The North American Wireless M2M Market

The North American Wireless M2M Market

M2M is an abbreviation for machine-to-machine, or technology that supports wired or wireless communication between devices. Virtually any communication network may accommodate M2M applications. Fixed-line networks are viable for monitoring fixed assets, whereas wireless networks may be used under all circumstances even though they are required for mobile assets. North America has a great diversity of licensed and unlicensed wireless network technologies. Cellular wireless – the focal technology family of this report – is only one of numerous wireless options available for M2M solution developers. These range from satellite communication to technologies utilizing unlicensed radio frequencies. Also the cellular domain itself is perhaps more fragmented in North America than anywhere else in the world. Parallel GSM/GPRS/EDGE, CDMA and iDEN networks cover most of the population on the continent. HSDPA, EVDO, WiFi-hotspots and soon also mobile WiMAX provide high speed Internet connectivity in urban centers. Older technologies such as AMPS/TDMA and Mobitex are gradually fading away, if only to make way for more newcomers.
The North American wireless M2M market is in a transitional stage where analogue wireless technologies disappear at the same time as the growth for digital wireless M2M is accelerating. Berg Insight estimates that shipments of cellular and satellite wireless M2M devices in North America reached a record level of 5.3 million units in 2006. Growing at a compound average annual growth rate of 27.3 percent, the market size is expected to reach 22.6 million units by 2011. Private vehicles will remain the overwhelmingly largest segment, underpinned by mass-market OEM telematics offerings from GM and other auto manufacturers. Steady growth is also expected in the commercial vehicles and energy meters segments. Shipments of energy meters with cellular capabilities are expected to accelerate at the end of the period due to large scale deployments of AMI. Demand in the security alarms and POS-terminal segments is expected to peak in 2007 due to replacement of analogue technologies.

Two vertical market segments stand out as those with the overwhelmingly largest potential for wireless M2M – utility meters and motor vehicles. North America has about 256 million motor vehicles and 217 million electricity and gas meters. Motor vehicles require wireless communication links, whereas fixed line and non-cellular wireless are potent alternatives for utility meters. Other segments with more limited potential include security alarms and POSterminals.
There are about 32 million monitored alarm systems in North America and the population of POS-terminals is estimated to 15 million. Both types of devices are today predominantly connected to fixed line networks. In the case of security alarms, cellular networks can serve a vital role as backup communication links. POS-terminals become more versatile with cellular connectivity and in some cases dedicated fixed lines can be replaced by cellular connections also at fixed locations.
Apart from standardized high volume devices, whether it be utility meters and car telematics units or security alarms and POS-terminals, there is also a sizable market for general purpose cellular M2M modems and terminals. Those are frequently sold through the distribution channel to system integrators who develop tailored wireless M2M solutions on behalf of enterprise clients. This market segment is still relatively important, but is increasingly being diminished by the high volumes achieved for standardized solutions.
Several categories of network operators and other service providers offer wireless M2M communication services on the North American market. The nationwide cellular network operators mainly service the M2M market through indirect sales channels and major customer accounts. In their place, a number of cellular M2M communication service providers have emerged. These include Aeris, Jasper Wireless, KORE Telematics and Numerex.
Furthermore there are several non-cellular communication providers like SkyTel and Orbcomm offering solutions based on technologies such as paging and satellite networks.

Executive summary.....................................................................................................................1

1 Introduction to wireless M2M and the North American market...........................................3
1.1 Introduction..................................................................................................................3
1.1.1 From telemetry to M2M.........................................................................................3
1.1.2 Industry value network ..........................................................................................4
1.2 Key vertical market segments .....................................................................................6
1.2.1 Motor vehicles .......................................................................................................6
1.2.2 Electricity and gas meters.....................................................................................7
1.2.3 Other segments.....................................................................................................7
1.3 Wireless M2M communication technologies...............................................................8
1.3.1 Cellular networks...................................................................................................8
1.3.2 Mobile Satellite Service (MSS)............................................................................10
1.3.3 Unlicensed frequencies.......................................................................................11
1.4 Cellular M2M data modules and terminals................................................................11
1.4.1 Cellular M2M communication devices ................................................................12
1.4.2 Cellular M2M device vendors..............................................................................14

2 Network operators and MVNOs.........................................................................................17
2.1 Cellular network operators ........................................................................................17
2.1.1 AT&T....................................................................................................................17
2.1.2 Verizon Wireless..................................................................................................18
2.1.3 Sprint Nextel ........................................................................................................18
2.1.4 T-Mobile USA ......................................................................................................19
2.1.5 Second tier US cellular network operators .........................................................19
2.1.6 Canadian cellular network operators ..................................................................20
2.2 Cellular M2M communication providers....................................................................21
2.2.1 Aeris.....................................................................................................................21
2.2.2 CrossBridge Solutions ........................................................................................22
2.2.3 Jasper Wireless ...................................................................................................22
2.2.4 KORE Telematics ................................................................................................23
2.2.5 Numerex ..............................................................................................................24
2.2.6 Wyless .................................................................................................................25
2.3 Non-cellular M2M communication providers ............................................................26
2.3.1 Inmarsat...............................................................................................................26
2.3.2 Orbcomm ............................................................................................................26
2.3.3 SkyTel..................................................................................................................28

3 Market forecasts and trends ..............................................................................................29
3.1 North American wireless M2M market summary ......................................................29
3.2 Private vehicles..........................................................................................................32
3.3 Commercial vehicles .................................................................................................33
3.4 Electricity and gas meters .........................................................................................35
3.5 Security alarms..........................................................................................................36
3.6 POS-terminals............................................................................................................38

