Wireless M2M - bringing smart interactivity into the world of moving machines- PTOLEMUS

PTOLEMUS Consulting Group Mobile machines - bringing smart interactivity into the world of moving machines Mobile Monday Brussels Frederic Bruneteau, Managing Director 7th June 2010

Introduction PTOLEMUS is named after Ptolemy, the geographer who created the first map of the world 2

Introduction PTOLEMUS assists its clients, from strategy definition to business development Our areas of expertise Our services Positioning / Location enablement Strategy definition including business plan Navigation development, board coaching and support Location-based content Telematics & services e.g. connected car, fleet Strategic due diligence e.g. maps, traffic, fuel management, PAYD, road and market assessment prices, speed cameras, charging, e-call weather, parking, etc. Intelligent transport systems Innovation management including product & services Mobile content and social networking, e.g. application development and launch stores, content sourcing, crowd-sourcing M2M Business development including response to RFPs Connectivity (sourcing, MVNO, ESP, etc.) 3

Smart machines We will focus today on mobile, connected, machines MOBILE PTOLEMUS area of focus, NON-MOBILE CONNECTED GEO-CONNECTED MOBILITY IT INDIVIDUALS MOBILE MACHINES MACHINES EQUIPMENT Cars, motorbikes, bikes, Vending machines, Mobile phones, PNDs, airplanes, ships, trucks, light PC, working stations, meters, digital cameras, game consoles, etc. vehicles, building equipment, servers, etc, photoframes, printers, farming equipment... etc. NON-CONNECTED Today's focus NON-CONNECTED 4

Smart machines In which industries will mobile M2M develop? Transportation & logistics Retail & distribution Hospitality Automotive Energy & mining Construction Consumer Emergency services Health Surveillance & security 5

Smart machines Most machines cannot be considered as smart Machines are dumb • Can do only one thing well • Do not listen • Do not speak • They are often too slow • Have limited processing power • They do not understand us • They do not adapt to us, we adapt to them • Do not change their behaviour i.e. do not learn / repeat the same errors 6

Smart machines However, machines are starting to follow the path of our most important machine, our mobile phone The best of mobile handsets for M2M • Our mobile phones hold a growing part of who we are: they know when we get up and go to bed, who we call and talk to, what is our diary • This growing intelligence is spreading to more and more objects, from cars to fridges to lampposts • The mobile phone brings to the M2M industry: - Miniaturisation, - Unexpensive modules / smart cards - Storage capacity - Standards and economies of scale - Improved battery life - Profitable 2G networks and worldwide coverage 7

Smart machines Mobile machines are not like us We appreciate Machines prefer 1. Splashy, highly luminescent screens 1. To avoid displays, which consume power 2. Interaction with other human beings 2. As little interaction as possible to avoid 3. To change our electronic devices every consuming data bundle 2 years 3. To stay alive for 10-30 years 4. Beautiful user interfaces 4. Straightforward, remote interfaces 5. To visit a doctor when we are ill 5. Remote diagnosis and maintenance 6. Spontaneous gestures and contacts 6. Automated responses and processes 7. To spleep at least 8 hours a day 7. To be active 24/7 WE LIKE NEW, ORIGINAL AND THEY LIKE HIGHLY EFFECTIVE, DURABLE EMOTIONAL THINGS AND COLD SYSTEMS 8

Smart machines Despite a common belief, machines will not consume most of the mobile network bandwidth Machines Digital connected photoframes, which consume 10x as much as a mobile phone, are the exception Sources: Cisco, PTOLEMUS 9

Smart machines Of the 16 billion machines in Europe, probably 5 billion are mobile, so M2M is clearly about volumes Active wireless M2M SIM cards in Europe What is driving volumes? Penetration rate of total machines: • Fast decreasing cost of 2G network from 0,13% in 2010 to 0,38% in 2014! (GPRS / EDGE) connectivity • Fast decreasing cost of data-only In millions In billions 80 40 roaming tariffs Number of connections • Fast decreasing cost of GSM data Number of machines 60 30 modules • Fast decreasing cost of GPS 40 20 chipsets • Decreasing cost of SIM cards 20 10 • Key projects, often regulatory- driven (eCall, opening of electricity 0 2007 2008 2009 2010 2011 2012 2013 2014 0 market, etc.) Sources: PTOLEMUS, M2M Magazine 10

Smart machines Machines are becoming (much) smarter They can reflect... They can feel... Microprocessors MEMS They can speak... They will know where they are SIM cards Multi-bearer connected modules A-GPS SIM cards 11

