The global wireless M2M market remained strong in 2012, displaying growth in all major world regions and vertical segments. Berg Insight estimates that shipments of cellular M2M devices increased by 15.2 percent to a new record level of 54.9 million units. Adjusted for churn, this resulted in net additions of 27.5 million M2M connections in 2012, taking the worldwide number of cellular M2M subscribers to an estimated 134.9 million. Until 2018, Berg Insight forecasts that shipments of cellular M2M devices are forecasted to grow at a compound annual growth rate (CAGR) of 24.0 percent to reach 185.0 million units. Due to the wide adoption of wireless M2M technology across many industries, a substantial share of M2M device shipments is now generated from replacement sales. Furthermore there will be a growing number of dormant devices in segments such as automotive and consumer electronics that never become activated. As a result the net increase of M2M subscribers will be substantially lower than M2M device shipments. Berg Insight forecasts that the number of cellular M2M connections will grow at a compound annual growth rate (CAGR) of 24.4 percent between 2013 and 2018 to reach 489.9 million at the end of the period.
East Asia, Western Europe and North America were relatively close in size and accounted for nearly 75 percent of the global cellular M2M subscriber base at the end of 2012. Until 2018, the relative share of the regions is expected to decrease slightly as adoption takes off in other parts of the world. East Asia became the largest regional market with 37.8 million cellular M2M subscribers at the end of 2012 after recording a year-on-year growth rate of 34 percent. Western Europe came second with 32.6 million M2M subscribers and 28 percent year-onyear growth. North America fell to the third place with 31.0 million cellular M2M subscribers, as the year-on-year growth rate slowed down to 11 percent. Among individual countries, China and the US were tied in the first place with around 28.4 million M2M subscribers each. The combined size of the EU market was even larger with approximately 35 million M2M subscribers.
The market conditions for wireless M2M technology industry players have improved in the past year. Global economic recovery and continued progress along the technology adoption curve in almost every part of the world have underpinned the long-term volume growth trend. The shift in the North American market towards 3G and eventually 4G platforms have stabilised hardware ASPs, which could even increase in the coming years as Europe starts to follow. Consolidation among module vendors has created three global players - Sierra Wireless, Gemalto M2M and Telit - that have improved their financial performance. There are however still challengers in the market and in Mainland China the competitive situation is extremely fierce. On the software side, the main rift is between in-house and off-the-shelf solutions. There are currently two global providers of M2M connectivity platforms for mobile operators - Ericsson and Jasper Wireless - who compete as much against proprietary operator platforms as each other. In the application enablement platform space, the competition from in-house solutions is even stronger and no player has yet managed to attain any clear market leadership. The next category of players that will become increasingly involved in the M2M industry will come from the data analytics space, as new technology enables increasingly sophisticated analysis of data from M2M devices. Berg Insight expects to see a series of announcements of new partnerships between mobile operators and leading players in the big data space in the coming year.
The connected car and the connected enterprise are the two main trends currently shaping the development of the global wireless M2M market. GM is taking the next step in connected cars by introducing LTE connectivity as a standard feature across its model range in the US during 2014. At the same time adoption in Europe is boosted by the imminent implementation of the eCall mandate. The global automotive industry is no longer planning, but executing strategies to make always-on connectivity an integral part of the driving experience. These developments are a part of an even larger trend around the connected enterprise. The world's best managed corporations are in the process of mastering how connectivity can help improving the efficiency of their daily operations to increase revenues and reduce costs. The transformation occurs in organisations of all sizes in all sectors and ensures a high steady growth for the M2M industry.
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