This presentation is an excerpt of our M2M expert's Samuel Ropert intervention at M2M World Innovation Congress 2013 in Nice. It sums up the Market Figues & Trends about the M2M market untill 2016. Read more on our blog : http://blog.idate.fr/the-enormous-growth-of-internet-of-things-2/?/lang-pref/en/

1. The Machine-to-Machine
Market, 2012-2016
Market Figures & TrendsSamuel ROPERT
Senior consultant – M2M lead expert
+33 4 67 14 44 77
s.ropert@idate.org
Market & Data
 M2M INNOVATION WORLD CONGRESS, September 24-26, 2013 – Nice

2. 2
• Recent years: a few major
verticals
- Fleet management
- Industrial asset management
- Security
- PoS
• 3 impacting verticals
- Automotive (40% CAGR, 2012-
2016)
- Connected consumer electronics
(15% CAGR, 2012-2016)
- Utilities (60% CAGR, 2012-2016)
• Future
- focusing on emerging segments
- hundreds of million of machines in
each main regional market (health,
home automation).
Source: IDATE
M2M development by vertical industry
Future M2M market growth
will come from the development of new vertical markets
Cellular modules evolution, by vertical, in million units
Source: IDATECopyright © IDATE 2012

3. Value chain is very fragmented
A combination of value chains
Source: IDATE
"Machine" Module Network Data
Processing
Services
Endclient
Endusers
Sensors
IC
Gateway
Modem
Transport
Services
Middleware
Viewing
IS
integration
Distribution
Smart machines Remote Server
• Electronic value chain
• Telecommunications value chain
• Computing value chain
• Value chain of the machines themselves
• 3 types of players
- Module manufacturers
- Communication providers
- Integrators

4. 4
• Sierra Wireless (including Sagemcom)
• Gemalto (including Cinterion)
• Telit
• SimCom
• Huawei
˃ Five major (cellular) players
Source: IDATE
M&A in the M2M module industry
The M2M hardware segment is experiencing
strong consolidation
• Market consolidation since 2007
- Gemalto, Sierra and Telit have multiplied their acquisitions
• Numerous Chinese players: Huawei, ZTE and SimCom
- Pressure on price
• 3G is coming (but 2G still the majority of total sales)
˃ Main trends
• SigFox
• Coronis
• Neul
⇒ Also connectivity providers
˃ Other technology providers
Acquirer Target (activity) Date
Telit ILS (cloud platform services) September
2013
Sierra Wireless Sagemcom (modules manufacturer) June 2012
Gemalto Sensor Logic (platform provider) December
2011
Telit Motorola M2M (modules manufacturer) March 2011
Novatel Wireless Enfora (modules manufacturer) Nov 2010
Gemalto Cinterion (modules manufacturer) June 2010
Sierra Wireless Wavecom Dec 2008
Telit (module maker) One RF Technologies (spectrum
technologies)
Nov 2008
Wavecom Anyware Technologies (software) Early 2008
Enfora TeleM2M (software) October 2007
Sierra Wireless AirLink (CDMA hardware) End-2007
Elster Coronis (hardware) 2007
Wavecom (module maker) Sony-Ericsson 2006

5. 5
• Millions of machines concerned
- Millions of SIM cards with data plan
• Limited churn
• Telco seen as leader on the M2M value chain
- End-to-end offering
• Low marketing costs
• Limited per M2M line (ancient technologies
sufficient)
˃ Business opportunities
Source: IDATE
Differentiation between traditional and M2M operations
M2M as an opportunity for Telcos ?
• (Very) Low ARPU (from 1 EUR/month/line)
• Vertical and adapted offering for typical user
- Compared to horizontal for a traditional user
• QoS introduction => expensive tools to
implement
• Monopsony situation (1 huge M2M client for
several MNOs)
• Communication revenues forecast to be very
limited
- 1.1% of their total mobile revenues in 2016
˃ … But some threats as well
Copyright © IDATE 2012

