Short-term European M2M market looks strong, analyst contends

The near-term market for machine-to-machine communication technologies is strong, particularly in Europe, according to Frost & Sullivan telecom analyst Yiru Zhong. That opinion is contrary to short-term skepticism from Gartner reported last month.

Zhong recently completed a survey of the M2M market and is scheduled to present his findings publicly next week.

Zhong concludes that the M2M market is particularly strong in Europe, where the number of connected devices grew 60% over the past year. That market remains dominated by traditional M2M services like energy, logistics, healthcare and transportation, but is poised to expand to value-added services throughout consumer markets as well. Zhong argued this fall that the acquisition by Ericsson of Telenor Connexion’s M2M Technology Platform would bolster the entire value-added M2M economy and was one of a number of acquisitions on the horizon.

This perspective is more optimistic than the one recently voiced by Gartner’s Eric Goodness. Goodness argued that while the M2M market will someday be massive, it will likely fall short of its promise in 2012.  

“In my inquiries I hear users’ frustration with how their provider’s enable inflated expectations in the pre-sales phase only to back off claims when confronted with the user’s real world requirement to establish a [return on investment] expectation in a contract,” Goodness wrote. “The gap is sometimes massive … and off-putting.”  

In our coverage of Goodness’s comments, we asked whether government policies in places like China could push M2M development forward fast, despite the cautious reception that individual business customers of those technologies might offer when evaluating them in isolation elsewhere. Such acceleration of development due to state support would be similar to the way that China has fast become a world leader in mobile phone connectivity.

The M2M industry outlook appears to look different in Europe as well. There, major vendors collaborate on testing of device communication systems; government agencies collaborate on extensive technical standards; and upstart innovators push for utilization of entirely new sources of spectrum for M2M purposes.

Perhaps it’s only in the United States that M2M feels like the distant future.