LOS ANGELES–The M2M module market is growing as enterprises grasp the technology’s promise of efficiency in gathering data from many points and wirelessly transmitting it to a single cellular connection for those who need it. Applications range from fleet management to telematics, from home security systems to point-of-sale devices.
In this burgeoning space, the two biggest players–Wavecom SA and Siemens Wireless Modules–together control about two-thirds of the global market. Siemens addresses GSM-based markets and offers partners to meet CDMA-based demands. Wavecom addresses both GSM and CDMA markets and owns the intellectual property for the software that drives its GSM-based microprocessors, a major competitive advantage, a Wavecom executive said.
Each company controls about 35 percent of the market–up-to-date data is scarce–with the remaining 30 percent split among single-digit market share holders led by Motorola Inc. Other players include Kyocera Wireless Corp., Aeris.net, Motient Communications, Telit Wireless Solutions and Kore Wireless, among others. Eighteen companies exhibited at the “M2M Zone” at the CTIA Wireless I.T. & Entertainment show last week.
M2M technology has existed since World War II, but the evolution of cellular and mesh networks, scanning devices and RFID tags has stimulated demand.
Market analysis from ABI Research suggests that perhaps 15 million M2M module units shipped last year, and that’s expected to grow five-fold to 75 million units by the end of the decade. Hard data on the value of that market in dollars is hard to find. M2M modules that work with short-range wireless technologies such as Wi-Fi or Zigbee are expected to sell most briskly. That segment includes telematics, automation and control, metering and security systems.
Siemens AG’s recent merger of its infrastructure division in a joint venture with Nokia Corp.’s network division wisely left its own M2M module group in-house due to the growth potential, according to Shawn Sanderson, director of the company’s M2M business, based in the Seattle, Wash., area.
“The business is going to an end-to-end technology and services offering,” Sanderson said. “We don’t just sell widgets. We offer end-to-end service. That’s the focus of M2M–make it simple for the end user to understand and to use.”
Siemens sees growth potential in both module sales and service offerings. “It’s all about corporate efficiencies in the supply chain to drive revenue,” Sanderson said. “More machines, fewer people.”
Specifically, Siemens is going after home-security systems, point-of-sale devices and electric meter reading to assist in grid management.
At Wavecom, which absorbed Sony Ericsson’s M2M division earlier this year to reach market parity with Siemens, a period of integration is “psychologically over” with a move to new headquarters in Research Triangle Park, N. C., said Chief Operating Officer Anders Franzen.
Franzen said that Wavecom’s balanced offering of both GSM- and CDMA-based M2M modules and its IPR gave it a substantial competitive edge. If a carrier upgrades its network, Wavecom can update its chips more efficiently than the competition, Franzen said.
According to Franzen, Wavecom leads in Asia and Europe for metering and telematics applications, respectively, while he acknowledged that Siemens probably had the edge in security-related markets worldwide.
In the United States, Franzen sees incremental, steady growth for home security, metering and fleet management applications and considers his company the leader in U.S., CDMA-based fleet management markets. He prefers steady growth.
“The risk of high growth is that if you invest in that expectation and it doesn’t perform, you’re toast,” Franzen said.
