Cellular Machine-to-­Machine (M2M) communications first started in the era of analog cellular connectivity and have largely shifted now to 2G GPRS and CDMA connectivity.

Certain M2M applications can benefit from the higher data rates than 3G cellular offers and it is tempting to assume that all M2M communications will be 3G eventually.

But a study from ABI Research forecasts that 3G modules will achieve only a 30 percent penetration of the market by 2012 and will become the technology of choice only when the bandwidth demands and economics dictate; “future-proofing” will play a smaller role in 3G M2M market development over the next five years.

In addition, according to Sam Lucero, senior analyst, M2M and Wireless Connectivity, “Multiple Wi-Fi and WiMAX will both challenge 3G cellular technology as the most suitable methods to achieve high-speed M2M communications for many applications and in many locales.”

High-speed wireless M2M will find its natural uses where the need for high bandwidth outweighs the added cost. These include: fixed-wireless terminals that use cellular backhaul; multimedia content delivery to point-of-sale terminals such as digital marketing displays; high-speed telematics connectivity, including real-time navigation information; remote information displays—used, for example, in digital mobile advertising; and video surveillance, where wireless CC backhaul permits camera deployment without the need for cabled connections at each location.

In addition to the added cost of 3G modules, says Lucero, wireless network coverage is an issue. “Some think that cellular networks will eventually be all-3G. But ABI Research does not believe that is practical, in terms of cost and power consumption, for all operators in all geographical areas. WiMAX and (especially) municipal Wi-Fi offer attractive alternatives to CDMA 1xEV0DO or HSDPA 3G technologies for wide area wireless M2M,” says Lucero.

“They are both more cost-effective and operationally efficient. With backing by Intel as well as key carriers worldwide, WiMAX and municipal Wi-Fi will feature as important high-speed wireless M2M networks in the coming years.” The new ABI Research study, “3G Machine-to-Machine (M2M) Communications,” examines the market for cellular 3G M2M from the perspective of cellular embedded module vendors and analyzes the impact that WiMAX and municipal Wi-Fi will have on market development.