6. 6
• Customer benefits (costs savings)
- ROI
- Higher customer satisfaction
• Solutions mostly based on very mature
and well-deployed technologies (both
technical and economical interests)
- Internet
- SMS
- GPRS
• Public policies and regulations adopted
in some vertical markets
- eCall in automotive industry
- Smart grid
• Telco involvement in this market
- Credibility (financial and technical)
˃ Drivers
Drivers and barriers
• Cost is still a key issue
- High fixed costs (up-front costs)
• Education of the market
• Improvements requirement for
application
- Autonomy
- Network coverage
- Latency
• Privacy & security issues
- Threats from end-users
• M2M market fragmentation
- Numerous technologies and players
- Complexity in both technical integration and
supplier identification
˃ Barriers
Copyright © IDATE 2012

7. 7
• Multiple alliances for technical cooperation on
multinational contracts
- Potential shared platform usage for global RFPs
• New players arrival
- Value proposition meeting clients expectations for some
M2M applications
o Technical requirements
o Business requirements (low cost solution)
- SigFox, Neul, etc
• Towards SLA introduction
- Introduction of SLA constraints in M2M contracts
(requirement from M2M clients)
- QoS could be seen as VAS while ARPU is decreasing a lot
• Value is in the data management and storage
- How about the Internet of Things (open loop) ?
- Concerns about privacy?
o RFID threats on consumer side
• Discussions around embedded SIM (eSIM)
- Remote activation and provisioning over-the-air (OTA)
- Requirement from (global) M2M clients
o Technical improvements & logistics costs savings
- Ability to change the carrier over the air
Different alliances
Multiple trends impacting the M2M market : game
changers ?
SLA offering by Telenor
Source: IDATE
Source: Telenor
Copyright © IDATE 2012

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Copyright IDATE 2012, CS 94167, 34092 Montpellier Cedex 5, France
8
Samuel has been an IDATE Consultant since early 2007. His assignments specifically
involve technological expertise for connected devices, including RFID, the Internet of
Things and the smart grid. He is in charge of the M2M market at IDATE. His activities focus
on both technological and marketing innovation.
Before coming to IDATE, Samuel worked as a consultant for NPA Conseil (a French media
consulting company). He focused on the new TV technologies (IPTV, HDTV, VOD and
mobile TV). Prior to this, Samuel worked for TV Breizh (TF1 Group) as a technical video
assistant where he specialized in video transmission (contribution side) by satellite.
Samuel graduated from the French engineering school Ecole Nationale Supérieure des
Télécommunications de Bretagne. He also holds a master’s degree in Physics and in
Politics from Sciences-Po Rennes.
s.ropert@idate.org
Read more on our blog :
The enormous growth of Internet of Things, 80 Billion things connected in 2020
Samuel ROPERT, Senior Consultant
DigiWorld by IDATE M2M Lead expert

9. 9
Who we are
• Since 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and
media markets, thanks to the skills of our teams of specialized analysts.
• Now, with the support of close to 40 member companies – which include many of the digital
economy’s most influential players – the newly rebranded DigiWorld Institute has entered into
a new stage of its development, structured around three main areas of activity:
• Time-tested analysis and consultancy Our expertise and client list > Consulting
• An independent observatory Our catalogue of reports > Research
• A European forum open on the world Our annual programme > DigiWorld Institute
Copyright © IDATE 2013

10. 9
Who we are
• Since 1977, IDATE has gained a reputation as a leader in tracking telecom, Internet and
media markets, thanks to the skills of our teams of specialized analysts.
• Now, with the support of close to 40 member companies – which include many of the digital
economy’s most influential players – the newly rebranded DigiWorld Institute has entered into
a new stage of its development, structured around three main areas of activity:
• Time-tested analysis and consultancy Our expertise and client list > Consulting
• An independent observatory Our catalogue of reports > Research
• A European forum open on the world Our annual programme > DigiWorld Institute
Copyright © IDATE 2013