the basis of M2M technology: car sharing, for example. Unlike hire cars, car sharing vehicles are distributed all over the operating area. That is why they are equipped with an M2M solution and a GPS module. Customers can locate and reserve a car that is available nearby via an online portal. The car sharing provider is thereby always able to see at a glance where the entire vehicle fleet is and can make flexible arrangements for servicing or repairs.
En route to the ‘Internet of things’
Further examples of M2M in use could be listed for some time, and these M2M solutions are as varied as the needs of users and industries. This variety is one of the greatest challenges for the market. If M2M is to be more than mere hype, various preconditions must be fulfilled. Essentially, however, it is a matter of bringing together the various parties involved – the industry experts, specialized software companies, hardware providers, system integrators and mobile network operators.
Mobile network operators have embarked on first steps toward cooperation with the Global M2M Association (GMA) and the M2M Alliance. The GMA, for example, was launched by Deutsche Telekom, France Télécom and TeliaSonera to improve the quality of service and standards in M2M communication. That could be by means of network interoperability, harmonization of software interfaces, joint certification of modules, and service level agreements. The more MNOs follow suit, the likelier it is that mobile network operators around the world will be able to provide a swift and reliable network for M2M solutions.
Smaller solution providers face the challenge of marketing their products in a global market that as yet has barely been opened up – and doing so without suitable sales structures. E-commerce platforms could be a solution to this problem if they are independent of manufacturers and global in design.
M2M solution developers also need ease of access to APIs, programming guidelines, software development kits and testing facilities.
These endeavors all show that market players around the world will need to adopt new approaches if they are to open up and benefit from the anticipated M2M market growth. If they do, the “Internet of things” will soon be just as much a matter of course as the mobile Internet is today.
Jürgen Hase joined Deutsche Telekom AG in 2011 to head the M2M Competence Center and is responsible for the international M2M business. Hase has worked more than 20 years in the telecommunications industry and in the M2M sector. He is also chairman of the M2M alliance.
