What is the status for wireless M2M communication in the retail sector? POS terminals and on street parking solutions are two areas where the new technology is already widely adopted. The report also covers vending machines, ATMs, digital signage and ticketing machines. Berg Insight forecasts that the number of cellular M2M connections in the retail industry will grow at a CAGR of 13.9 percent from 23.1 million in 2014 to 44.3 million connections worldwide in 2019. Learn more about the business opportunities associated with the transformation of the retail industry in this new report in the M2M research series from Berg Insight.
The retail industry is an important vertical for cellular M2M connectivity with 23.1 million cellular connections today and a total market size of nearly 113 million POS terminals, ATMs, vending machines, parking meters, digital signs and fare collection devices worldwide. Berg Insight forecasts that the number of cellular M2M connections in the retail industry will grow at a compound annual growth rate (CAGR) of 13.9 percent to reach 44.3 million connections worldwide in 2019. Shipments of cellular M2M devices will at the same time increase at a CAGR of 7.1 percent from 9.4 million units in 2014 to 13.2 million units in 2019. Cellular M2M technology enables devices such as POS terminals and ATMs to be used at new locations where fixed line connectivity is unavailable or impractical. The technology has a more transformational effect on markets such as vending and parking, where machine operators need to reorganize their operations in order to benefit from the availability of real-time information.
The installed base of connected vending machines in North America reached 0.56 million units at the end of 2014, whereas the corresponding figure for EU28+2 was 0.15 million units. The market is still in an early stage as penetration rates for North America and Europe are at 9.3 percent and 3.9 percent respectively. However, vending is also one of the fastest growing segments for connectivity solutions in the retail industry, driven by demand for cashless payment and vending telemetry solutions. The North American market is projected to grow at a CAGR of 18.9 percent between 2014 and 2019, reaching 1.3 million connected vending machines at the end of the period. Similarly, the European market is forecasted to grow at a CAGR of 28.2 percent to reach 0.5 million connections by 2019.
The parking industry has been one of the earliest adopters of M2M communication technology and today approximately 60 percent of the world's 465,000 multi-space meters are connected, primarily to cellular networks. This penetration rate will continue to increase steadily throughout the foreseeable future, as nearly all new multi-space meter deployments have connectivity as a requirement. Connectivity has in contrast to this only recently become an optional feature in single-space meters and today only 6 percent of the single-space meters in the world are connected. However, connected single-space meters have recently had a breakthrough in the North American market, where mixed deployments that comprise both single-space and multi-space meters are becoming common. The share of single-space meters that incorporate connectivity is as a result now increasing rapidly and expected to reach 22 percent by 2019.
Cellular connectivity has become a very popular option for POS terminals and was incorporated in more than one third of the devices shipped in 2014. The wireless technology has an important role in facilitating the global adoption of electronic payments, as it enables the rollout of POS terminals to many new market segments as well as regions where the fixed line telecommunications infrastructure is less developed. Berg Insight forecasts that the installed base of cellular POS terminals will grow at a CAGR of 7.2 percent between 2014 and 2019 to reach 39.2 million units worldwide in 2019, driven especially by growth in emerging markets.
Digital signage solutions have found their way into nearly every possible vertical market and a wide variety of application areas. The untapped market potential is nevertheless still vast and growth is showing no signs of slowing down. Berg Insight forecasts that global shipments of display screens for digital signage will grow from 7.3 million units in 2014 at a compound annual growth rate (CAGR) of 18.7 percent to reach 17.2 million units by 2019. Cellular connectivity is very useful for applications such as temporary signs and in locations where access to fixed line communications is not available or costly to obtain. However, cellular is expected to remain a niche connectivity technology due to the higher costs associated with the technology, especially in bandwidth-intensive applications.
Cellular connectivity is incorporated in more than 0.1 million fare collection devices worldwide today, such as on-board ticket vending machines, stationary vending machines and handheld ticket sales terminals. Berg Insight anticipates that the market potential for cellular connectivity in public transport will expand as account-based fare collection systems gain ground and increase the need for real-time communication. However, the number of fare collection devices that incorporate cellular connectivity is likely to remain relatively modest, as many fare collection devices can share a communication line with other equipment.
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