Machina Research, the world’s leading provider of strategic market intelligence on M2M and the Internet of Things published its annual guidance on the size of the M2M market opportunity
The key findings are as follows:
- The total number of M2M connections will grow from 5 billion in 2014 to 27 billion in 2024, a CAGR of 18%.
- Today 72% of all M2M connections are connected using a short range technology (e.g. WiFi, Zigbee, or in-building PLC), by 2024 that will have declined to 69%. The big short-range applications, which cause it to be the dominant technology category, are Consumer Electronics, Building Security and Building Automation.
- Cellular connections will grow from 256 million at the end of 2014 to 2.2 billion by 2024, of which the majority will be LTE. Just over 50% of those cellular connections will be in the ‘Connected Car’ sector, including both factory-fit embedded connections and aftermarket devices.
- 14% of connections in 2024 will use Low Power Wide Area (LPWA) connections such as Sigfox, LoRa and Huawei’s Cellular IoT.
- China and the US will be neck-and-neck for dominance of the global market by 2024. China which will account for 21% of global M2M connections, ahead of the US on 20%. However, the US wins in terms of cellular connections (20% vs 15%) and M2M revenue (23% vs 19%). Third largest market is Japan with 8% of all connections, 6% of cellular and 7% of global revenue.
- The total M2M revenue opportunity will be USD1.6 trillion in 2024, up from USD500 billion in 2014, a CAGR of 12%. This includes devices, connectivity and application revenue. The majority of the revenue comes from devices.
- M2M today accounts for 2% of cellular data traffic. By 2024 this will have increased to 4%. Although this figure indicates a modest impact on networks, M2M devices are highly diverse and their demands on network capabilities will go beyond simply the volume of traffic, for instance with increasing signaling, or greater requirements for low latency.
Commenting on the market growth forecasts, Founder and CEO Matt Hatton said: “As ever, the expectations for growth in the M2M market are high. Over the last year we have had to adjust a few of our assumptions, mostly with regard to changing regulation such as with eCall or smart meter roll outs. The upshot is that some market growth will be delayed by a few years, which has had a knock-on effect on our forecasts. However, the overall picture is very positive, with strong growth anticipated over the next 10 years. In particular we would highlight the growing deployment of LPWA networks as a further cause for optimism in the growth of the market”.