2008 a Tough Year for M2M, but the Worst May Be Over

ABI Research has been tracking shipments of cellular M2M (machine-to-machine) modules since 2003, and for four years they increased on average 25-30% annually. In fact in 2007, growth peaked at 37%. However the final shipment numbers for 2008 have just been added to the firm�s M2M Market Forecasts, and they tell a very different tale.

�In 2008, growth in cellular M2M module shipments was only 4%,� reports practice director Sam Lucero, �and because of falling ASPs, we actually saw a substantial decline in revenue for the first time since we began collecting this data. While none of this is too surprising in light of the general economic conditions around the world, now we have quantified the changes.�

Hardest-hit segments include automotive telematics and home security. Slightly less affected by the downturn are remote monitoring and some niche applications, particularly as some OEM customers shift from sales of individual products to the provision of services that deliver recurring revenues. As companies make that shift, opportunities arise to embed cellular wireless connectivity in a wide variety of products as part of the service.

It�s still a tough situation, but as 2009 progresses, there may be light at the end of the proverbial tunnel. ABI Research has been carrying out surveys and receiving feedback from all participants in the M2M value chain, from which it appears that the last quarter of 2008 and the first quarter of 2009 were the bottom of the curve. �It looks as if things have now stabilized,� says Lucero, �and the second half of 2009 should be stronger than the first half.�

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 nodes and service revenue, including smart metering. Shipments, active nodes, and revenue are segmented on the basis of region, application, and air interface standard.

It is complemented by the firm�s �Advanced Metering Infrastructure (AMM and AMI)� report, which focuses specifically on smart metering and home area networks.