Most M2M forecasts “not grounded in reality”: Compass Intelligence

Most forecasts about the growth of M2M services are “not grounded in reality”, according to Compass Intelligence, which has just published its own prediction that the number of cellular M2M connections in the US will grow from 33.3 million this year to 114.7 million by 2016.

The market-research company dismisses the work carried out by many of its rivals, arguing that most analyst firms make flawed assumptions.

Most forecasts about the growth of M2M services are “not grounded in reality”, according to Compass Intelligence, which has just published its own prediction that the number of cellular M2M connections in the US will grow from 33.3 million this year to 114.7 million by 2016.

The market-research company dismisses the work carried out by many of its rivals, arguing that most analyst firms make flawed assumptions.

“The majority of firms do not take availability of components, migration paths from 2G to 3G to 4G LTE, end-user behavior, socio-economic factors, and so on into consideration when building forecasts,” said James Brehm, a senior strategist at Compass Intelligence, in a statement.

The company says its own forecasting is far more accurate because it relies heavily on the aggregation of demand- and supply-side information collected through in-depth interviews with vendors, service providers and end users.

Brehm insists that his role as co-chair of M2M Evolution, a trade show, gives him access to members of the M2M Ecosystem that rivals do not enjoy.

“Leading up to the recent M2M Evolution conference in Austin [Texas, USA], I was able to spend countless hours with nearly a hundred of the top participants in the marketplace,” he said.

Compass makes a point of validating its predictions with key vendors and service providers.

“Compass Intelligence was excited to launch its M2M practice last year because of the hype surrounding M2M and conflicting numbers being floated in the industry,” said Brehm.

Among the market-research company’s findings is that more than 40% of M2M connections in the US will be running on 3G, 3.5G and 4G networks by 2015.

Compass expects to see rapid industry consolidation over the next two or three years.

It also claims that transportation vertical is currently the largest B2B vertical market, with a market share of more than 40%, and that cloud computing and cookie cutter-hosted applications will drive M2M adoption in future because they can demonstrate a return on investment.