The market for Internet of Things (IoT) and machine-to-machine (M2M) solutions is set to mature markedly this year, as some of the key questions facing operators around technology, use cases and opportunities will be resolved.
This is according to research company Analysys Mason, which believes that M2M in 2016 will be dominated by the connected car, with the number of connected vehicles accelerating to over 150-million and the largest operators reaping the benefits.
The company adds that the connected car opportunity is the most attractive M2M opportunity for telecoms operators because of its massive scale (forecasting over 800-million connected vehicles by 2023) and the potentially high average revenue per connection (ARPC). Operators with worldwide reach will enjoy the largest rewards, thanks to the embedded connectivity deals that they already have with car companies. Smaller carriers are expected to struggle to gain traction in the automotive space.
Analysys Mason also predicts that there will be tighter integration of the various pillars of IoT.
It expects to see more attempts to use IoT to create unified user experiences, for example linking connected car service to the smart home. Progress was made in this direction during 2015.
In addition, the company expects to see greater emphasis on other capabilities beyond basic data connectivity being added to IoT devices, such as voice and video. This could include a health monitoring device that also allows users to make a voice or video call in an emergency. WebRTC may be a component.
Telcos will have to change their strategies to maximse the IoT and M2M markets, and Analysys Mason expects their approach to M2M and the broader IoT opportunity to mature in 2016, potentially resulting in the reorganisation of M2M units.
The researcher believes operators will focus on three approaches: using M2M to generate new connectivity revenue; using IoT to protect existing revenue; and providing platforms for vertical markets, especially where connectivity revenue alone appears to be low.