General Electric just paid $230 million for Attenti, an Israeli company that makes people-tracking devices for criminal offenders and Alzheimer’s patients. It was only a matter of time before the big guns realized the wide-open opportunity that exists in M2M. M2M is a segment fed from the top by big chipmakers, but otherwise populated by a big crop of small companies and severable business units of big ones. (Examples of “severable” include Kyocera’s decision to disband its M2M business unit last year and Siemens’ 2008 spin-out of Cinterion, since acquired by Gemalto.)
Together with the mobile operators, the M2M value chain is chasing one of the fastest-growing consumer markets of all time. This value chain has built a multi-billion dollar global industry, and connected consumer devices will propel 25%+ growth in the segment for some time. New technologies such as the iPhone and Twitter are deteriorating barriers to entry (MIT uses Twitter to collect device status information), and all-IP networks will erode barriers even further as connected devices become managed assets within a network rather than “phones” activated through mobile operator switches.
The existing M2M value chain stands to get run over, unless they position themselves to partner with or be acquired by large consumer-facing brands. Some companies in the space are more ready than others to play with the big boys. Now is the time for M2M companies to tighten down their product set and make sure their management team is up to the task. Expect to see more big players entering the game, soon.