On Monday, a day before the CTIA Enterprise and Applications show was set to get underway in San Diego, California, the GSM Association, including top executives from AT&T (Dallas, Texas, U.S.A.), Telenor Connexion (Stockholm, Sweden) and Qualcomm (San Diego, Calif., U.S.A.) came together to speak about the major revenue opportunities that exist with mobile connected devices.
In a briefing, GSMA revealed new research findings by Machina Research that outlined these market and revenue opportunities, and projected that the number of connected devices will increase from 9 billion in 2011 to 24.5 billion in 2020. In the mobile space, the number of connected devices was estimated to increase from 6.5 billion in 2011 to 12 billion in 2020. Revenue for connected devices was projected to be $1.8 trillion in 2020, with $1.2 trillion being from mobile connected devices.
This new research seemed to indicate that in the M2M industry, connected devices through wireless and cellular connections will be an enormous revenue stream. Although, according to Michael O’Hara, chief marketing officer for the GSMA, this will require that “all participants in this new expanded ecosystem join together.”
Not only is it essential for these participants to unite, but according to Glenn Lurie, president of Emerging Devices at AT&T, the only way to be successful is to look at the M2M industry differently, specifically with consumer products.
“We need to make it simple, not intimidating” says Lurie. “If we don’t we are going to fail.”
Lurie used the Amazon Kindle, an e-book reader, as an example of a simple consumer connected device. According to Lurie, most customers don’t know that the Amazon Kindle is a connected device, they just know that it works.
For the consumer to understand the benefit of what the product brings is the key factor in future cellular connected vehicles according to Lurie. “The biggest obstacle is education,” he says.
Education and simplicity were stressed by almost all the executives, including Fredric Liljeström, senior vice president of sales at Telenor Connexion. According to Liljeström, consumers are not interested in buying large, complicated M2M product as much as they are in buying the connectivity for it.
“Consumers don’t want to buy telematics, they are interested in buying connectivity,” says Liljeström. “They can use their mobile to get connected to a vehicle.”
The automotive industry is one of many vertical markets that are predicted to benefit from cellular connected devices. According to the report, the automotive industry is estimated to generate direct revenues of $202 billion; the consumer electronics industry, $445 billion; and the health sector could see growth of $69 billion.
These vertical sectors, as well as others, are projected to see massive growth in the future; but it isn’t just the common vertical markets that are going to be connected via cellular services, according to Lurie.
“Anything with a current running through it is going to be connected, because it needs to be smarter.”