Smart machines The evolution of species Connected High Layering Die-cutting machine train machine Airplane Elevator Tractor Connected Connected car truck Server Parking metre Laptop Air Fridge conditioning system Local Smartphone device Fixed phone intelligence Connected copier WiFi Cash router Connected register PND Oven Traffic light Connected photoframe Connected vending Washer machine Lawn mower Connected Connected watch videocamera Connected Low Hairdryer plug Toaster Low Total solution intelligence High Source: PTOLEMUS 12

Smart machines # However, this connected intelligence will not always come from the cellular network An increasing number of bearers are available Key factors of selection • ADSL / cable / fibre can work • Amount of data exchanged when a synchronization is possible • Possibility of synchronization? and when large data exchange is required • Regular or bursty data exchange • WiFi can also provide unexpensive • Cost connectivity • Availability of economic modems • Bluetooth and / or devices • RFID is well adapted to logistics • Ability to integrate with vertical and industrial requests application • GPRS, 3G and soon LTE • Supplier competition • Sustainability of suppliers 13

Smart machines At last, machines are starting to talk to us... and to listen There is someone to talk to in the car! • Text-to-speech: the device provide voice route guidance, reducing user distraction • Speech recognition enables the user to indicate his destination for an increasingly large number of operations Garmin embedded device for Citroën 14

Smart machines Machines are even helping us when we are in trouble Machines are our friends • Peugeot launched a joint eCall / B-call service in 2003, starting with high end models. • It now has over 800 000 cars equipped with the functionality. • Since 2003, roadside assistance has been provided 3 500 times, including 2 000 times for an automated emergency call. • Peugeot recently decided to broaden the scope of the service by pricing Peugeot Connect at only €290 and making it accessible to entry-level cars such as 207 and 308. • The service provides assistance in local language on a 24/ 7 basis. It is now PSA's eCall system available in 10 countries. 15

Smart machines Machines can now learn from the same machines Itinerary based on estimated speeds • With IQ Routes, TomTom uses historical speed data to provided improved routing • This data has been generated by millions of PNDs in last 3 years - This itinerary actually lasts 29 minutes connected through TomTom HOME (i.e. DSL / cable) • TomTom devices have brought 800 billion measurements The shortest itinerary at this time takes actually 26 minutes • Rather than using estimated speeds, TomTom devices use these actual speed profiles to route drivers Source: TomTom 16

Smart machines Progress towards the connected car is a unique opportunity for wireless M2M The wireless M2M industry 2013 estimated revenues for selected telematics markets will benefit from a number of (Europe, € in millions) key projects 126.000 25.000 • The connected car vision Non-connected is about to become a Connected reality 20.000 • Telematics vendors can address new multi-billion 13.000 15.000 market opportunities - Embedded in-car 18.000 navigation 10.000 - Roadside assistance - Fleet / asset tracking - Car insurance (PAYD) 5.000 7.700 9.500 • Connected solutions can 460 1.654 3.750 encroach on significant 2.047 2.548 1.070 1.500 3.000 existing industries 0 0 0 tio n tio n ing ce ce ing all a a ck an ran rg e-C vig vig tra s ist su ha le na d na e t& e as r In adc tab de Fle sid Ca Ro Po r bed ad Em Ro 17

Smart machines Smart mobile machines are coming • Boundaries between "our" machines and other machines are blurring • The path towards connecting 16 billion machines is just beginning - Machines are becoming part of an ubiquitous intelligent network - Growth potential is enormous • Contrary to mobile, it will not be about ARPUs but about volumes (at least at the connectivity level) • The ability to show and align all players towards clear and large vertical revenue opportunities such as eCall is key to generate these volumes • In the end, we expect fixed M2M / telemetry to become a particular case of wireless M2M 18

Mobile Monday offer PTOLEMUS will publish next week its 2010 European Location Study • 150 pages of our expertise about the location industry, built on • Interviews with over 100 executives from all sides of the industry, from Admob to Yahoo!, • Over 6 months of desk research and primary research, notably an online survey, • A detailed market model so as to combine strategic and technology analysis with hard figures If you wish to r eceive the free information, ju version, or wan st give me you t to have more r business card after the confe rence 19

PTOLEMUS Consulting Group Strategies for Mobile Companies Brussels - Paris - London contact@ptolemus.com w w w. p t o l e m u s . c o m Frederic Bruneteau Managing Director fbruneteau@ptolemus.com Twitter: PTOLEMUS

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Wireless M2M - bringing smart interactivity into the world of moving machines- PTOLEMUS

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Wireless M2M - bringing smart interactivity into the world of moving machines- PTOLEMUS — Presentation Transcript