APAC M2M Outlook


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A Frost & Sullivan Analyst Briefing on the Asia Pacific Maching-to-Machine (M2M) Market.

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APAC M2M Outlook

  1. 1. APAC M2M Outlook<br />JayeshEaswaramony<br />Vice President, ICT Practice <br />
  2. 2. Overview <br />1<br />Business Models <br />2<br />Forecasts <br />3<br />
  3. 3. Changing face of telecom <br />The next 10 years will look very different from the last 10 years <br />Till 2010 <br />Till 2020<br />80<br />5<br />Penetration <br />Growth in connected devices <br />6<br />0.9 <br />Connected devices (bn) <br />Connections (bn) <br />Explosive growth <br />Mature Growth <br />4-5%<br />>12%<br />Telecom Outside <br />Telecom inside <br /><ul><li>Smart enabler
  4. 4. Consumer centric </li></ul>Source: Frost & Sullivan<br />
  5. 5. Why the perfect storm <br />TECHNOLOGY<br /><ul><li>New middle class
  6. 6. Generation Y
  7. 7. Flexibility
  8. 8. Fiscal stimulus of $ 1 trn over 2010-12 across APAC leads to new wave of infrastructure creation </li></ul>GLOBAL <br />INDUSTRY<br />CEO<br />360<br /><ul><li>Service revenues
  9. 9. New business models </li></ul>CUSTOMER<br /><ul><li> Rapid Urbanization
  10. 10. Innovating to zero – sustainability </li></ul>COMPETITIVE<br />BEST PRACTICES<br /><ul><li>Broadband as utility
  11. 11. Cloud computing
  12. 12. Geo-tagging
  13. 13. Smart city – fulcrum of new investments
  14. 14. Connected communities
  15. 15. Convergence of industries – smart grids, energy, comms, logistics </li></ul>ECONOMIC<br />
  16. 16. Machine to Machine ( M2M) – Lots of possibilities <br />M2M has the ability to impact multiple industries <br />Machine to Machine(M2M) as any kind of communication between geographically distributed wireless devices through a centrally managed software platform. AM2M system comprises of connectivity enabled devices to capture events and collect the data, a cellular/hybrid network to communicate with the server and a software application that allows the data to be analyzed, reported, and acted upon. <br />Source: Frost & Sullivan<br />
  17. 17. M2M System Architecture <br />The M2M system consists of four layers: sensing layer, communication layer, management layer and application layer. <br />System Architecture<br />
  18. 18. Major Applications of M2M<br />APAC M2M Market Outlook: Market Segmentation <br />Retail <br />Automotive/Transportation<br />Healthcare & Others <br /> Inventory update across <br />distributed locations/warehouses<br /> POS / Vending Machine <br /> Mobile Payment/Mobile Wallet <br />Remote patient care<br /> Remote Monitoring / Diagnosis <br /> Weather / Temperature Monitoring <br /> Vehicle tracking <br /> Telemetric<br /> Navigation and routing<br /> Route optimization<br /> Fleet Management <br />Finance <br />Logistics<br />M2M Applications<br /> Mobile Payment/Mobile Wallet<br /> Remote Asset Management <br /> Security <br /> Remote Servicing <br /> Real-time stock management<br /> Tracing sensitive items<br />Utilities & Energy<br />Consumer <br /> Automated metering<br /> Energy usage and optimization<br /> Check on pilferage and theft<br /> Street light management<br /> Monitoring for seismic activity and other dangerous natural phenomena<br /> Healthcare<br /> Personal Navigation <br /> E-Reader<br /> Baby/Old Care /Locator <br /> Residence Security <br />Manufacturing<br /> Remote Monitoring/Diagnostics <br /> Remote asset management<br /> Prototype testing<br /> Regulation compliance (carbon credits)<br />
  19. 19. APAC M2M Market Outlook: Drivers and Restrains <br />Revenue opportunities for MNOs<br />Enablers<br />Enablers<br />Falling cost of M2M modules <br />and devices<br />Adoption of Mobile Technologies: 3G/WiMAX/LTE<br />Government and<br />regulatory support<br />Constraints<br />Constraints<br />Costs of initial deployment<br />Lack of economy of scale<br />Lack of standardization<br />M2M Drivers and Restrains <br />Shift of business model<br />Source: Frost & Sullivan<br />
  20. 20. Overview <br />1<br />Business Models <br />2<br />Forecasts <br />3<br />
  21. 21. Complex Value Chain <br />The value chain is very complex <br />Vertical specific/ System integrators <br />M2M Service Distributors<br />Application Developer<br />M2M Platforms <br />M2M Module Vendors<br />Device Vendors<br />M2M Chipset Vendors<br />Source: Frost & Sullivan<br />
  22. 22. M2M Operators Market Development <br />Developed Markets <br />2004 & before 2005 2006 2007 2008 2009 2010 2011 <br />* Vodafone platform<br />*TelenorConnexion<br />* KPN platform<br />Globe Leaders <br />(Alliance & Platform) <br />*NTT DoCoMo<br />* KDDI<br />* AT&T Platform<br />* Softbank<br />* nPHASE (Qualcomm and Verizon)<br />* SKT<br />* Sprint NextTel & DataSmart <br />* KT<br />APAC <br />Early Adopters<br />*Telstra<br />Emerging Markets<br />*China Mobile<br />*StarHub<br />* China Unicom<br />* Maxis <br />Launch <br />M2M<br />* China Telecom<br />APAC <br />Fast Followers<br />* CSL<br />*Globe<br />* Reliance<br />* Celcom (Malaysia) <br />Source: Frost & Sullivan<br />
