Published on March 5, 2014
Global Machine-to-Machine (M2M) Communications Test and Monitoring Equipment Market Smart Homes, Telematics, and Healthcare Drive Demand for M2M Testing ND0A–30 December 2013
Research Team Lead Analyst For more information: Olga Shapiro Jeannette Garcia Program Manager, Measurement and Instrumentation Corporate Communications, Measurement and Instrumentation, North America +1.210.477.8427 firstname.lastname@example.org Research Director Strategic Review Committee Leader Kiran Unni Sujan Sami Research Director, Measurement and Instrumentation Industry Manager, Measurement and Instrumentation NDOA-30 2
Contents Section Slide Numbers Executive Summary 5 Market Overview 9 Total Market - • Value Chain Analysis 30 • External Challenges: Drivers and Restraints 36 • Forecasts and Trends 48 • End-user Analysis 58 • Market Share and Competitive Analysis 70 • M2M Communications Testing and Monitoring—Competitor Profiles 79 Market Trends 83 R&D Segment Breakdown 94 Monitoring Segment Breakdown 99 I&M Segment Breakdown 104 Manufacturing Segment Breakdown 109 NDOA-30 3
Contents (continued) Section Slide Numbers The Last Word (Conclusions and Implications) 114 Appendix 117 NDOA-30 4
Executive Summary NDOA-30 5
Executive Summary—Market Engineering Measurements Total M2M Communications Test Equipment Market: Global, 2013 Market Overview Market Stage Market Revenue Growth $3,21.7 M (2013) Customer Price Sensitivity 9 7 (scale:1 [Low] to 10 [High]) Decreasing Stable Degree of Technical Change (scale:1 [Low] to 10 [High]) Market Size for Last Year of Study Period $981.1M (2020) Number of Competitors 60+ (active market competitors in base year) Increasing Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan NDOA-30 6
Market Overview—Technology Capability Definition • M2M is a technology that allows 2 or more intelligent machines to communicate with each other without human intervention via a communication network. • Once the data is transmitted over the network, it is collected for analysis and assessed properly to extract essential information. Advantage M2M technology is advancing with the use of embedded sensors and chipsets in almost every possible device. The presence of these chipsets makes it possible for end users to access anything, anywhere. Another important strength of M2M is the delivery of real-time streaming information with ubiquitous presence of broadband. Technologies such as cloud computing and 4G are also fuelling the growth of M2M. NDOA-30 End-user Applications • M2M technology has been used in telematics applications predominantly. Of late, it has become important in applications such as smart grids, industrial automation, retail, healthcare, and consumer electronics. • The main advantage of M2M is real-time delivery of reliable data and easy access to a device or machine. Impact M2M is moving from an early growth stage to a mature stage. Standardization efforts and several important collaborations across the value chain are expected to foster the eventual growth of M2M. With reduced hardware costs, lower data tariffs, and ease of integration with platform-based services, wider adoption of M2M communications is expected in approximately 3 years. 7
Definitions and Scope of Research End-user segmentation • • M2M Communications Test Equipment Market • North America • Europe • Rest of World (ROW) Transportation and Telematics M2M Communications Market • Asia-Pacific • Communications Market • Geographical segmentation* Consumer electronics Financial Services and Retail M2M Communications Market • Healthcare M2M Communications Market • Utilities and Industrial M2M Communications Market • Security and Safety M2M Communications Market: • Product segmentation Others Application segmentation • Cellular M2M test equipment • Research & Development (R&D) • Satellite M2M test equipment • Manufacturing • Wireless M2M test equipment • Installation & Maintenance (I&M) • Monitoring *Note: geographical segments and product segments are not analyzed in detail in this research service. Source: Frost & Sullivan NDOA-30 8
Market Overview—Definitions • M2M is a technology that allows 2 or more intelligent machines to communicate with each other without human intervention via a communication network. Once data is transmitted over the network, it is collected for analysis and assessed properly to extract essential information. • M2M technology has been predominantly used in telematics applications. More recently, it has become important in applications such as smart grids, industrial automation, retail, healthcare, and consumer electronics. • The main advantage of M2M is real-time delivery of reliable data and easy access to a device or machine all over the globe. However, M2M has several challenges such as complicated data traffic management, lack of standardization across communication layers, lack of suitable security over multiple data hops and high-operational costs. • Apart from these challenges, the industry is highly fragmented and there is a low rate of end-user acceptance. In addition, replacement of human machine interface (HMI) with M2M requires a higher level of education among end users. • The data flows from the machine over a network, which could be satellite, wireless, or cellular. Source: Frost & Sullivan NDOA-30 9
