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Differences in Global M2M Market Dynamics

Global markets for cellular machine-to-machine (M2M) modules will experience a smooth and solid growth trajectory in coming years, according to a new ABI Research study.

The compound annual growth rate during the forecast period between 2006 and 2012 is expected to reach 31 percent. Although cellular M2M module shipment numbers in the world's three main industrialized regions -- North America (including Mexico), Europe, and Asia-Pacific are approximately equal at present, these markets differ significantly from each other in character.

ABI Research senior analyst Sam Lucero says, "North America is a significant cellular M2M market that differs from the other regional markets in three key respects: the prevalence of CDMA air-interface technology; the significant share of the market comprised of OEM telematics; and the rigorous, expensive, and time-consuming certification process required by the four main North American mobile network operators."

Europe is still considered to be the most advanced wireless market, Lucero says, in terms of its sophistication and openness to M2M, with technologies crossing a range of applications. Western Europe benefits from the ubiquity of GSM/GPRS technology, which helps promote adoption.

Eastern Europe is at an earlier stage of market development, and module vendors describe it as being more price-sensitive than the west, where a greater premium is placed on features, functionality, and reliability.

On a unit shipment basis, Asia-Pacific is the largest market, but it's characterized by a fragmented assortment of air standards, and a majority of those shipments are actually for wireless local loop (WLL) applications.

"Wireless local loop is something of a gray area within M2M," notes ABI's Lucero, "because, unlike telemetry or telematics applications, WLL is centered more on enabling standard fixed voice and data communications over cellular infrastructure. That does form the largest share of the market in the Asia-Pacific region."

This diversity of market characteristics is mirrored in the strategies, strengths and weakness of module vendors. Many are global players, but have taken very different paths to address regional mobile phone service provider markets.

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