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Upside Opportunity for M2M Reaches $35B by 2016

The M2M market has become a fully mainstream segment of the mobile network service provider industry. By the end of 2011, most major mobile operators in North America, Europe, and the Asia-Pacific region had established M2M business units to focus their efforts in this fast growing market.

According to the latest market study by ABI Research, the market for cumulative cellular M2M connections will rise from about 110 million connections in 2011 to approximately 365 million connections by 2016.

This increase represents a compounded annual growth rate of about 27 percent by 2016 -- and translates to about $35 billion in connectivity services revenue.

The two largest cellular M2M market segments over the forecast period, by revenue, will be automotive telematics and smart energy.

Automotive telematics, including factory-installed systems such as GM’s OnStar service, aftermarket services such as usage-based insurance, and fleet management systems, will together represent more than $15.5 billion in 2016.

Meanwhile, smart energy, specifically cellular connectivity to smart meters and data concentrators, will represent more than $7.5 billion in 2016.

"As mobile operators further develop their M2M service offerings, software platforms and M2M application developer support will feature as increasingly larger components of the operators’ services," says Sam Lucero, practice director, M2M connectivity at ABI Research.

For example, AT&T announced on January 9, 2012 that it would be reselling Axeda’s M2M application platform in a U.S. carrier exclusive deal. This platform will enable AT&T customers to more easily develop and deploy complex M2M applications.

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