M2M device connections will increase twentyfold worldwide in the next ten years, Analysys Mason reports

More than 2 billion devices to be connected worldwide by 2021, with the industry set to grow at a CAGR of up to 50% in some sectors.

A new report from Analysys Mason predicts that machine-to-machine (M2M) device connections worldwide will grow by a factor of 20 in the next ten years, from 100.4 million to 2.1 billion. Revenue associated with M2M connectivity will also increase dramatically over the same period, from USD5.7 billion in 2011 to USD50.9 billion in 2021.

The report, M2M device connections, revenue and ARPU: worldwide forecast 2011–2021, presents the annual update of Analysys Mason’s M2M device connections forecast, which includes detailed ten-year forecasts of connections, revenue and average revenue per user (ARPU) for 7 sectors and 20 M2M applications, in 8 geographical regions worldwide.

The report predicts that ARPU rates generated by M2M connectivity will decline markedly throughout the next decade, from a worldwide average of USD4.71 per month per connection to just USD1.98 in 2021.

“This per connection revenue decline will be caused by increasing price pressure and growth in the number of M2M device connections in emerging markets,” explained Steve Hilton, lead author of the report and Principal Analyst of Analysys Mason’s Enterprise and SME Strategies research programmes. “ARPU rates for M2M applications are generally lower in emerging markets than in developed markets.”

According to the report, the share of worldwide connections attributed to developed markets will decline over the next decade, from 69% in 2011 to 59% in 2021. Similarly, developed markets’ share of worldwide revenue will have declined from its current level of 76% to 64% in 2021.

In 2011, slightly less than 20% of M2M connections were over fixed-line networks, and it is predicted that this figure will decrease to just 7% by 2021. According to the report, almost all fixed-line M2M solutions are in developed countries, because reliable, affordable fixed-line connectivity is difficult to purchase in emerging markets.

“However, mobile operators in developed markets are offering mobile connectivity at attractive prices, and most M2M solutions have fairly low bandwidth requirements. As a result, more and more enterprises are choosing mobile M2M rather than fixed-line M2M,” added Hilton.

Other headlines from the report include:

  • utility sector solutions will account for 61% of worldwide M2M device connections by 2021, growing at a compound annual growth rate (CAGR) of 50%
  • the penetration of M2M connections as a percentage of overall population in developed markets is 5% in 2011, but this is predicted to grow to 86% by 2021
  • the automotive and transport sector will have the highest share of connectivity-related revenue by 2021 (43%), driven by the increasing adoption of consumer connected car solutions.

M2M device connections, revenue and ARPU: worldwide forecast 2011–2021 is available for purchase as a standalone report for USD7999 via our online store at www.analysysmason.com/M2M2012, or as part of a subscription to Analysys Mason’s Enterprise and SME Strategies research programmes. For more information, contact us at research@analysysmason.com.

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