2. M2M and “The Internet of Things” describe the connection of machines and sensors
through any means to the Internet
Fixed (Wireline) Technologies Wireless Technologies
Industrial Ethernet Cellular
Powerline GSM/GPRS/EDGE
Broadband CDMA/1xEV-DO
3G
Satellite
Wireless LAN
Bluetooth
ZigBee
Other 802.15.4 and related technologies
M2M offers opportunities in many service sectors
Buildings/Facilities Energy Medical/Healthcare Transportation
Office Equipment Meters Medical Devices Vehicles
HVAC/Environmental Distributed Generators Retail Airplanes
Systems Electricity Grid Scanners & Registers Transport Systems
Access Controls Pipelines Lighting & Refrigeration IT & Networks
Consumer/Professional Industrial Systems Enterprise: IT/Data
White Goods/Appliances Automation & Control Security/Public Safety Center, Office
Game Systems Equipment Homeland Security Public: Services
Services,
Consumer Electronics Capital Equipment E-Commerce, etc.
3. The M2M market is highly fragmented in each component of the value chain – no single
highl al e
market leader has been established
Managed
Hardware Enablement Network Services
Services
Aggregators/ Value-Added
M2M Modules/ End
Chip Vendors Platform Comm Services Services /
Devices Users
Software Applications
4. Machine to Machine Market Opportunity
pp y
M2M devices are poised for rapid growth, exceeding 600 million devices by 2015 and
accounting for $24B in service revenues
Worldwide M2M Devices
(Millions) CAGR%
Middle East & Africa
M2M – devices that 615 40%
communicate data Asia-Pacific
25 40%
wirelessly to other devices Latin America
for the purpose of 92 42%
North America
automating data collection
and monitoring of large Central Europe
p 473
38 38%
complex systems/networks Western Europe 17
69
365 134 40%
28
12
53
102
267 21 66 40%
38 78 47
Utility 15
Meters 182
56 34
27
119 11 23 260 34%
39
81 19 209
59 16 167
13 27
11 124
19 83
14
32 50
24
2008 2009 2010 2011 2012 2013 2014 2015
Revenue
($B)
7.6 8.5 10.1 12.9 15.9 18.5 20.9 24.2
Source: Strategy Analytics, AV&Co analysis
5. Mobile Internet Devices (MIDs)
Emerging MIDs and especially netbooks are gaining popularity worldwide, and will be a
key driver of traffic growth within 3 to 5 years
Worldwide M bil I t
W ld id Mobile Internet Devices
tD i Worldwide N t b k/N tb k Shi
W ld id Notebook/Netbook Shipments
t
(Millions) (Millions)
Netbooks/UMPCs
633.2 Notebooks
Netbooks/UMPCs Share %
18.6% 18.3%
17.6%
18.0% CAGR%
MIDs cover a wide range of
CAGR% devices:
Smartphones 282.3 18.1%
36% 416
UMPCs 14.2%
Netbooks 248.7 51.7 25.8%
Portable
P t bl navigation d i
i ti devices 216.9 46.3
E-book readers
Portable media/MP3 181.6 39.0
players
Handheld gaming devices 32.0
145.3
20.6
MIDs have Internet access
230.6 16.6%
via WLAN (WiFi) or WWAN 202.4
(3G or better) 177.9
149.6
54 124.7
2007 2012 2015 2008 2009 2010 2011 2012
6. All four U.S. carriers have made significant investments in strategic relationships or
network improvements to capitalize on this emerging market
AT&T signed an exclusive deal with T-Mobile and Sierra Wireless agreed to
Jasper Wireless to facilitate work together on product development,
kt th d td l t
connection of consumer and M2M marketing, sales, and deployment of
devices to their network (May 2009) M2M solutions, starting in Germany
KPN became Jasper’s preferred (September 2009)
European network operator and
exclusive operator in Belgium,
Germany, and th N th l d KPN
G d the Netherlands.
Cadec Global, provider of fleet
has also made an equity investment
management solutions, began an M2M
in Jasper (Q1 2010)
partnership initiative with Aeris in February
AT&T announced a developer
2010
connection kit to facilitate
deployment of new M2M devices on
their network (March 2010) GE developed Wi-MAX-based smart
meters that were available as of 2009
GE Healthcare signed an agreement with
Sprint for wireless networks, services, and
software at six Texas hospitals (April
Vodafone, Verizon, and nPhase
, , 2009)
announced a strategic alliance to
accelerate adoption of M2M
technologies (February 2010)
Verizon reported in Q1 2010 that 7.3% Sprint and M2M DataSmart have a
of 101 million wireless connections are multi-year agreement to facilitate the
M2M deployment of M2M devices on
Sprint’s network (September 2009)
7. Supply Side Challenges Demand Side Challenges
Diverse rate plan needs of different M2M devices and Operation/running cost was by far the highest
services means increased complexity on the part of concern of adopters surveyed
wireless carriers Data integration/ interoperability, initial/ installation
g p y,
Evolving network technologies (GSM vs. CDMA, LTE cost, and development of new support structure
vs. WiMAX) create complex choices for device followed in importance, but were still considered
manufacturers critical challenges
Educating th market
Ed ti the k t 41% Operation Cost/Running
O i C /R i
Improving device certification
process 26%
Data Integration/Interoperability
Reducing M2M industry value
25%
chain complexity
Supporting open access network Initial Cost/ Installation
24%
policies
Forming partnerships between
23% Development of Support Structure
operators and HDW vendors
Identifying business models 21% Complexity/ Risk Assessment
Reducing sales cycle time 19%
Gaining Successful Adoption
Overcoming market fragmentation 17%
Establishing cooperation between
Regulation &/or Liability
17%
carriers
Forming partnerships with
14% Choosing Right Partner/ Supplier
"machine" manufacturers (OEMs)
Creating app. Developer
awareness and interest
10% Reliability of Technology
Eliminating channel conflict 8%
Privacy & Security Issues
Changing the M2M acronym 4%
0% 10% 20% 30% 40% 50% 0 20 40 60 80 100 120
Sources: Wireless Week Magazine “A Web of Challenges, Connections: M2M,” 2/1/2010; Beecham 2008 M2M Adopter Survey
8. GPS tracking and security are the most likely uses of M2M communication for SMBs
based upon our survey
What are the most likely uses for M2M communications at your location? (select all that apply)
Do you have any ideas concerning M2M that you would like to see developed?
