The machine-to-machine (M2M) wireless communications technology has become a major driving force for carriers’ mobile data revenue. M2M is a rapidly growing market opportunity. According to various industry sources, M2M connections may cross 200 million globally by 2014 with a total market valuation of approximately $20 billion.
A typical mobile M2M messaging system establishes a wireless communications link to connect a group of devices to a computer server or another device for the purpose of transmitting data contained within those devices. This emerging M2M market provides the opportunity for mobile-enabled devices ( such as cars, utility meters, vending machines and consumer electronics devices) to get connected to a wireless network.
Recently, large wireless operators in the U.S. witnessed a significant boost in M2M connections. At the end of the first quarter 2010, Verizon Wireless (VZ: 28.69 -0.27 -0.93%) enabled 7.3 million M2M connections, while AT&T (T: 24.78 -0.27 -1.08%) enabled 5.78 million M2M connections. Last September, T-Mobile, the mobile communications division of Deutsche Telekom AG (DT: 0.00 N/A N/A) andSierra Wireless (SWIR: 7.0519 -0.0281 -0.40%), signed an agreement to form a joint venture for M2M connections.
Emerging next-generation (4G) technologies are also escalating the growth of the M2M segment due to their superfast speed. Massive throughput and the low-latency period of WiMAX and LTE technologies enable easy access to large-scale applications, such as fleet management, security, automotive, navigation and video content. Sprint Nextel Corp. (S: 4.3301 -0.0499 -1.14%) is another beneficiary of WiMAX M2M communications. In 2010, around 40,000 WiMAX M2M modules are expected to be shipped.
Mobile M2M connections, which enable wireless data calls between machines, are the new services and business models that have recently received significant market traction. Deploying innovative connectivity platforms to deliver seamless, fully integrated M2M communication with global connectivity has become an important factor for mobile service providers’ success in this market.