The M2M market has become a fully mainstream segment of the cellular industry.

By the end of 2011, most major mobile operators in North America, Europe and the Asia-Pacific region had established M2M business units to focus their efforts in this fast growing market. The market for cumulative cellular M2M connections will rise from about 110 million connections in 2011 to approximately 365 million connections by 2016. This represents a compounded annual growth rate of roughly 27 percent by 2016 and translates to about $35B in connectivity services revenue.

The two largest cellular M2M market segments over the forecast period, by revenue, will be automotive telematics and smart energy. Automotive telematics, including factory-installed systems such as GM’s OnStar service, aftermarket services such as usage-based insurance, and fleet management systems, will together represent more than $15.5B in 2016. Meanwhile, smart energy, specifically cellular connectivity to smart meters and data concentrators, will represent more than $7.5B in 2016.

“As mobile operators further develop their M2M service offerings, software platforms and M2M application developer support will feature as increasingly larger components of the operators’ services,” says Sam Lucero, practice director, M2M connectivity. “For example, AT&T announced on January 9, 2012 that it would be reselling Axeda’s M2M application platform in a US carrier exclusive deal. This platform will enable AT&T customers to more easily develop and deploy complex M2M applications.”

ABI Research’s new study, “Cellular M2M Connectivity Services,” discusses the key trends, technologies and players impacting the cellular M2M connectivity services market.