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Is M2M at its tipping point?

Posted by Norman Miglietta on 04/16/2013

Machine-to-machine communications is said to have reached its tipping point, the fine line where awareness, supplier activity and demand – combined with unit economics costs making M2M affordable for mass adoption – suddenly meet to create a burgeoning market for new services.

I came across an article at Enterprise IT News last week that puts good context around much of what we’ve been saying about M2M market growth. Namely, that growth will come largely in very specific, vertical segments.

The piece took note that M2M had a definite buzz around it at Mobile World Congress this year, much more noticeably than in the past. But what really caught our attention was the solid, visible path to M2M that a number of KORE business partners are forging, including ILS Technology.

“The first [step] is wireless and connectivity ubiquity, so the affordability and availability is there,” said ILS CEO Fred Yentz. Our ears perked at this of course since we’ve worked to build M2M connectivity and device management right into the ILS platform.

Yentz goes on to observe that sheer awareness about what M2M can do is a key driving force for growth – “from the business leaders and the C-suites trying to make their business run better, to the vendors” trying to develop new money-making services around M2M.

The author was sure to balance these bullish observations by pointing out the complexities of global M2M device connectivity, an issue that has been near and dear to us for several years now. He quotes Ovum Analyst Pauline Trotter on the lack of a truly global network mobile operator and, in so doing, highlights one of the modus operandi of KORE GlobalConnectTM ; plumb once and gain pole-to-pole connectivity with native in-country connections.

And finally, the article validates much of what we’ve been saying about M2M all along:

  • Some of the numbers thrown around about M2M device growth have probably been “overly ambitious.”
  • Mobile trumps fixed – fixed, wireline M2M connectivity is being dwarfed by the propagation of mobile sensors connected via cellular or satellite services.
  • There is stronger takeup in Asia Pacific, including Australia, Japan, New Zealand and South Korea. KORE has been an aggressive player in these markets for years.
  • Machine devices are not huge generators of sustained data traffic.
  • While M2M device ARPU is considerably less than consumer devices to be sure, it actually presents a great business case because the acquisition and support costs are so much lower.

Is M2M at a tipping point? It is certainly at a point where more business leaders are recognizing its value. Our job remains to continue focusing on empowering those value-adding, life-improving applications that show demonstrable ROI for the application provider.

By Stein Soelberg, Director of Marketing

Follow Stein on Twitter: @sesoelberg

Stein leads a team whose responsibility is to own the branding, advertising, customer engagement, loyalty, partnership and public relations initiatives designed to propel KORE into the 21st century. With over 15 years of technology marketing experience in the business to business software, Internet services and telecommunications industries, Stein brings a proven track record of launching successful MVNOs and building those brands into leaders.

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