Retail Applications and Wireless M2M - 2nd Edition

Introduction

The retail industry is an important vertical for cellular M2M connectivity with 10.3 million cellular connections today and a potential market size of nearly 80 million POS terminals, ATMs, vending machines, parking meters 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 21.6 percent to reach 33.2 million connections worldwide in 2017. Shipments of cellular M2M devices will at the same time increase at a CAGR of 10.7 percent from 5.2 million units in 2011 to 9.6 million units in 2017. 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.

Wireless connectivity has become a very popular option for POS terminals and was incorporated in nearly one third of the devices shipped in 2011. Berg Insight forecasts that the installed base of cellular POS terminals will grow at a CAGR of 21.4 percent between 2011 and 2017 to reach 29.4 million units worldwide in 2017. In 2011, approximately one third of the installed cellular POS terminals globally were in use in Europe or North America. Berg Insight anticipates that this share will decline to less than one fifth by 2017, as emerging markets continue to account for the vast majority of market growth and retain higher attach rates for cellular connectivity.

Berg Insight estimates that 24 percent of the ATMs in North America and 5 - 10 percent of the ATMs in Europe were connected to cellular networks in 2011. Wireless M2M is especially relevant for ATMs installed at off-site locations as it offers greater flexibility, shorter deployment times and competitive connectivity fees compared to fixed line alternatives. Berg Insight forecasts that the number of wirelessly connected ATMs in the US and Canada will grow at a CAGR of 12.4 percent to reach 0.22 million units by 2017. The number of wirelessly connected ATMs in Europe are similarly projected to grow at a CAGR of 14.9 percent to reach 0.10 million units in 2017.

The installed base of vending telemetry devices in North America reached an estimated 0.25 million units at the end of 2011, whereas the corresponding figure for Europe was 75,000 units. The vending telemetry market is however still in its infancy in both Europe and North America, as penetration rates are at 2.0 percent and 3.6 percent respectively. Berg Insight expects the adoption rates to accelerate in both North America and Europe during the next few years, resulting in compound annual growth rates in the range of 25 - 30 percent for both regions. Consequently, the installed base of vending telemetry devices in North America is projected to reach 1.0 million units by 2017, whereas the installed base in Europe is forecasted to reach 0.32 million units in the same year.

The parking industry has been one of the earliest adopters of M2M communication technology and today approximately 39 percent of the world's 0.42 million multi-space meters are connected, primarily to cellular networks. Connectivity has in contrast to this only recently become an optional feature in single-space meters, and today only 3 percent of the world's 3.2 million single-space meters are connected. Berg Insight anticipates that connectivity will eventually be incorporated in all parking meters. Berg Insight forecasts that 69 percent of the world's 0.54 million multi-space meters will have be connected in 2017, whereas 18 percent of the world's 2.75 million single-space meters will be connected in the same year.

Cellular connectivity is incorporated in an estimated 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.

This report answers the following questions:

• What is the potential market size for wireless M2M communication in the retail industry?
• Which are the key applications that offer sizable business opportunities?
• Which trends and developments are shaping each vertical market segment?
• Which are the leading providers of vending telemetry solutions?
• When will demand for vending telemetry solutions accelerate in Europe and North America?
• How is the market for wireless ATM connectivity solutions developing?
• Which are the leading providers of connected parking meters?
• What is the attach rate for cellular connectivity in POS terminals by region?
• How is the market for public transport fare collection systems evolving?

Cellular M2M network connections in the retail industry (World 2011 - 2017)

Lars Kurkinen is a Telecom Analyst with a Masters degree in Strategic Management from the Aalto University School of Science and Technology, Finland. He joined Berg Insight in 2010 and his areas of expertise include wireless M2M, mobile financial services and mHealth.

Berg Insight offers premier business intelligence to the telecom industry. We produce concise reports providing key facts and strategic insights about pivotal developments in our focus areas. From time to time we also perform custom research assignments. Our vision is to be the most valuable source of intelligence for our customers.

