M2M device connections and revenue: worldwide forecast

Transcription

1 Research Forecast Report M2M device connections and revenue: worldwide forecast August 2013 Morgan Mullooly and Steve Hilton

2 2 Contents Slide no. 5. About this report 6. Executive summary 7. Executive summary: M2M connections worldwide will grow by a CAGR of 29% through Executive summary: growth in M2M connections will be strongest for the utilities sector, in emerging markets, and on mobile networks 9. Executive summary: worldwide M2M connectivity will generate USD88 billion in revenue by 2023, despite ARPC decline 10. Recommendations 11. Recommendations 12. M2M device connections 13. M2M device connections: worldwide [1] 14. M2M device connections: worldwide [2] 15. M2M device connections: developed versus emerging markets 16. M2M device connections: fixed versus mobile networks 17. M2M device connections: small and medium-sized enterprises 18. M2M device connections: North America 19. M2M device connections: Western Europe 20. M2M device connections: Central and Eastern Europe 21. M2M device connections: Developed Asia Pacific 22. M2M device connections: Emerging Asia Pacific 23. M2M device connections: Latin America 24. M2M device connections: Middle East and North Africa Slide no. 25. M2M device connections: Sub-Saharan Africa 26. M2M connectivity-related revenue 27. M2M connectivity-related revenue and ARPC 28. M2M connectivity-related revenue 29. M2M connectivity-related revenue: developed versus emerging markets 30. M2M connectivity-related revenue: Small and medium-sized enterprises 31. M2M connectivity-related ARPC 32. M2M connectivity-related ARPC: a sample of applications 33. M2M connectivity-related ARPC: developed markets 34. M2M connectivity-related ARPC: emerging markets 35. Market definition and comparison with previous ( ) forecast 36. Market definition [1] 37. Market definition [2] 38. Definition of geographical regions 39. M2M device connection forecast: percentage change 40. Modifications to our updated forecast: versus [1] 41. Modifications to our updated forecast: versus [2] 42. About the authors and Analysys Mason 43. About the authors 44. About Analysys Mason 45. Research from Analysys Mason 46. Consulting from Analysys Mason

3 3 List of figures Figure 1: Figure 2: Figure 3: Figure 4: Breakdown of data included in this report M2M device connections, worldwide, , comparison of 2012 and 2013 forecasts M2M device connections, developed markets share of connections and fixed networks share of connections, worldwide, M2M connectivity-related revenue and average revenue per connection (ARPC), worldwide, Figure 5: M2M device connections by sector, worldwide, Figure 6: M2M device connections by sector, worldwide, Figure 7: M2M device connections by market type, worldwide, Figure 8: M2M device connections by network type, worldwide, Figure 9: M2M device connections by size of enterprise, Figure 10: M2M device connections by size of enterprise, excluding utilities sector, Figure 11: M2M device connections by sector, North America, Figure 12: M2M device connections by sector, Western Europe, Figure 13: Figure 14: Figure 15: M2M device connections by sector, Central and Eastern Europe, M2M device connections by sector, Developed Asia Pacific, M2M device connections by sector, Emerging Asia Pacific, Figure 16: M2M device connections by sector, Latin America, Figure 17: M2M device connections by sector, the Middle East and North Africa, Figure 18: M2M device connections, Sub-Saharan Africa, Figure 19: Figure 20: Figure 21: Figure 22: Figure 23: Figure 24: Figure 25: Figure 26: Figure 27: M2M connectivity-related revenue by sector, and ARPC, worldwide, M2M connectivity-related revenue by sector (USD million), worldwide, M2M connectivity-related revenue, developed and emerging regions, M2M connectivity-related revenue by size of enterprise, worldwide, SME commercial fleet tracking M2M connectivity-related revenue and ARPC, worldwide, Examples of M2M connectivity-related ARPC rates, by network and market type, 2013 M2M connectivity-related ARPC rates, developed markets, M2M connectivity-related ARPC rates, emerging markets, Summary of industry sectors and M2M solutions included in our forecast

4 4 List of figures Figure 28: Figure 29: Figure 30: Regional breakdown used in this report Percentage change between 2012 and 2013 M2M device connection forecast, by sector (excluding financial), worldwide, Percentage change between 2012 and 2013 M2M device connection forecast, financial services sector, worldwide, Figure 31: M2M connections, 2012 and 2013 forecasts, worldwide, Figure 32a: Revisions to our M2M forecast, by industry sector Figure 32b: Revisions to our M2M forecast, by industry sector

