Rising take-up in the automotive, consumer electronics and utilities sectors will drive a 13% annual increase in global M2M revenues, to €40 billion ($54.5 billion), between now and 2017, according to new research from IDATE.
The market-research company also expects to see the number of M2M modules in use grow by 30% over the same period, rising from 175 million in 2013 to 470 million in 2017.
Europe is expected to be the largest market in terms of revenues, although the Asia-Pacific will dominate when it comes to volumes.
Indeed, China has already overtaken the US to become the world’s biggest market in terms of installed cellular M2M modules.
Although IDATE believes the automotive, consumer electronics and utilities verticals will drive growth, it notes that certain barriers could obstruct their growth.
For one thing, several long-awaited applications in key markets have been repeatedly delayed, including Europe’s eCall regulation and large-scale rollouts by utilities.
IDATE also says that technical choices can have a tremendous impact on the market.
For instance, if smart meters were connected to the cellular network through a concentrator, large utilities would be able to further increase their negotiating power and drive down per-unit prices.
Despite low and declining average revenue per user, IDATE also believes the market offers a number of attractive opportunities to M2M application providers.
Projects typically have a long lifespan, low churn rates and average contracts representing several thousand SIM cards, while connectivity revenues alone are expected to amount to some €10 billion worldwide in 2017 and more than 3% of European operators’ mobile data revenues.
Meanwhile, mobile virtual network operators are being squeezed out of the market and forced to reposition themselves as platform providers, while module makers must adapt to a market where unit prices are in “free fall”.
IDATE says the biggest operators will continue to explore new cloud and big data services allowing them to find “solid and sustainable new business opportunities”.