IDATE just releases the first edition of its market report providing its readers with an analysis of the M2M market that is currently changing shape, assessing the key technologies to accelerate such a development of this promising market, along with an examination of the positioning of the top players, the key issues to be addressed and market forecasts up to 2015 by geographical area and by type of market.
M2M is a growing segment for the satellite industry, although satellite still has only a small share of the machine-to-machine market which is largely dominated by cellular systems: around 2% in terms of volume and 6% of revenue in 2011.
For most operators, M2M is still very much a niche market, but everything points to real growth potential for these applications.
Maxime BAUDRY, project manager of this study and IDATE’s head of the satellite practice insists:
“While it is sectors like fleet management and maritime security that have driven the sector’s development up to now, new markets have been emerging over the past several years, especially in the area of energy, but also in the homeland security/military arena.”
Satellite M2M market growth/disruptive factors
There are several factors driving the growth of satellite M2M applications, starting with:
- Clear assets in terms of coverage: once classic and low-cost wireless solutions (chiefly GSM and 3G) are no longer available, satellite becomes the only possible solution for M2M applications. This is especially true of vast desert areas, and of oceans where demand for M2M solutions is high: for tracking fishing vessels, dangerous cargo, monitoring offshore wind farms, etc.
- Tremendous increase in applications requiring M2M. Examples here include smarts grids in the area of energy, tracking shipments – whether on land, sea or in the air – and for the military which are heavy users of M2M applications for tracking combat assets, in addition to having the means to pay for very high-end and so very expensive products.
- Complementary nature of terrestrial and satellite networks to deliver M2M links end-to-end. Manufacturers have been innovating over the past several years by rolling out hybrid equipment which is being used more and more by operators. Orbcomm was a pioneer in this field, and was then followed by players such as Iridium and Inmarsat.
- Stricter regulation. Recent developments in maritime regulation, notably the adoption of stricter regulations over monitoring commercial vessels, have been beneficial to satellite which is the only possible solution for this type of application outside of coastal areas.
Current satellite M2M market estimates
The satellite M2M market still represents only a small fraction of satellite services revenue. In the satellite M2M market came to 1.5 billion USD while the Satellite Industry Association (SIA) puts the entire satellite services market at an estimated 101 billion USD – giving M2M a 1.5% share of the market. IDATE estimates for 2011 indicate that this share will increase to 1.6%. The number of M2M modules in services stood at 1.3 million units in 2010.
The global satellite M2M market is forecast to reach 2.3 billion EUR in 2016. The highest rate of increase will be in the Asia-Pacific region thanks to developments in countries such as China, Indonesia, Vietnam and India.