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Shipments of cellular modules for machine-to-machine (M2M) communications will reach over 100 million in 2015 according to IMS Research’s new report “The World Market for Cellular Modules in M2M Communications.” Dropping module prices, reduced connectivity rates from carriers, and increased availability of cellular networks worldwide are all key drivers behind this growth. However, the report also finds that the level of uptake of cellular M2M will differ among vertical markets.
Josh Builta, IMS Research Market Analyst and author of the study, states, “One of the greatest underlying strengths of the cellular module market is that modules are increasingly being utilized in a wide variety of M2M applications. Diverse industries, ranging from metering to digital signage, are becoming more reliant on cellular technology as a means to transmit vital information. The cumulative effect of increased uptake in so many markets will result in total cellular M2M module shipments growing at over a 24 percent CAGR throughout the forecast period.”
IMS Research does not expect this growth will be evenly spread among all vertical markets, however. “Given the assorted nature of these markets, different factors will drive or inhibit the growth of cellular M2M within each,” said Builta. Certain vertical markets appear likely to emerge as the forerunners in the use of cellular M2M as they will be driven by government driven mandates. Builta continues, “Probably the best example is the automotive industry, in which stolen vehicle tracking in Brazil and emergency call systems in Europe are forecast to become mandatory as a result of government regulations. Pending legislation in the EU, known as eCall, would be particularly significant as it would drive the penetration rate of cellular modules in new vehicles in Europe to 100 percent.” Partially as a result of these government initiatives, IMS Research forecasts modules used in automotive market will have a 31 percent CAGR during the forecast period.
While the overall outlook is bright, concerns over the cost, reliability, and security of cellular technology will limit uptake of cellular modules in some vertical markets for the near term. Markets including security and factory automation are likely to rely on wired connectivity as well as alternative wireless options for a good portion of their M2M communications. At the same time, healthcare, a market with great potential for cellular modules, must overcome a series of privacy and liability concerns before it can reach a larger market size.