ABI: 3G Cellular to Capture 30% of M2M Market
June 22, 2007 // Published as a news service by IHS
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Cellular machine-to-machine (M2M) communications first started in the era of analog cellular connectivity, but have now largely shifted to second generation (2G) general packet radio service (GPRS) and code division multiple access (CDMA) connectivity.
According to ABI Research, certain M2M applications can benefit from the higher data rates over what 2G cellular offers, and it is tempting to assume that all M2M communications will be third generation (3G) eventually.
Analysts said 3G modules will achieve only a 30% penetration of the M2M market by 2012, however, and will become the technology of choice only where bandwidth demands and economics dictate. "Future-proofing" will play a smaller role in 3G M2M market development over the next five years.
"Municipal Wi-Fi and WiMAX (worldwide interoperability for microwave access) will both challenge 3G cellular technology as the most suitable methods to achieve high-speed M2M communications for many applications and in many locales," said Sam Lucero, ABI Research senior analyst of M2M and wireless connectivity.
High-speed wireless M2M will find its natural uses where the need for high bandwidth outweighs the added cost, analysts said. These include:
- Fixed-wireless terminals that use cellular backhaul.
- Multimedia content delivery to point-of-sale (POS) terminals, such as digital marketing displays.
- High-speed telematics connectivity, including real-time navigation information.
- Remote information displays, used in digital mobile advertising, for example.
- Video surveillance, where wireless closed circuit TV (CCTV) backhaul permits camera deployment without the need for cabled connections at each location.
In addition to the added cost of 3G modules, Lucero said wireless network coverage is an issue. "Some think that cellular networks will eventually be all 3G. But ABI Research does not believe that is practical, in terms of cost and power consumption, for all operators in all geographical areas," he said.
"WiMAX and, especially, municipal Wi-Fi offer attractive alternatives to CDMA 1xEV-DO (one times evolution-data optimized) or HSDPA (high-speed downlink packet access) 3G technologies for wide area wireless M2M," said Lucero.
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"They are both more cost-effective and operationally efficient. With backing by Intel, as well as key carriers worldwide, WiMAX and municipal Wi-Fi will feature as important high speed wireless M2M networks in the coming years."
Source: ABI Research.