4 Private vehicles ..................................................................................................................39
4.1 The North American private vehicle market ..............................................................39
4.2 Car telematics solutions ............................................................................................41
4.2.1 Car telematics applications .................................................................................42
4.2.2 Car telematics infrastructure ...............................................................................43
4.2.3 Car telematics value chain and stakeholders .....................................................45
4.3 Key player profiles .....................................................................................................46
4.3.1 ATX Group...........................................................................................................46
4.3.2 Cross Country .....................................................................................................47
4.3.3 Hughes Telematics..............................................................................................47
4.3.4 Inilex ....................................................................................................................48
4.3.5 LoJack .................................................................................................................48
4.3.6 OnStar .................................................................................................................49
4.3.7 PassTime.............................................................................................................50
4.3.8 WebTech Wireless...............................................................................................51
4.3.9 WorldScout..........................................................................................................52
4.4 Automobile manufacturer telematics strategies ........................................................52
4.4.1 GM.......................................................................................................................52
4.4.2 Ford .....................................................................................................................55
4.4.3 Toyota..................................................................................................................56
4.4.4 Daimler Chrysler..................................................................................................57
4.4.5 BMW....................................................................................................................59

5 Commercial vehicles..........................................................................................................61
5.1 The North American commercial vehicle market ......................................................61
5.2 Fleet management solutions .....................................................................................63
5.2.1 Fleet management applications..........................................................................63
5.2.2 Fleet management infrastructure ........................................................................64
5.2.3 Fleet management value chain and stakeholders ..............................................67
5.3 Key player profiles .....................................................................................................68
5.3.1 @Road ................................................................................................................68
5.3.2 AirIQ.....................................................................................................................69
5.3.3 Ayantra ................................................................................................................70
5.3.4 Discrete Wireless.................................................................................................70
5.3.5 Fleetilla ................................................................................................................71
5.3.6 General Electric ...................................................................................................71
5.3.7 Grey Island ..........................................................................................................72
5.3.8 Networkcar ..........................................................................................................72
5.3.9 PeopleNet............................................................................................................73
5.3.10 Qualcomm WBS..................................................................................................73
5.3.11 SkyBitz.................................................................................................................74
5.3.12 Teletrac................................................................................................................75
5.3.13 TomTom WORK ..................................................................................................75
5.3.14 Tripmaster ...........................................................................................................76
5.3.15 Wireless Matrix ....................................................................................................76
5.4 OEM commercial vehicle telematics solutions..........................................................77
5.4.1 Ford .....................................................................................................................77
5.4.2 Navistar International...........................................................................................77
5.4.3 Volvo Trucks........................................................................................................78

6 Electricity and gas meters .................................................................................................81
6.1 The North American utility industry ...........................................................................81
6.1.1 US electricity and gas market .............................................................................81
6.1.2 Canada electricity and gas markets....................................................................86
6.1.3 North American utility industry players ...............................................................87
6.2 AMI solutions .............................................................................................................91
6.2.1 AMI applications..................................................................................................91
6.2.2 Advanced metering infrastructure.......................................................................93
6.2.3 AMI value chain and stakeholders ......................................................................95
6.3 Key player profiles .....................................................................................................96
6.3.1 Bayard Group......................................................................................................96
6.3.2 Elster....................................................................................................................97
6.3.3 Itron .....................................................................................................................97
6.3.4 Sensus Metering Systems...................................................................................98
6.3.5 Comverge............................................................................................................99
6.3.6 CURRENT Communications ...............................................................................99
6.3.7 DCSI ....................................................................................................................99
6.3.8 Echelon .............................................................................................................100
6.3.9 eMeter................................................................................................................100
6.3.10 Olameter............................................................................................................101
6.3.11 SmartSynch.......................................................................................................101
6.3.12 Tantalus.............................................................................................................101
6.3.13 Trilliant Networks...............................................................................................102
6.4 AMI deployments in the US and Canada ................................................................102
6.4.1 Pacific Gas & Electric ........................................................................................103
6.4.2 PECO.................................................................................................................104
6.4.3 PPL Electric .......................................................................................................105
6.4.4 TXU....................................................................................................................105
6.4.5 Hydro One.........................................................................................................106

7 Security alarms ................................................................................................................109
7.1 The North American security alarm market.............................................................109
7.2 Cellular alarm monitoring solutions.........................................................................110
7.3 Key player profiles ...................................................................................................111
7.3.1 ADT....................................................................................................................111
7.3.2 Brinks.................................................................................................................112
7.3.3 Protection One ..................................................................................................112
7.3.4 Monitronics........................................................................................................113
7.3.5 HSM...................................................................................................................113
7.3.6 Alarm.com .........................................................................................................113
7.3.7 AES IntelliNet.....................................................................................................114
7.3.8 Honeywell Security & Custom Electronics........................................................114
7.3.9 Telular................................................................................................................114
7.4 Impacts of the FCC Sunset Clause .........................................................................115

8 POS-terminals..................................................................................................................117
8.1 The North American POS-terminal market ..............................................................117
8.2 POS-terminal payment transactions........................................................................118
8.3 Key player profiles ...................................................................................................119
8.3.1 VeriFone ............................................................................................................119
8.3.2 Ingenico.............................................................................................................120
8.3.3 Hypercom..........................................................................................................120
8.3.4 Thales................................................................................................................121
8.3.5 ExaDigm............................................................................................................121
8.3.6 Linkpoint............................................................................................................121
8.4 Secure cellular POS-terminal transactions infrastructure........................................122
8.4.1 Apriva SecurePOS.............................................................................................122
8.4.2 Transition from analogue to digital networks....................................................123

Glossary ..125