Table of Contents

Table of Contents

List of Figures

Executive summary

1. POS terminals and ATMs

• 1.1. Payment infrastructure
  • 1.1.1. POS terminals
  • 1.1.2. Automated teller machines
• 1.2. Evolution of electronic payments
  • 1.2.1. EMV migration
  • 1.2.2. Adoption of mobile data communication solutions
  • 1.2.3. Rollout of NFC-ready terminals
• 1.3. POS terminal vendors
  • 1.3.1. Atos Worldline
  • 1.3.2. CCV
  • 1.3.3. CyberNet
  • 1.3.4. Equinox Payments
  • 1.3.5. Ingenico
  • 1.3.6. Key Innovations
  • 1.3.7. Margento
  • 1.3.8. PAX Technology
  • 1.3.9. REA Card
  • 1.3.10. Spire Payments
  • 1.3.11. Thyron Systems
  • 1.3.12. VeriFone
  • 1.3.13. ViVOtech
• 1.4. ATM manufacturers and connectivity solution providers
  • 1.4.1. Contour Networks
  • 1.4.2. Diebold
  • 1.4.3. Digi International
  • 1.4.4. DPL Group
  • 1.4.5. NCR
  • 1.4.6. OptConnect
  • 1.4.7. Triton
  • 1.4.8. Wincor Nixdorf

2. Vending machines

• 2.1. Vending industry players
  • 2.1.1. Vending technology providers
  • 2.1.2. Vending machine manufacturers
  • 2.1.3. Product suppliers
  • 2.1.4. Vending operators
• 2.2. Payment systems
  • 2.2.1. Coin mechanisms and bill validators
  • 2.2.2. Cashless payments
  • 2.2.3. Mobile phone payments and NFC
• 2.3. Vending telemetry
  • 2.3.1. Remote monitoring of vending machines
  • 2.3.2. Vending telemetry in Europe
  • 2.3.3. Vending telemetry in North America
• 2.4. Vending telemetry solution providers
  • 2.4.1. Allomachines
  • 2.4.2. Apriva
  • 2.4.3. BiTX
  • 2.4.4. Cantaloupe Systems
  • 2.4.5. Coinco
  • 2.4.6. cStar Technologies
  • 2.4.7. Mecsel
  • 2.4.8. MEI
  • 2.4.9. Microtronic
  • 2.4.10. Nayax
  • 2.4.11. Smarcom
  • 2.4.12. USA Technologies
  • 2.4.13. Vendon
  • 2.4.14. VendScreen
  • 2.4.15. Vianet
• 2.5. Vending machine manufacturers
  • 2.5.1. Automated Merchandising Systems
  • 2.5.2. Azkoyen Group
  • 2.5.3. Bianchi Vending Group
  • 2.5.4. Crane
  • 2.5.5. Deutsche Wurlitzer
  • 2.5.6. FAS International
  • 2.5.7. Fastcorp
  • 2.5.8. Jofemar
  • 2.5.9. N&W Global Vending
  • 2.5.10. Rheavendors Group
  • 2.5.11. Royal Vendors
  • 2.5.12. SandenVendo
  • 2.5.13. Seaga
  • 2.5.14. Sielaff
  • 2.5.15. Westomatic
  • 2.5.16. Wittern Group
• 2.6. Vending operators
  • 2.6.1. Aramark
  • 2.6.2. Autobar Group
  • 2.6.3. Canteen Vending Services
  • 2.6.4. Selecta
  • 2.6.5. Sodexo

3. Parking meters

• 3.1. The parking industry
  • 3.1.1. Parking industry players
  • 3.1.2. Single-space and multi-space meters in Europe and North America
  • 3.1.3. Pay-by-phone parking
• 3.2. Connected parking meters
  • 3.2.1. Mobile data communication solutions for parking meters
  • 3.2.2. Connected multi-space parking meters
  • 3.2.3. Connected single-space parking meters
• 3.3. Parking solution vendor profiles
  • 3.3.1. Cale Access
  • 3.3.2. Digital Payment Technologies
  • 3.3.3. Duncan Solutions
  • 3.3.4. Hectronic
  • 3.3.5. IPS Group
  • 3.3.6. MacKay Meters
  • 3.3.7. Metric
  • 3.3.8. Parkare Group
  • 3.3.9. Parkeon
  • 3.3.10. POM
  • 3.3.11. Siemens
• 3.4. Private parking operators

