M2MAt its core, building ‘the Internet of Things’ means building machine-to-machine (M2M) connections, and those will nearly triple between this year and 2018, with cellular-WAN wireless M2M connections expanding from 220 million to nearly 630 million, according to a new report from Infonetics Research.

With nearly 1.7 billion M2M connections worldwide, revenue for the global market for M2M services totaled just over $16 billion in 2013, according to the research firm’s “M2M Connections and Services by Vertical” report. Infonetics forecasts that will increase at an 18 percent compound annual growth rate (CAGR) from 2013-2018.

“M2M continues to gather momentum as enterprises, in the never-ending pursuit of competitive advantage, seek to find new ways of using connected technologies to improve business agility and lower operational costs,” Godfrey Chua, directing analyst for M2M and The Internet of Things at Infonetics Research, was quoted in a press release.

“Among the cellular generations, 2G and 3G are the majority currently, but it’s LTE that will grow the fastest, starting from a small base and then expanding rapidly, supported by efforts like AT&T/GM/OnStar and other connected car initiatives, as well as China Mobile’s massive LTE TDD network rollout.”
Key findings from Infonetics’ report include:
  • A growing list of global tier 1 players are supporting more than 10 million M2M connections each;
  • M2M “access” services—where operators’ broadband services function as M2M access solutions—make up over 16% of M2M service revenue, around $3 billion;
  • 80% of M2M devices in 2013 were connected via personal area network (PAN) technologies such as WiFi, Bluetooth, and ZigBee
  • For technology vendors, it is increasingly important to build networking solutions that take into consideration the architectural requirements of the various M2M use cases that are proliferating, as well as the portfolio of emerging connection technologies.