In 2010, only about 40,000 4G machine-to-machine (M2M) cellular modules will ship. All will be WiMAX-based. In contrast, ABI Research estimates that in 2015, more than 12.6 million of the devices – including LTE-compatible models – will ship worldwide.

Why would M2M communication, which usually involves relatively low data-rates, migrate to 4G?

According to M2M practice director Sam Lucero, the key word is ‘usually’: “A few M2M applications do require lots of bandwidth and high throughput, and it is those applications – telematics (distributing multimedia content to vehicles), fixed wireless terminals (distributing a broadband connection) and industrial PDAs – that will benefit from 4G networks’ capabilities.

There are also secondary applications that may benefit from WiMAX and LTE to some extent, such as digital signage and video surveillance networks. WiMAX may also be used for smart metering (AMI). The meters themselves don’t require much bandwidth, but some other smart grid elements within the feeder distribution network do. Many utilities, especially in North America, traditionally deploy their own infrastructure: WiMAX is something they can do and control themselves.

What advantages do 4G networks offer for M2M? “4G offers several benefits for M2M,” says Lucero. “The first, of course, is sheer bandwidth. 4G networks are also more spectrally efficient than 3G. Finally, there is the question of future-proofing: 4G networks are going to be around for quite a long time.”

On the other hand, there are some flies in this ointment. 4G modules cost more because they contain more RF chains and larger processors. Price is also based on demand, and many M2M applications do only require low data rates. “Low data rate applications won’t migrate to 4G in the next five years,” says Lucero, “though towards the end of the decade they may, as 3G networks start to wind down.”

Network coverage issues will also inhibit uptake for some time, as 4G network deployments start in urban areas and are gradually extended to rural regions.

ABI Research’s “M2M Market Forecasts” database tracks the M2M market on the basis of wireless WAN embedded modules and product revenue, as well as wireless WAN active connections and service revenue.