The Business of M2M

Machine-to-Masses

May/June 2009

Much of the buzz at this year’s spring CTIA show was about the new wireless products and services that will fill the vast mobile data capacity that LTE (long-term evolution) and WiMAX networks will soon provide. It reminded me of the CTIA shows from 2000-2002 when mobile packet data networks were launched in the U.S. Everyone was searching for the killer app, walled gardens were blossoming, and converged devices ruled the roadmap. Then, as now, we were racing to launch new data services and devices that would transform our network capacity into engaging mobile data experiences and recurring revenues.

Mass-market wireless devices tailored to dozens of consumer needs are in development now, and will provide engaging new entertainment choices plus tools to manage health, wealth, relationships, and the home. These connected consumer devices fall outside of the industrial and transportation verticals where M2M has typically flourished, and M2M companies will need to shift their focus to capitalize on the opportunity. Instead of seeing M2M as a tool for product lifecycle management, consider these examples of “personal lifecycle management.”

Mobile medical, fitness, and health devices are multiplying rapidly, bolstering the vision shared by Dr. Eric Topol from Scripps Research Institute, www.scripps.edu, La Jolla, Calif., that wireless will revolutionize medicine. New medical and health tools unveiled at the show include “smart bandages” to discreetly monitor cardiac function, wireless medical charts, numerous iPhone health apps, and GPS (global positioning system) for Alzheimer’s patients.

Amazon’s Kindle, which is a software and hardware platform for reading electronic books, set the mobile entertainment category on fire with its “invisible” wireless service plan. Most see the Kindle’s bundled service plan as a model for wireless consumer products. Cellular-enabled game consoles, connected video set-top boxes, and streaming video entertainment appliances will propel growth in the wireless entertainment segment.

Personal and home security products and consumer telematics also continue to grow, as consumer awareness rises and prices fall into the mass-market range. Cellular-enabled and Web-enabled trackers for kids, pets, and personal assets are increasing, as are services that allow parents to track their teens’ driving patterns.

Lastly, digital out of home advertising is exploding. ABI Research, www.abiresearch.com, Oyster Bay, N.Y., projects 33% growth for digital signage this year, though insiders report the segment is feeling the decline in overall ad revenues and consolidation is likely. Digital out of home solutions include those video displays popping up at your doctor’s office or local Wal-Mart, plus digital billboards, interactive mall floor ads, and oodles of other of high-tech stuff. Wirelessly enabling these displays will significantly lower their installation cost, add redundancy to the provider’s network, and expand locations for this channel.

The exploding connected consumer device market presents an opportunity that M2M companies cannot afford to ignore. M2M players have what it takes, when it comes to connected devices and the services that talk to them: relationships with value-chain members that can speed new mobile devices to market and experience building profitable businesses based on low per-unit revenue streams.

Keep an eye out for how the M2M industry responds, and what hot new consumer offerings result from their efforts. Look for M2M players taking one or more of these paths:

  • Repurposing existing products and services for consumers. Telematics and home security services are naturals, and others lurk in M2M provider catalogs. Watch for partnerships targeted to product redesign, repackaging, and distribution.
  • Partnering with big non-wireless brands for mobility.
  • Marketing their backoffice platforms. The platforms many M2M companies have built to support their devices and services could be put to work for others. Expect these companies to license their platform or host it as a service provider—revised as needed under a cost or revenue sharing agreement. Device management and timely customer service are always tricky: bulletproof service platforms could save new entrants time, money, and customers.
  • Launching targeted, narrow-use devices. Keep an eye on popular apps at the iPhone and other app stores that may be better served with a dedicated device.

Laurie Lamberth is a wireless strategy, business development, and marketing consultant, with a specialty in M2M. She can be reached at laurie.lamberth@gmail.com.

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By | 2015-06-23T17:27:38+00:00 4/30/2009|

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