4. Public transport ticketing

• 4.1. Modal split of passenger transport
• 4.2. Bus and rail fleets
• 4.3. Fare collection systems
  • 4.3.1. Fare payment
  • 4.3.2. Fare collection devices
  • 4.3.3. Installed base
  • 4.3.4. Mobile data communication solutions
• 4.4. Fare collection system vendors
  • 4.4.1. Cubic Transportation Systems
  • 4.4.2. Scheidt & Bachmann
  • 4.4.3. Thales
  • 4.4.4. Vix
  • 4.4.5. Xerox Transportation Solutions
  • 4.4.6. Almex
  • 4.4.7. FARA
  • 4.4.8. Indra
  • 4.4.9. INIT
  • 4.4.10. IVU

5. Forecasts and conclusions

• 5.1. Wireless M2M in the retail industry
  • 5.1.1. Cellular M2M device shipments
  • 5.1.2. Cellular M2M network connections
  • 5.2. POS terminals
  • 5.2.1. Market developments and trends
  • 5.2.2. Cellular POS terminal market forecast
  • 5.2.3. NFC POS terminal market forecast
• 5.3. ATMs
  • 5.3.1. Market developments and trends
  • 5.3.2. ATM connectivity market forecast
• 5.4. Vending machines
  • 5.4.1. Market developments and trends
  • 5.4.2. North American vending telemetry market forecast
  • 5.4.3. European vending telemetry market forecast
• 5.5. Parking meters
  • 5.5.1. Market developments and trends
  • 5.5.2. Connected multi-space parking meter market forecast
  • 5.5.3. Connected single-space parking meter market forecast
• 5.6. Public transport ticketing
  • 5.6.1. Market developments and trends
  • 5.6.2. Market forecast

