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Satellite Machine-to-Machine (M2M) Market Study
Frost & Sullivan, March 2008, Pages: 40
This Frost & Sullivan research service titled Satellite Machine-to-Machine (M2M) Market Study provides a detailed analysis of the market drivers and restraints, global revenue and subscriber forecasts, and current market share data. Also included is a company-specific product analysis, including estimates for equipment prices and monthly ARPUs. In addition, there are subscriber growth forecasts for each major satellite market participant including Iridium, Inmarsat Standard C, Satamatics, SkyWave, Globalstar, Qualcomm Omnitracs, Orbcomm, Skybitz, Wireless Matrix, and Thuraya.
Market Overview
New and Innovative Applications Driving Revenue Growth and Subscriber Numbers
The global satellite machine-to-machine (M2M) market is experiencing robust growth as companies are continually seeking out ways to raise productivity while reducing costs. M2M communications can be used in an endless number of ways ranging from logistical tracking, telemetry, remote monitoring, geo fencing, security, scientific monitoring and many others. This provides an enormous target market size, as industries ranging from agriculture to retail are beginning to make use of M2M communications and are continuing to find new ways to benefit from the technology. This is expected to be the single largest market driver for the satellite M2M industry over the next few years.
However, satellite communications still suffer from a lack of understanding and awareness, leading to negative perception among many IT departments. 'When industries that are not traditionally familiar with communications technologies, such as agriculture, retail, transportation, etc. look to modernize their processes, they rarely turn to satellite communications as their first choice – cellular, WiFi, WiMAX, etc. are reviewed as options long before satellite,' notes the analyst of this research service. 'Frost & Sullivan expects this restraint to taper somewhat as the M2M market matures and dual and tri-mode products are used more often.'
Growing Awareness of the ROI when using M2M Technologies
Since most M2M technologies are cost savers rather than revenue generators, companies demand a clear business case for implementing such a system. Whether it is reducing the insurance costs or delays on lost assets, maintenance sensors, fuel usage, or inventory control, the benefits of M2M technologies usually far outweigh the costs, and companies are becoming much more aware of this proposition. In industries where competition is stiff and margins are slim, reducing overhead costs such as insurance, theft, fuel usage, and others becomes an attractive method of increasing profitability. This is expected to drive growth in the satellite M2M market, especially within the tracking, remote monitoring, and security fields.
At the end of 2007, there were approximately 1.36 million active satellite M2M units in the market, contributing around $527 million in revenues. Going forward, Frost & Sullivan estimates an installed base of roughly 3.5 million active units in 2012. Most of the revenue growth is expected to come from monthly service fees, as equipment prices are expected to decline steadily over the forecast period due to downward pressure on equipment margins. 'The split between hardware and service revenues in 2007 was roughly 28 percent hardware and 72 percent service revenues,' says the analyst. 'In 2012, the expected division is 21 percent hardware versus 79 percent services.'
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Tracking
- Telematics
- Remote Monitoring
- Sensors
- Security
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