A lack of standards in M2M have been repeatedly flagged up a key barrier driving the M2M market forwards. Over the last few years, various Standard Development Organisations (SDOs) have been working on unifying initiatives to help drive the M2M market forward.

On 24th July 2012, a number of global standards bodies (ARIB, ATIS, CCSA, ETSI, TIA, TTA, and TTC) signed a definitive agreement to provide a common, efficient and widely available M2M Service Layer, which can be readily embedded within various hardware and software. The goal is to generate cooperative M2M community standards, which will lead to regularly enhanced releases of the M2M Service Layer specifications, known as oneM2M.

The first job of the standards body will be to create two groups along the framework of the timeline shown here:

1.     A Steering Committee to approve scope and direction and work of the Technical Plenary and manages overall process and oversight of issues.

2.    A  Technical Plenary divided into a number of working groups to define the technical scope of various aspects of the M2M service layer e.g. common security framework.

There is clearly a benefit to developing a framework of agreed global standards that will benefit end-users, equipment providers, service providers, standard development organizations and others. 

In theory it will help develop a set of standards that will allow devices to communicate with middleware across multiple geographies and industries, from the smart grid and smart home, to vehicles and healthcare. 

The oneM2M Timeline 

Source: oneM2M

Verizon’s planned acquisition of major telematics provider Hughes Telematics is indicative of the continued shift in the M2M value chain as providers look to increase their capabilities to deliver value added services. Typically, carriers prefer to partner in vertical M2M segments rather than acquiring system integrators or value-added resellers. However, where there is a major opportunity in a particular segment, Tier 1 carriers will acquire additional expertise, IP and consequently customers to build on their connectivity and wholesale M2M services. Many Tier 1 carriers also have enterprise managed services capabilities and adding value added service providers in a specific segment can get them closer to offering an end-to-end solution.

In January, Verizon acquired the remaining 50% of nPhase, its joint venture for the M2M business it formed with Qualcomm in 2009/ nPhase provisioning and back-end M2M systems combined with Verizon's sales force and distribution channel was envisaged as making it easier and faster for companies to get their M2M devices running on Verizon's network.

With the acquisition of Hughes, Verizon gains access to OEM telematics, as well as fully fledged M2M fleet and mHealth solutions through two Hughes subsidiaries:

1) Networkfleet, Inc. offers remote vehicle diagnostics, GPS tracking and emissions monitoring system for wireless fleet vehicle management

2) Lifecomm offers mobile personal emergency response services through wearable lightweight device with one-touch access to emergency assistance.

Verizon is stating its firm intention to compete aggressively in the M2M market and this will reinforce Verizon’s leadership position in the North American telematics market. Nevertheless, the M2M landscape will remain very competitive. AT&T remains very strong and Sprint has carved out a market in smart metering and utilities.

What is certain is that 2012 will continue to be an exciting year in the M2M market with more mergers and acquisitions to come!

Today's news that Verizon has purchased Hughes Telematics business for a reported $612M is just the latest example of consolidation in the M2M market as noted by our M2M service.

In our February 2012 insight we predicted that ?2012 will represent a year of major change, as consolidation among various players in the M2M value chain continues and mobile operators look to move up the value chain through creation or extension of M2M service platforms. Fragmentation issues will be more readily addressed in 2012 but there is still a long way to go.

The opportunity in M2M is huge. How huge, well somewhere between our conservative 5B+ connections and more bullish 50B from other sources out there.

We have already seen significant consolidation with operators like Deutsche Telekom looking to expand and enhance their position for the next big thing.. the Internet of Things. Now Verizon for a modest sum is beefing up its enterprise solutions assets. Several other examples include: AT&T extending its position in M2M application development with a U.S. reseller agreement with Axeda Corporation, an exclusive among major U.S. mobile carriers. The AT&T M2M Application Platform Powered by Axeda is designed to streamline the development of M2M applications to enable more rapid deployments at lower cost. Verizon acquiring the remaining 50% of nPhase, its joint venture for the M2M business it formed with Qualcomm in 2009 nPhase provisioning and back-end M2M systems combined with Verizon's sales force and distribution channel was envisaged as making it easier and faster for companies to get their M2M devices running on Verizon's network.