• Glossary

• Figure 1.1: Installed base of POS terminals and ATMs (World 2006 - 2010)
• Figure 1.2: POS terminal density by country (World 2010)
• Figure 1.3: Stationary and mobile POS terminals
• Figure 1.4: Card reader modules for mobile computing devices
• Figure 1.5: ATM density by country (World 2010)
• Figure 1.6: EFTPOS penetration in select countries (2010)
• Figure 1.7: EMV implementation status (World 2011)
• Figure 1.8: Shipments of POS terminals with cellular connectivity (World 2011)
• Figure 1.9: Installed base of POS terminals with cellular connectivity (World 2011)
• Figure 1.10: Shipments of NFC-ready POS terminals by region (World 2011)
• Figure 1.11: POS terminal shipments by manufacturer (World 2011)
• Figure 1.12: Equinox Payments POS terminals
• Figure 1.13: Margento mPos data-over-voice POS terminal
• Figure 1.14: PAX Technology POS terminals
• Figure 2.1: Vending machine density by region (World 2011)
• Figure 2.2: Examples of vending machines
• Figure 2.3: Installed base of vending machines by country (Europe 2008)
• Figure 2.4: Examples of product suppliers and brands
• Figure 2.5: Examples of coin mechanisms and bill validators
• Figure 2.6: Examples of cashless payment devices for open and closed systems
• Figure 2.7: Vending telemetry vendor market shares (Europe Q1-2012)
• Figure 2.8: Vending telemetry vendor market shares (North America Q1-2012)
• Figure 2.9: Development of the vending telemetry market in North America (2009 - 2011)
• Figure 2.10: Installed base of telemetry devices by vendor (World Q1-2012)
• Figure 2.11: Product portfolios of vending machine manufacturers (2012)
• Figure 3.1: Examples of connected single-space and multi-space meters
• Figure 3.2: Share of connected multi-space parking meters by vendor (World 2011)
• Figure 3.3: Share of connected single-space parking meters by vendor (World 2011)
• Figure 3.4: Parking meter offering by vendor
• Figure 3.5: Selected European and North American parking operators
• Figure 4.1: Modal split of passenger transport on land (EU and NA 2008)
• Figure 4.2: Bus and rail fleets in public transport (EU and NA 2010)
• Figure 4.3: Evolution of fare payments
• Figure 4.4: Fare collection device segments
• Figure 4.5: Installed base of contactless fare collection devices (EU and NA 2011)
• Figure 4.6: Scheidt & Bachmann fare collection devices
• Figure 4.7: Almex fare collection devices
• Figure 5.1: Cellular M2M connections in the retail industry (World 2011)
• Figure 5.2: Cellular M2M retail device shipments by region (World 2011 - 2017)
• Figure 5.3: Cellular M2M retail device connections by region (World 2011 - 2017)
• Figure 5.4: Deployment of NFC and cellular technologies (World 2011 - 2017)
• Figure 5.5: Cellular POS terminal shipments by region (World 2011 - 2017)
• Figure 5.6: Cellular POS terminal installed base by region (World 2011 - 2017)
• Figure 5.7: NFC POS terminal shipments by region (World 2011 - 2017)
• Figure 5.8: NFC POS terminal installed base by region (World 2011 - 2017)
• Figure 5.9: Installed base of wirelessly connected ATMs (EU and NA 2011 - 2017)
• Figure 5.10: Installed base of vending telemetry devices (EU and NA 2011 - 2017)
• Figure 5.11: Vending telemetry market forecast (North America 2011 - 2017)
• Figure 5.12: Vending telemetry market forecast (Europe 2011 - 2017)
• Figure 5.13: Connected parking meters (World 2011 - 2017)
• Figure 5.14: Multi-space parking meter market forecast (World 2011 - 2017)
• Figure 5.15: Single-space parking meter market forecast (World 2011 - 2017)
• Figure 5.16: Installed base of contactless fare collection devices (EU and NA 2011)

Retail Applications and Wireless M2M - 2nd Edition published by Berg Insight AB in June 5, 2012. This report price starts from US $ 1500.

Press Release

Cellular M2M connections in the retail industry surpassed 10 million in 2011

Global Information Inc. would like to present a new market research report, "Retail Applications and Wireless M2M - 2nd Edition" by Berg Insight AB.

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.

"POS terminals will constitute the lions share of cellular M2M connections in the retail sector throughout the forecast period" says Lars Kurkinen, Telecom Analyst, Berg Insight. "But the penetration rate for cellular connectivity is today actually highest in the multi-space parking meter segment where it is well above 30 percent" he adds. Berg Insight expects that the vending machine segment will present a major opportunity for wireless connectivity in the long term and the study indicates that vending telemetry solutions will be the fastest growing segment during the next six years. In Europe, the installed base of vending telemetry devices is projected to grow from 75,000 units in 2011 to 324,000 units in 2017. Similarly, the installed base in North America is projected to increase from 0.25 million units in 2011 to one million units by 2017. "Every vending machine will eventually be connected, but costs for the wireless M2M hardware and subscriptions still need to come down significantly before this vision becomes reality", Mr Kurkinen concludes.

The number of cellular M2M connections in the retail industry reached 10.3 million worldwide in 2011, according to the new research report from Berg Insight. Cellular M2M technology enables devices such as POS terminals, ATMs and ticketing machines 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. Berg Insight forecasts that the number of cellular M2M connections in the global retail industry will grow at a compound annual growth rate (CAGR) of 21.6 percent during the next six years to reach 33.2 million connections in 2017. Shipments of cellular M2M devices for retail applications will at the same time increase at a CAGR of 10.7 percent from 5.2 million units in 2011 to 9.6 million units in 2017.

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.