  23. 23. M2M Business Models <br />M2M Chipset Vendors <br />M2M Module Vendors<br />M2M Device Vendors<br />M2M Application Developer<br />M2M Service Providers<br />M2M Service Distributors<br />Vertical Industries & Enterprises Consumers <br />M2M Connection Providers<br />Telco: AT&T<br />Model 1: Device Driven Model <br />Amazon<br />Consumers<br />Amazon<br />Kindle<br />Telco: Sprint<br />Model 2: Consortium Model <br />Verizon<br />Business & Consumers<br />Verizon<br />Various Partners <br />NPHASE<br />QUALCOMM <br />Verizon <br />Source: Frost & Sullivan<br />
  24. 24. M2M Business Models (Contd…) <br />M2M Chipset Vendors <br />M2M Module Vendors<br />M2M Device Vendors<br />M2M Application Developer<br />M2M Service Providers<br />M2M Service Distributors<br />Vertical Industries & Enterprises Consumers <br />M2M Connection Providers<br />Telstra<br />Model 3: Platform Model<br />(usually through partnerships)<br />Vertical Industry & Enterprise <br />Business& Consumers <br />Telstra<br />M2M<br />Platform<br />Jasper Wireless<br />Model 4: Operator Driven Model <br />Business & Consumers<br />China Mobile & Various Partners<br />( SKT, NTT Docomo ) <br />China Mobile/ SKT/ DoCoMo<br />Source: Frost & Sullivan<br />
  25. 25. Operators’ Strategy ( Developed Markets)<br />
  26. 26. Operators’ Strategy ( Emerging Markets) <br />
  27. 27. Strategy Parameters Comparison <br />1. Device Driven Model 2. Consortium Driven Model 3. Platform Driven Model 4. Operator Driven Model <br />Neutral <br />Unfavorable <br />Favorable<br />Source: Frost & Sullivan<br />
  28. 28. M2M Game Changers <br />2011<br />2015<br />
  29. 29. M2M – Future Industrial revolution <br />Internet of things <br />M2M<br />Smart Infrastructure <br />Source: Frost & Sullivan<br />
  30. 30. CSP<br />(as aVSO)<br />VSOn<br />VSO2<br />VSO3<br />Concept-to-Cash: Partner Orchestration, Fulfillment, Monetization and Management<br />The CSP is an Enabler of New Virtual Services and Manages the Business Enablement Platform<br />Healthcare Provider<br />Utilities (Water)<br />Fixed & Mobile BB<br />Content Supplier #3<br />Content Supplier #2<br />Data<br />Storage<br />Cloud Services<br />Utilities (Gas)<br />Content Supplier #1<br />Healthcare Supplier #1<br />Utilities (Electric)<br />Healthcare Supplier #2<br />Cross industry business models <br />Customers<br />(Business or Consumer)<br />Virtual Services<br />Operators (VSOs)<br />(CSP or Others)<br />and/or<br />. . .<br />CSP<br />Suppliers(CSP and Others)<br />Others …<br />
  31. 31. Overview <br />1<br />Business Models <br />2<br />Forecasts <br />3<br />
  32. 32. APAC M2M Connections Forecasts by Country <br />The APAC M2M connections was 20.8 million in 2010 and is expected to reach 116.6 million by 2015. China is the biggest M2M market, in terms of connections. China has 8.7 Million connection enabled devices in 2010 while Japan has 3.5 million and South Korea has 2.0 million. China is going to have 57.6 Million connections by 2015, followed by Japan and South Korean, with 20.9 million and 10.2 million connections respectively. Among these countries, we expect China, Malaysia and India to grow faster than the APAC average level. <br />APAC M2M Market Outlook: Connections Forecasts by Country (2011-2015) <br />Source: Frost & Sullivan<br />
  33. 33. APAC M2M Connections Forecasts by Application <br />The APAC M2M connections was 20.8 million in 2010 and is expected to reach 116.6 million by 2015. Smart Grid is the biggest contributor, followed by vehicle telematics. These two together were accounted for 63.4% of the total APAC connections in 2010. The percentage will decrease to 54% when other services start to gain traction. The consumer connectivity services are expected to be the one that grows at CAGR 51.9%, the highest growth among all the applications, which reflects the trend of M2M application move beyond industry usage. <br />APAC M2M Market Outlook: Connections Forecasts by Application (2011-2015)<br />
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  35. 35. For Additional Information<br />Donna Jeremiah<br />Corporate Communications<br />Asia Pacific<br />+603 6204 5832<br />djeremiah@frost.com<br />Carrie Low<br />Corporate Communications<br />Asia Pacific<br />+603 6204 5910<br />carrie.low@frost.com<br />JayeshEaswaramony<br />Vice President<br />ICT<br />+65 6890 0999 <br />jayesh.e@frost.com<br />Jessie Loh<br />Corporate Communications<br />Asia Pacific<br />+65 6890 0942<br />jessie.loh@frost.com<br />