5 5 About this report This report presents the annual update to our forecast for machine-to-machine (M2M) connections. It provides a detailed 10-year forecast, worldwide and for eight regions, of: M2M device connections M2M connectivity-related average revenue per connection (ARPC) M2M connectivity-related revenue. Forecast data covers eight industry sectors and 24 M2M solutions within those sectors. Figure 1 provides detailed information on how the forecasts are split. The report also provides analysis of key forecast data and trends in the M2M market, recommendations for operators and vendors, and a comparison with our previous forecast. Our forecast now includes a SME and large enterprise and public sector split for connections and revenue. This report is based on several sources: regulator reports, network operator reports, operator insights (primarily through discussions and data provided by operators in our M2M scorecard for communications service providers: 2012), and various ad-hoc sources for sector specific data points. See the Market definition section for more information about this report. Figure 1: Breakdown of data included in this report [Source: Analysys Mason, 2013] Forecast splits Industry sectors Market type (developed and emerging) Network type (fixed and mobile) Enterprise size (SMEs and large enterprises/public sector) Utilities Automotive and transport Retail Financial services Security Healthcare Government Regions Western Europe Central and Eastern Europe North America Latin America Developed Asia Pacific Emerging Asia Pacific Middle East and North Africa Sub-Saharan Africa

6 Connections (million) M2M device connections and revenue: worldwide forecast M2M device connections: Emerging Asia Pacific There are 30 million M2M device connections in the Emerging Asia Pacific region in This will increase to 519 million connections by 2023, growing at a CAGR of 33% over the 10-year period. Figure 15: M2M device connections by sector, Emerging Asia Pacific, [Source: Analysys Mason, 2013] 600 Utility sector solutions will account for 67% of overall M2M device connections by 2023, growing at a CAGR of 48%. In emerging markets, smart metering is partially driven by regulatory and government requirements. However, utility companies have a significant incentive to minimise fraud by using technology such as smart metering. There are also opportunities to create prepaid utility accounts to help utility companies maximise revenue Solutions for the security sector will account for 12% of overall M2M device connections by 2023, growing at a CAGR of 28%. The number of connections in the healthcare sector will grow strongly. Healthcare will only account for 3% of M2M device connections in 2023, but the sector will grow at a CAGR of 32% during the next 10 years Retail Financial services Industrial Government Healthcare Automotive and transport Security Utilities

7 Revenue (USD billion) ARPC (USD) Revenue (billion) M2M device connections and revenue: worldwide forecast M2M connectivity-related revenue: Small and medium-sized enterprises Large enterprise and public sector connections will continue to account for most revenue generated by M2M connectivity during the forecast period. SMEs account for 8% of overall worldwide M2M connectivity-related revenue in By 2023, they will account for 11% of worldwide connectivityrelated revenue. The CAGR for revenue over the 10-year period for developed markets is 28%. SMEs will generate USD10 billion in M2M connectivity related revenue in Figure 22: M2M connectivity-related revenue by size of enterprise, worldwide, [Source: Analysys Mason, 2013] Commercial fleet tracking will compromise 20% of SME M2M connectivity-related revenue in 2023 equivalent to approximately USD2 billion. This represents a CAGR of 22%. ARPC will decline during the forecast period as solutions become mainstream. These solutions can ensure that delivery completions are increased, customer service is improved, and fuel and labour costs are reduced. SMEs Large enterprises and public sector Figure 23: SME commercial fleet tracking M2M connectivity-related revenue and ARPC, worldwide, [Source: Analysys Mason, 2013] Analysys Mason categorises enterprise types as follows: micro = 0 9 employees; small = employees; medium = employees; large = 250+ employees. Revenue ARPC

8 43 About the authors Steve Hilton (Principal Analyst) is the lead analyst for Analysys Mason s Enterprise and SME Strategies research programmes. His primary areas of specialisation, which focus on large and small enterprises, include fixed and mobile communications services, M2M, cloud services, and sales channels. Steve has 18 years experience in technology and communications marketing. Prior to joining Analysys Mason, he managed the Enterprise and SMB team at Yankee Group. He has also held senior positions at Lucent Technologies, TDS and Cambridge Strategic Management Group (CSMG). Steve is a frequent speaker at industry and client fora, and publishes monthly articles in several respected trade journals for the enterprise and channel partner community. He holds a degree in economics from the University of Chicago and a Master s degree in marketing from Northwestern University s Kellogg School of Management. Morgan Mullooly (Analyst) contributes research for the Enterprise research programmes. His primary area of focus is on the M2M, or Internet of Things (IoT) sector. This includes analysis on a variety of topics including IoT enterprise requirements, forecasting, vendor profiles and SP scorecards. Previously, he led Analysys Mason s Spectrum research programme, focusing on spectrum valuation, LTE strategies and white space technologies. Morgan has a Master s degree in Philosophy and Public Policy from the London School of Economics.

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