The wireless industry could eke out a $1.2 trillion revenue opportunity out of the connected devices market by 2020, according to Machina Research.
Within this market, the machine-to-machine
(M2M) business is instrumental in enabling communications across wider "horizontal" platforms in several key sectors, particularly intelligent buildings.
Security applications will drive early growth in this sector, but the nascent building automation market will contribute significantly towards the end of the forecast period.
M2M connectivity also underpins the Smart City concept, which enables city infrastructure and assets to be monitored and controlled remotely and is instrumental in driving cost efficiencies and creating new value.
Based on new research commissioned by Global Information, the M2M market in intelligent buildings will grow at a CAGR of 17% to $214 billion 2020 from $52 billion in 2011.
At present security is the largest M2M application group, generating 60% of total revenue. The fastest growing sector in terms of revenue is building automation, which will grow at a CAGR of 50% to reach $63 billion by 2020.
Once the market has taken off, significant opportunities for the management, mining and presentation of the information associated with an individual's constellation of connected devices will emerge. Mobile operators will be particularly well placed for this kind of opportunity.
Smart City projects are by nature large and complex and there are no "one size fits all" solutions. They require the expertise of a number of industry players; hence there are substantial opportunities for vendors, systems integrators and fixed and mobile network operators in this market and more importantly partnerships between players.
Finally, the utilities M2M sector will grow in the next few years from 140 million connections at the end of 2011 to 1.5 billion in 2020. Smart metering is the dominant applications, which will account for the lion's share of traffic over the period, going from 80% in 2011 to 95%.
The main driver for M2M connectivity in the utilities sector comes from government
. As for MNOs, they must get involved in device and service management if they are to secure a significant portion of the $300 billion that will be generated by the sector between 2011 and 2020.