Most likely uses for M2M communications Selected Comments from the
interviewees
• “The current M2M applications would
Tracking and p
provide the resources that we are looking g
34%
navigation
into at this time such as tracking fleet
vehicles”
• “Implantable chip to allow tracking access
Safety and
to sales reps. Make sure they work a full
32%
security y
day”
• “Read tanks remotely”
• “Not familiar with the applications. Am
taking a seminar on this right now”
Asset
management
17% • “Able to incorporate with in store computer
systems. Such as Open Table or Hot
Schedules”
• “Up - to - the minute information regarding
Machine
control
17% wine barrel system pressure after harvest
transmitted from remote location (i.e. form
California to France or vise versa)
versa)”
0% 10% 20% 30% 40%
• “Automation of commercial food production
equipment, room temperature control”
Source: AV&CO primary research survey, n=500
9. Location-based
Location based messaging and monitoring has many potential applications
• Key features across all applications include two-way, location-specific communication and monitoring
• Opt-in and Opt-out models are available and have significant impacts on specific applications
Customer Select Applications
• Natural disaster/crime/safety alerts
• Crowd monitoring/management
• Terrorist tracking and monitoring
Government • Amber Alerts (improved response with tracking abducted child)
• Monitoring of Check Points (e g borders battleground check points)
(e.g., borders,
• Communication for military personnel family (e.g., birth announcements)
• Mobile device management
• Monitoring foot traffic at major events
• Customer notifications and communication
Commercial
C i l • Healthcare applications (monitoring, emergency response locating, messaging)
• Order completion
• Weather/safety alerts
• Weather Response: school closures
• Student/ f
St d t/ faculty notification of school class cancellation, room/ b ildi changes
lt tifi ti f h l l ll ti / building h
Education • Communication of registrar and student finance deadline requirements
(select vertical) • Tracking school buses/traveling teams
• Crime/ safety alert
• Family member location
y
Parents • Controls on Illicit text messages, emails, instant messages or voicemails received by children
10. Mobile Resource Management (MRM)
MRM is a category of business solutions that enables companies to more effectively
manage mobile workers, mobile tasks and mobile assets
Types of MRM Solutions Industry Drivers Key Purchase Criteria
Field Force Management Attractive, hard dollar ROI Features and Functionality
• Business need: to manage the field • Benefits include reduced overtime, fuel • GPS location, tracking, monitoring
workforce in order to reduce business and labor costs due to increased • GPS navigation and optimized
costs and maximize ROI dispatch and scheduling efficiencies, routing
Field Service Management improved job completion rates, tighter • Ti
Timecard recording and reporting
d di d ti
• Business need: to manage the control over spare parts inventory, and • Work order management
delivery of products and services to higher insurance policy discounts • Alerts and geo-fencing
customers in order to maintain strong Affordable entry points • Data collection and reports
customer service while keeping • The ability to monitor and track Integration and Customization
business costs to a minimum employees and assets from IP-
p y Options
p
Field Asset Management connected devices and the growth of • Simple configurations: back-office
• Business need: to manage fixed and low-cost GPS-enabled mobile devices integration not required
mobile assets in order to ensure has increased affordability and flexibility • Configurations and integration:
utilization is maximized and therefore Competitive advantage with MRM software is configured with
minimize costs customers back-end systems
• MRM can positively impact a company’s
iti l i t ’ • Complete customization: open
customer satisfaction and customer developer tools and APIs for
retention metrics through more timely customized development
and prepared technicians and increased Cost Components
first call resolution rates • Mobile devices
• Monthly carrier data subscription
• MRM application software
li ti ft
• Systems integration work
11. Strategic Implications in the M2M Ecosystem
• Given the industry fragmentation – how will industry evolve?
• Reliance on carriers and other third parties to provide network access – how
can carriers play a larger role?
• Who is positioned to win in the space?
12. Contact Details
Contact Details
Michael Grossi
Direct 617.753.7209 Altman Vilandrie & Co.
53 State Street
Mobile 617.480.9389 37th Floor
mgrossi@altvil.com Boston, MA 02109
Telephone 617 753 7200
Fax 617 439 4290
www.altvil.com
Michael Grossi, Director
Michael is a Director with Altman Vilandrie and Company and focuses on wireless and digital
media sectors. Prior to AV&Co, Michael was an SVP & GM with Helio, a highly innovative MVNO
in the U.S. While at Helio, Michael led all Strategy, Business/Corporate Development and was
GM of the Mobile Data Services team responsible for both the data P&L and product
development.
Prior to AV&Co, Michael was a Vice President with Adventis, a strategy consultancy, and a leader
in the wireless practice and has 10 years consulting experience. Michael has led many strategy
engagements for his clients spanning all facets of the wireless value chain including equipment
manufacturers, service providers and content providers.