2012 will be a transition year that sees large SIs start to look more seriously at very large projects in the M2M market.

Significant consolidation has already happened among module makers and the next phase of market development is likely to be more consolidation but also expanded partnerships.

Strategy Analytics believes that carriers are well placed to offer developer toolkits and also be a forum for developers to share information and knowledge, as well as potentially creating opportunities to aggregate and showcase developer applications.

Client Reading

View the presentation slides from Strategy Analytics Breakfast Presentation at MWC 2012.

What are the opportunities and obstacles for the mobile industry as it expands to a world of connected devices and applications which provide new levels of convenience and automation?

What are the prospects for NFC and what role might carriers take?

Will M Health live up to current exponential growth forecasts, and which parties will benefit most in the value chain?

How will wireless enabled processes be captured in connected homes and vehicles of the future?

Client Reading

It?s been a busy week for miniaturization in the in the world of SIM cards and M2M modules. M2M module makers and SIM card players are either joining forces (Gemalto and Cinterion) or in competition, to go after lucrative new markets.

• At the CARTES & IDentification 2011 trade show in Paris, Giesecke & Devrient (G&D) announced the smallest SIM card: the nano-SIM. A third smaller than the micro-SIM, the nano-SIM is only 12mm x 9mm and about 30 percent smaller than the micro-SIM and while it still needs to be tested with mobile operators and approved by ETSI, it could be finding its way into the first mobile devices as early as next year
• In addition, Sierra Wireless also broke new ground this week by announcing the new AirPrime WS6318 which provides M2M connectivity in a module just 15mmx18 mm, roughly half the size of most M2M modules currently. This new module is among the first cellular modules in the industry to use conformal coating technology. Instead of relying on metal shielding to protect chip sets and circuit boards, the module is coated with a protective chemical barrier. By removing metal enclosures it is possible to deliver a much smaller wireless module while fully protecting sensitive electrical components

Even though these are impressive technological breakthroughs, given our knowledge of Moore?s law, this isn?t perhaps so surprising. So the question is, why should you care?

• Miniaturization is a catalyst for the connected world. Previously, bold design ideas have continued to bump up against the size limitations of cellular modules which has been a barrier to applications, especially in the M2M world. With the growth in M2M service platforms that enable provisioning and management of devices, it is now in the hands of SIM card makers and module vendors to enable the last mile connectivity in as small a package as possible.
• Most mobile carriers are reluctant to pursue the soft-SIM approach, given that the SIM card is the MNO network presence in the device. There is a strong feeling that this function should be preserved, even if it is made interoperable with other carriers (for example Deutsche Telekom, Telef?nica O2 UK, Vodafone and Giesecke & Devrient  (G&D) have worked together to prepare for the standardization of a trusted and flexible solution for the remote management of embedded SIMs
• Miniaturization opens up new markets. Irrespective of whether version 5 or 6 of the next gen iPhone has a nano-SIM, or even the fact that there are already cellular watches, the broader issue is how miniaturization opens up new markets. Examples include enabling healthcare by embedding health monitoring and wireless communication capabilities into a small watch or wristband, a health application provider could extend its service to customers that would be unwilling to wear a bulky monitoring device. It may also create impetus in the sport and fitness equipment market, even to the extent of embedding into clothing or footwear. Payment (POS) terminals can be reduced in size in tandem with a growth in NFC services. The potential reach for miniature modules and SIMs is vast.
• As miniaturization enables new markets, it will drive economies of scale, driving down the price and truly enabling a world of connected objects even in relatively low cost equipment.

Although the initial growth will be limited to certain markets given the need for a small form factor and higher costs, the longer term possibilities are broad and limited only by the the imagination of solutions architects.

Andrew Brown