Market Overview—Definitions (continued) • Cellular M2M Communications are defined as communication taking place over cellular networks. • Global system for mobile communications (GSM) is an international standard for cellular communication in digitized format. It uses the time division, multiple-access (TDMA) format. • Code division multiple access (CDMA) multiplexes data into a single transmission line, thereby fully utilizing the available broadband spectrum for digital cellular wireless applications. • Wideband-CDMA (W-CDMA) is an air interface technology, and UMTS uses this technology for radio interfacing. • The 2nd Generation (2G) is a wireless telecommunication standard in which the radio signals in the form of text and phone data services are encrypted digitally. Technologies such as GSM and CDMA are used as platforms to operate 2G. • EGPRS, EDGE, and Evolved EDGE, collectively referred to as 2.5G wireless technologies, provide upgrade paths for 2G (2nd generation) wireless technologies to achieve higher data rates. • The 3rd Generation (3G) is an enhanced version of 2G, with extensively incorporated functionalities such as mobile Internet, email, video calls, and television channels on the mobile, apart from the regular text and voice services. Technologies such as UMTS and HSPA serve as 3G operational platforms. Source: Frost & Sullivan NDOA-30 10
Market Overview—Definitions (continued) 4th Generation (4G) is a form of wireless communication for rapid data transfers retaining all the advanced features and applications embedded in 3G services. LTE and WiMAX are commonly used technical launching platforms for 4G services. Long Term Evolution (LTE) is the superseding technology developed by 3GPP (3rd Generation Partnership Project) that has resulted in processing larger spectrum requirements. It provides a spectrum bandwidth of multifold magnitude, compared to the existing technologies, at a lower cost and with faster data transfer rates. High-speed Packet Access (HSPA) is a combination of uplink (HSUPA) and downlink (HSDPA) technologies taking place on a mobile broadband network; it is an advanced version version of UMTS/WCDMA. Wireless M2M Test Equipment • Broadband Wireless Access (BWA) is the technology through which wireless data is delivered or provided by means of broadband access. • Universal Mobile Telecommunication System (UMTS) comprises text data and digital data such as voice, video, and multimedia. • High-speed Packet Access (HSPA)is a combination of uplink (HSUPA) and downlink (HSDPA) technologies taking effect on a mobile broadband network; it is a boosted version of UMTS/W-CDMA. Source: Frost & Sullivan NDOA-30 11
Market Overview—Definitions (continued) Wireless M2M communications • Worldwide Interoperability for Microwave Access (WiMAX) is an advanced format of BWA, and it supports wireless cellular mobility and fixed-wireless applications. • Wireless local access network (WLAN) is a technology by which a mobile device (or computer) can be connected to the local access network by means of a wireless connection. With WLAN, connectivity is achieved from an external adapter to a local router and then to the access point of the device. It includes WLAN technology, 802.11ac and 802.11ad.and emerging technologies such as MIMO (multiple input, multiple output) in the 802.11n standard • With Bluetooth, a device-to-device wireless connection can be made for data transfer. WLAN and Bluetooth vary in hardware composition. • ZigBee is a low-cost, low-power, wireless sensor network that uses RF signals for communication. ZigBee’s precision derives from 2-way communication between multiple tags and readers that form a mesh network. Accuracy increases in conjunction with the amount of points of communication. • Near field communication (NFC) standards cover communications protocols as well as data exchange formats. They are based on existing short range, HF technologies working at 13.56 MHz. Source: Frost & Sullivan NDOA-30 12
Market Overview—Definitions (continued) Radio frequency identification (RFID) is a unique method of identifying objects by leveraging technologies that communicate using radio waves. It includes any technology that communicates by using radiowaves in low frequency (LF), high frequency (HF (excluding smart cards)), ultra high frequency (UHF), microwave, ultra wideband(UWB), and other frequencies. RFID devices are designed to track objects and animals. Therefore, it is capable of long read distances and incorporates security features. Satellite M2M communications: Satellite forms a small part of the total wireless M2M market. It is expected to be a lucrative portion in terms of average sales price for equipment and monthly sales ARPU. Satellite is mostly used where installations are very difficult. It is also used for transmitting data safely, especially when cheaper network is being put to use as a primary network for the delivery of services. Source: Frost & Sullivan NDOA-30 13
Market Overview—Definitions (continued) A smart meter is an electronic device that monitors consumption in more detail than a conventional meter; and if connected to an M2M network communicates information to the local utility for monitoring and billing purposes (telemetering). In this study all smart meters are networked via M2M, smart meters that are not networked are not discussed or quantified. Hybrid networks can be a combination of RFID, all types of wireless WAN, Wi-Fi, WiMAX, PAN, wireline, and satellite networks. Hybrid network solutions will increase in popularity during the forecast period as a way for businesses to ensure data delivery and also decrease service or data transfer costs. For a small increase in up-front equipment costs, an M2M network can use wireline data transfer (the cheapest alternative) for the majority of their network traffic, and gain the resiliency of a fallback wireless or satellite network in case the wireline network is offline. Source: Frost & Sullivan NDOA-30 14
