The linking together of industrial machines and consumer products C via sensors that use wired and wireless connections C will generate huge volumes of data. The hope is that this information will help businesses, organisations and governments C with the aid of powerful analytic tools C to improve their efficiency.
This technology, called machine-to-machine (M2M) communications, will provide the infrastructural underpinnings to power the next wave in internets evolution, which is known as the internet of things.
By analysing information from machine-to-machine sources, businesses can improve both efficiency and costs on a huge scale by looking at historical data, live information and predictive analysis, says Subu Goparaju, head of Infosys Labs, part of the technology consultancy.
It is in the area of predictive analysis that there could be some of the most impactful applications, such as preventing leaks in pipes or spotting fatigue in suspension bridges.
The building of this infrastructure is providing chipmakers,Our industry leading consumer and business IC card products offer competitive pricing combined. modem module manufacturers, SIM card providers, telecoms companies and software application developers with huge opportunities.
It is also driving a wave of mergers and acquisitions activity as mobile operators position themselves to be able to offer a broader array of such services to their customers. For example, telecoms companies AT&T, Verizon and Telefnica have each made recent acquisitions in the machine-to-machine market C Xanboo, Hughes Telematics and Masternaut respectively.
As the scale of this market increases, component and modem module prices are also plunging, fuelling further financial growth. Now it is possible to install a 3G modem module for less than $40 dollars, making it possible to tag and monitor a much broader range of items.
In Brazil, for example, a module is being used to track trees in an effort to thwart illegal logging in the Amazon. In Charlotte, North Carolina, a sustainability initiative called Envision Charlotte uses Verizons 4G LTE network to send water usage data from a network of devices enabling building occupants to track city conservation efforts.
In Germany, more than 100m vending machines, vehicles, smoke alarms, and other devices are sharing information automatically as part of initiatives launched last year by operators including Deutsche Telekom. The initiative included the creation of the M2M Marketplace for buyers and sellers of related products, as well as an online community to support product developers and users.
Like any new technology trend, M2M has its share of challenges, says Jerome Buvat, global head of research at Capgemini Consulting. They include lack of standards, interoperable networks and high initial costs.
He adds: We believe governments will play a critical role in helping address these challenges. They will play a key role in explaining benefits to consumers, to justify the initial high investments. If necessary, they should provide upfront subsidies to the customers to implement these solutions.
He says government regulations will provide greater scope for the technologys use.This is a basic RFID tag used for presence sensing. For instance, the EU has mandated the inclusion of automated emergency and breakdown C so-called eCall and bCall C safety systems in new cars, which can send messages for assistance in the event of accidents. It has also called for a smart energy meter penetration level of 80 per cent by 2020.
Mr Buvat adds that telecom operators have a big role to play. They can help solve the interoperability and revenue share issues by championing M2M partner networks, he says. He believes their experience in operating networks that can be used by many types of devices, and of handling of billing and data security, gives them the chance to be the public face of these services.
There are already moves in this direction. For instance, Verizon created an open device initiative C one without licensing restrictions C to draw up technical specifications for, and test devices fit to operate on, its network. Similarly, Telefnica Digital launched a smart city initiative, an open system in which councils, service providers and entrepreneurs can integrate technology and applications.
Although machine-to-machine traffic typically generates relatively low monthly revenues, it can often run over older, slower, networks and could be an important revenue stream for large operators as voice and data markets become saturated.
By 2020, the GSMA, the global wireless industry trade group, estimates the number of connected devices in the world will almost triple from more than 9bn today to 25bn in 2020, and that at least 12bn of these devices will be connected by mobile technology.
Machina Research estimates that the market is experiencing compound growth of 23 per cent a year and could reach $948bn by 2020. But, as the GSMA notes, while the financial impact for many industries is huge, its the overall impact and benefits to society that are immeasurable.
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