The document discusses the rise of connected consumers and the evolution of Machine to Machine (M2M) services, highlighting the significant impact of mobile data and applications on consumer behavior. It emphasizes the adoption of M2M 2.0, which focuses on real-time communication and behavioral economics to encourage positive consumer choices and innovative business models. Various applications, such as 'pay as you drive' insurance and recycling incentives, illustrate how M2M technology can lead to societal benefits through improved decision-making and cost savings.

2. The Connected Consumer and
Smart M2M Services
Mike Ueland
Vice President & General Manager
Telit Wireless Solutions

3. Connected Consumers are Mainstream
91% 92% 89% 6500%
US wireless of population of the handsets Rate of AT&T”s
penetration; 25% is covered by on wireless wireless data
of all households 3G network carriers’ growth past 3 ½ yrs
are wireless only networks are
Web capable
Sources: CTIA, AT&T, ABI Research

4. Regularly visit Kindle eReader sales
Over 300,000 iPads
community sites tripled in the first half
sold on the first day
(Facebook, MySpace, of 2010 and are
(April)
YouTube) outselling hard covers
Consumers are creating and consuming digital data and media

5. Sample Applications
M2M Functions
• Track usage
• Upload data
• Report changes
• Monitoring and
notification
• Transactions
• Digital displays
• Location tracking
• eReaders/ emerging
devices

6. Moving to M2M 2.0
M2M 1.0 M2M 2.0
Batch • Communication Real-time
Productivity • Customer benefit Usage based
pricing
Niche • Market size Broad

7. M2M 2.0 Market Drivers
• New OEM automotive telematics incorporating 3G (Audi)
Emerging 3G • Opens up new applications
Airtime & • Next generation 2G/3G modules driving down size/power/price
Equipment Costs • Carriers open to innovative pricing models (i.e. Kindle)
Operators • AT&T (EDO), Verizon (ODI), Sprint (Emerging Solutions) have all
reorganized their structures
Engaged • AT&T expects to boost subscriber penetration to 500%
Regulatory • Legislations such as the eCall mandate in Europe, Resolution 245 of
the Brazilian government and local initiatives in China create huge
Changes market potential

8. M2M‘s Impact on the Connected Consumer
m2m Enables Economic Incentives and Influences Positive Consumer Behavior
 Recent reductions in the cost to deploy are enabling more
consumer-focused applications
 Applications have the potential to make a BIG impact on choices we
make in our daily lives
 Applications can produce positive benefits to individuals and society
 Many of the new applications are driven by the principles of
behavioral economics
 Behavioral economics is a field of economic research that looks at
how individuals make economic related decisions – what does this
really mean….

9. What is Behavioral Economics?
All of economics is meant to be about people’s behavior. Right??
So, what is behavioral economics, and how does it differ from traditional economics?
Traditional Economics
Behavioral Economics
• Conceptualizes the world populated by humans that are
A classic example is the
rational that behave in a way to maximize their difference between opt-in
individual self-interest and opt-out in a program
such as organ donation.
• Framework ignores or rules out virtually all behavior and
If you tell people that they
includes unrealistic traits can opt-in to donating
their organs if they are
killed, a few will feel
Behavioral Economics strongly enough to do it—
most people won't. If you
• Assumes individuals don’t always make “rational” switch that to opt-out the
decisions because of being influenced by other reverse happens—very
few people opt out.
factors/context
• Markets are inefficient

10. Example – How Choices are
Presented Influence Outcomes
• Director of food service for a major city school system
influenced what students ate by changing how the food
was presented in the cafeteria line
• Putting fruit before desserts or moving carrot sticks to eye
level
• District found they could increase or decrease the
consumption of food items by 25% without making
changes to the menu
• Practice of giving people freedom of choice but steering
them toward decisions that benefit themselves and
society is called “libertarian paternalism”
• Director of food services is a “Choice Architect” by
arranging food choices that resulted in healthier
selections- organizing context for decision making

11. Applying Libertarian Paternalism to M2M
Applications Provide Incentives for People to “Do The Right Thing”
• Pay as You Drive captures driving behavior and encourages better driving
habits through lower rates
• i.e. Progressive Insurance with MyRate Program
• Congestion-based tolls to reduce traffic accidents, congestion and pollution
• Demand response programs in the utility sector encourage people to shift
electric power usage to nonpeak periods
• Pay as You Throw households that throw out more pay more for trash
collection encourages recycling
• Medical reminders to patients encourages better overall health
• i.e. mHealth solution from Vitality, GlowCaps

12. Pay As You Drive Insurance
• Launched in 2008; currently in 22 states
• Easy self-install by the consumer into the vehicles
OBD II port
• Voluntary program offering 15-25% discounts
based on driving habits
• Captures driving data, distance, time, sudden
acceleration, and braking
• Benefits Progressive by better calculation of risk,
lower loss ratio, improved segmentation
• Benefits consumers through lower premiums
• Societal benefits could be fewer accidents, lower
car emissions and less road maintenance

13. Payment Assurance
• As condition of loan, finance
company requires black box
• Auto disabler prevents car
from being started
• Locate and recover asset
when payments are not made
• Encourages on-time payments
• Expanding from “Buy Here,
Pay Here” to traditional auto
financing
• 35-45 million car sales a year,
20 million are sub-prime

14. mHealth Solutions – GlowCap by Vitality
• GlowCaps use light and sound to signal
when it is time to take a pill – relays
status to Vitality’s secure network
• GlowCaps can even call with refill
reminders and connect the patient to
their pharmacy as pills deplete.
• Each month GlowCaps mails a printed
report to you and your doctor if
requested
• Encourages better health and reduces
costs through health maintenance and
daily medication adherence
• 800 million people have chronic
conditions (GSMA)

15. Pay as you Throw
• Charges households a higher bill for
putting out more trash for collection
• Cost effective method of reducing
landfill disposal and toxins
• Encourages and increases recycling
efforts
• Recycling containers can send
information about how full they are
and trigger pickup
• Weight of recycled material can be
credited to each household and used
to reduce taxes or as a credit towards
municipal services

16. Summary
• Consumers are more connected
than ever before
• M2M 2.0 is about providing
consumers with more timely
information in which to make
better decisions
• New business models are being
created that leverage M2M
technology and create “win-win”
scenarios