According to a new report my Machina Research, machine-to-machine (M2M) communication in Smart Cities & Public Transport represents a sizeable opportunity for market players, and predicts the market will grow from 59 million connections in 2011 to 512 million in 2020.
“This is a diverse sector with a wide range of different public services, all of which can substantially benefit from M2M, in particular through driving efficiency savings,” says Michele Mackenzie, the author of the report. “In most cases, each service has been conceived and developed often over a number of years as an independent silo, with little integration, interdependence or communication built in between services. The challenge with retrofitting existing cities will be to link up some of those independent silos where appropriate.”
According to Mackenzie, facilitating communication between traffic management systems and public transport vehicles is a good example but there is scope for wider horizontal platforms, accommodating a number of connected services. “M2M is instrumental in enabling this communication,” says Mackenzie.
While Traffic Management generates the lion’s share of connections, reaching 446 million by 2020, it is the Environment and Public Safety group of applications, driven largely by CCTV deployment, which generates the most revenue, says the research firm.
Machina Research (London) predicts that this will be a $9.4 billion opportunity globally by 2020. However, whilst Environment and Public Safety represent the largest market in terms of revenue, it is a relatively mature market and revenue growth is slow at 7%. Overall revenue from Traffic Management is smaller at $7 billion in 2020, but this application group experiences higher growth over the forecast period with a CAGR of 22%.
Emerging Asia Pacific is the region which drives the most revenue, accounting for 59% in 2011 and remaining as high as 44% in 2020, says Machina Research. This is largely due to China’s nationwide deployment of CCTV and its continued growth in this area over the forecast period. Europe will also constitute a large share of the revenue, comprising around 24% in 2020.
“Smart City projects are by nature large and complex and there are no ‘one size fits all’ solutions,” says Mackenzie. “They require the expertise of a number of industry players hence there are substantial opportunities for vendors, systems integrators and fixed and mobile network operators in this market and more importantly partnerships between players.”