Wireless M2M: Seizing the Pervasive Internet Opportunity (Cont'd)

Harbor Research firmly believes that the Pervasive Internet represents a tremendous business opportunity for suppliers, adopters, and service providers. The market size of the Pervasive Internet today is large. Our analysis indicates that by the end of 2005, 120 million devices (excluding PCs, phones, PDAs, any device under $50 in value, and some other consumer information appliances) will have the potential to be Internet-connected, more than half through wireless connections. This is a small fraction of the entire relevant device population, but the number promises to grow rapidly throughout the decade. By the end of 2008, nearly 600 million devices worldwide will have the potential to be networked of which nearly 70% could be networked wirelessly, with a combined revenue potential (enablement, monitoring, data analysis and services) of over $100 billion. Over 65% of this total will be related to new services, indicating the huge new revenue potential from services alone.

What’s So Special About Wireless?
The use of cellular and other wireless networks for telemetry solutions is not new. Examples of applications using these technologies go back to the early 1990s using cellular dial-up and SMS (Short Message Service) as well as proprietary networks.
Wireless telemetry, though, has traditionally been a specialized field of proprietary solutions using proprietary “standards.” As a result, the cost of developing, implementing and operating solutions has effectively excluded many possible application areas. They were priced out and very difficult to connect to standard enterprise networks.

The following have now changed all this:
• Lower connection costs, which are typically reducing at the rate of 10-15% per annum?
• Increasingly standardized interfaces?
• The introduction of ‘always on’ connectivity utilizing open standards such as CMA2000 and GPRS for cellular, IEEE 802.11 standards for Wireless LAN, IEEE 802.15 for Wireless PAN and RFID standards with more to follow.
• The opportunity to utilize Internet technologies to centralize and standardize applications.

.These changes are serving to ‘break the mold’ of traditional telemetry business and significantly widen the potential base of applications that can be supported at reasonable cost.

Mobile Operators Begin to See Advantages
The situation for mobile networks illustrates some of these points well. In the face of initial difficulties in the market perception of WAP (Wireless Application Protocol), GPRS and 3G, mobile operators have struggled to introduce new data services that mobile subscribers are prepared to pay for. This also comes at a time when mobile phone subscriber growth is slowing, as many developed countries reach saturation point for new mobile connections. As a result, mobile operators have begun to see the attractions of another population that can be connected – that of machines.

In this regards, while M2M applications typically (although not always) use only small amounts of air time, they hold some particular attractions for these market players. For example, customers are usually companies, so each sale is usually for many simultaneous connections, rather than for example the individual sales of the mobile phone business. This means cost of sale per unit is low. Further, churn rates

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