Market Overview—Test and Measurement Definitions Research and development (R&D) • R&D test equipment includes the RF generators, RF analyzers, load/ functional testers, and protocol analyzers used in research laboratories during the pre-deployment stage. • Conformance or certification testers are also R&D solutions. Such solutions are used to test protocol implementation and check whether equipment conforms to standards. They include one-box testers that are used to test the performance, protocol, and capability of cellular access devices such as cell phones and smartphones, as well as connected devices, such as laptops, netbooks, notebooks, tablets, and wireless-enabled PDAs. It also includes design software used at the R&D level. Manufacturing • The test equipment covered includes the systems used to test user equipment and services. These devices include bench-top as well as single-box testing systems Within the manufacturing segment, one-box testers is a sub-segment. These testers are simple performance protocol testing solutions. • It also includes test equipment used for functional testing, at the product level. Source: Frost & Sullivan NDOA-30 15
Market Overview—Definitions I&M • I&M test equipment primarily comprises RF handheld instruments for troubleshooting and the maintenance of wireless base stations and repeaters. Access networks, air interfaces, base station testers, drive tests, and network performance test equipment are included in this segment. • It also includes equipment used to monitor the network interference. Monitoring • The network monitoring systems covered in this segment include both probe-based and softwarebased solutions that deliver end-to-end quality of service (QoS) and quality of experience (QoE) visibility and real-time IP service monitoring and verification. • Monitoring protocol analyzers and active and passive monitoring systems are also included. • The study covers the use of test equipment at the chipset and the module level in the M2M communications value chain. Source: Frost & Sullivan NDOA-30 16
Market Overview—Definitions (continued) Consumer electronics Transportation and telematics • Laptops/netbooks/notebooks • eReaders • Others—connected consumer display and picture frames • Vehicle convenience and safety • Vehicle diagnostics • Others—fleet and asset tracking Healthcare Security and safety • • • • • Intrusion Detection and Safety Systems • Remote Surveillance and Access Control • Others—roadside speed monitors and automatic lighting controls Patient monitoring and reporting Adherence and reminders Others—patient-provider collaboration (video communication and image uploads and management) Utilities and industrial Financial services and retail • • • • • POS terminals and devices • ATMs, vending machines, and kiosks • Others—digital signage and asset tracking Smart grid components Industrial monitoring and control Applications and devices Others—industrial routers, M2M gateways and agricultural systems Source: Frost & Sullivan NDOA-30 17
Market Overview—Definitions (continued) Geographic Segmentation Americas— This region includes North, South, and Central America as well as the Caribbean islands. Rest of World— This region includes Africa and the greater Middle East, which is comprised of the Persian Gulf states, Lebanon, Jordan, Syria, Israel, Iran, Afghanistan, and Pakistan. Europe—Europe includes the EU states, the Commonwealth of Independent states (CIS) in Europe, Turkey, and the Caucasian Republics. APAC—This region includes Central Asia, the CIS states in Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan, Azerbaijan, and Armenia), East Asia, Australia, and Oceania. Source: Frost & Sullivan NDOA-30 18
Market Overview—Key Questions This Study Will Answer Is the market growing, how long will it continue to grow and at what rate? Are the existing competitors structured correctly to meet customer needs? Is this an industry or a market? Will these companies/products/services continue to exist or will they get acquired by other companies? Will the products/services become features in other markets? How will the structure of the market change over time? Is it ripe for acquisitions? Are the products/services offered today meeting customer needs or is there additional development needed? Are the vendors in the space ready to go it alone, or do they need partnerships to take their business to the next level? Source: Frost & Sullivan NDOA-30 19
Market Drivers—Impact and Duration Total M2M Communications Test Equipment Market: Key Market Drivers, Global, 2013–2020 Drivers 1–2 Years 3–4 Years 5–7 Years Improved wireless standards for smart device communications H H H Growing adoption in smart homes, electronics, and healthcare sectors H H H Increased collaborations H M M Increasing government regulations M H H Growth in ubiquitous computing M H H Emerging 4G/LTE networks M M H Impact Ratings: H = High, M = Medium, L = Low NDOA-30 Source: Frost & Sullivan 20
Restraints—Impact and Duration Total M2M Communications Test Equipment Market: Key Market Restraints, Global, 2013–2020 Restraints 1–2 Years 3–4 Years 5–7 Years Lack of standardization across layers H H M Existing fragmentation H H M Low scalability and reliability H M M Traffic management is complicated H M L High operational costs M M M Impact Ratings: H = High, M = Medium, L = Low NDOA-30 Source: Frost & Sullivan 21
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Appendix NDOA-30 23
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