Feb 14, 2013

M2M Platform Permutations

Ericsson’s 5 February announcement to supply its M2M Device Connection Platform (DCP) in support of XL Axiata in Indonesia has prompted this update to an earlier article on the competitive dynamics of international alliances and M2M platforms.

The DCP deal is something of a coup, providing Ericsson with a meaningful customer reference in the highest population country in South East Asia. The news announcement actually formalizes a business relationship that dates back to early 2012. In October 2012, both companies highlighted an achievement of 89,000 M2M connections. The pace of growth seems to have accelerated with XL Axiata’s M2M base reaching a total of 125,000 in the intervening months. The latest announcement provides some timely marketing collateral for Ericsson to use with mobile operators that cannot justify an investment in their own M2M platforms and the delegations of mobile-operator executives who will shortly be congregating at Mobile World Congress.

The move by XL Axiata is not unique in the market. Other mobile operators have partnered for M2M platform capabilities to handle large scale application opportunities using processes that are geared specifically to M2M operational needs and economics. AT&T was an early partner of Jasper Wireless, for example, while Everything Everywhere in the UK has been working with another platform provider, Transatel.

These developments and the changing competitive dynamics for M2M platforms will have far-reaching implications for all device vendors, service providers and users in the M2M eco-system.

Jan 31, 2013

Sierra Wireless reinforces its M2M strategy


I have been tracking corporate developments in the M2M market over the past few years. They are useful for performance benchmarking while also providing insights as to how companies are implementing strategy and committing to this market.

To date, every initiative has been expansionary involving a mix of acquisitions, distribution agreements, innovation and partnering. The divestiture by Sierra Wireless of its AirCard business, announced on 28 Jan 2013, therefore triggered something of a database classification challenge. In essence, the company sees a tremendous growth opportunity in the M2M market while also acknowledging that the data-card business is on the decline, especially as increasing numbers of Internet enabled devices already include ‘embedded mobile’. Sierra Wireless has therefore chosen to exit this business and to direct its investment capacity towards more promising M2M opportunities.

Jan 22, 2013

Building a "billion dollar" M2M business

Over the past 1-2 years, the concept of a “billion dollar” business has often arisen in my project related discussions concerning multi-national operators. Indeed, Matthew Key (Head of Telefónica Digital) recently set a target of Eur.0.5-08bn (almost US$1 billion) for its M2M revenues by 2015. A billion matters in the frame of reference for most large operators because anything smaller often does not warrant management attention. This is understandably the case when resources are being requested of Group-level decision makers who have to weigh competing market opportunities.

So, what does a billion dollar business look like? How might an MNO reach this level of revenues within a 3-5 year interval of time? And, what are some of the business model implications for operators pursuing a “billion dollar” goal? 

Jan 8, 2013

M2M Corporate Initiatives 2012

Please check the Corporate Initiatives navigation tab for the most recent market developments  
 
2012 proved to be another strong year for the M2M/Connected Devices market with a significant rise in corporate business ventures. The nearly 100% increase in activity during 2012 – a total of 114 corporate events – easily surpasses the rate of market development in 2011 according to our database tracking M2M corporate ventures.

The two strategies showing the greatest amount of activity during 2012 were:
  • The creation of commercial partnerships across the M2M value chain to supply integrated M2M offerings to the market

  • Market entry and expansion initiatives by companies targeting new and different M2M segments.

Nov 26, 2012

Finance as a Telco M2M offering

The role of telecommunications service providers in the M2M market is typically associated with the provision of wide-area data connectivity. This narrow perspective ignores the other capabilities - technical and non-technical - that service providers can bring to bear in new application scenarios.

In November 2012, Telefónica announced a cooperation agreement with Generali Seguros in Spain to pilot a new, automobile insurance service. The service will allow users to pay for their car insurance policy based on how they drive. The service will also provide information about how users can drive responsibly and tips to improve their driving habits. The overall service concept is not new; it has parallels with an offering such as 'In Drive' which is available in the USA from State Farm Insurance and Verizon's recently acquired subsidiary, Hughes Telematics.

However, what is interesting in the Spanish case is the three-party business model that Telefónica has put in place to capture a share of the wider commercial potential of this new service.

Connected-device business models in the US Market


(published in RCR Wireless - 26 Nov 2012)

A previous article in RCR Wireless magazine highlighted the topic of new M2M business models with reference to the size and characteristics of this fast growing market opportunity. It also highlighted the central role that communications service providers (CSPs) occupy in the eco-system. Beyond traditional data plans, however, what are the new business models that will allow the full market potential to be attained?

Nov 13, 2012

Vodafone and its M2M strategy

In Vodafone's H2-2012 financial results presentation, its CEO outlined Vodafone's 2015 strategy including a reference to its M2M goals. In particular, Vodafone's M2M business unit will be a part of its Group-wide Enterprise unit. This raises important questions about Vodafone's longer term goals especially in the light of a growing consumer M2M market and the reorganisation plans of several of its competitors.