This explosive growth will support an addressable revenue opportunity for mobile operators of nearly $1.2 trillion by 2020, a sevenfold increase from expected revenues in 2011, and will also provide significant growth potential for the entire ecosystem, the GSMA claimed.
The GSMA, with the support of AT&T, Deutsche Bank, KT, Telenor Connexion and Vodafone, and in partnership with Machina Research, today released research that outlines the market opportunity and revenue potential for connected devices.
“We are entering the next phase in the development of the mobile industry, one where we will see mobile connect everything in our lives,” said Michael O’Hara, chief marketing officer, GSMA. “In this new connected life, mobile will transform society and will have a profound effect on the way we interact not only with each other, but also with our surroundings. However, capitalising on this enormous opportunity requires collaboration across the entire ecosystem to demonstrate how mobile technology in everything from tablet PCs to new healthcare devices can enhance people’s personal and business lives.”
Mobile operators can benefit from this important revenue opportunity by addressing key areas of the value chain, such as service provision and system integration, as well as collaborating more closely with vertical industry sectors to provide compelling new services to their customers. The sectors that will benefit from this collaboration include the consumer electronics industry, which could generate direct revenues of $445 billion; the automotive sector, which could generate $202 billion in revenues; the health sector, which could see growth of $69 billion; and the utilities sector, which could see an additional $36 billion in revenue by 2020.
Machina Research has identified a significant addressable market opportunity for mobile operators, although the revenue that can actually be realised will depend on individual business strategies. Mobile operators are uniquely placed to work in partnership with other industries to enable this opportunity because they provide ubiquitous network connectivity; deliver proven customer care, billing and distribution capabilities; and represent a trusted brand for consumers and businesses.
Jim Morrish, director at Machina Research, commented: “We are moving into a new era in connectivity where we will see the proliferation of billions of connected devices in the world. Most of that growth is coming from machine-to-machine: a new market for communications service providers, and with new dynamics. The way that mobile operators, device vendors, service providers and others in the value chain react to this opportunity will have important implications for their future success. Right now, the mobile industry has a clear opportunity to play a central role in the connected life.”
Matthew Bloxham, director of telecoms research at Deutsche Bank, added: “The growth of connected devices has the potential to offer substantial social, ecological and financial benefits to the world economy. The figures announced today highlight the significant revenue opportunity this space could deliver. However the wider economic impact could be far greater, including indirect benefits to industry such as cost reduction, increased efficiency and the potential for new products and services. We are pleased that many mobile operators are already implementing strategies to tap into this market, although a broad industry-wide approach is essential to realising the full opportunity.”
Erik Brenneis, head of M2M, Vodafone Group added: “Devices with M2M capabilities are able to give customers a much richer experience than those without. These figures show the enormous potential of M2M services which become even more attractive when delivered wirelessly, such as personal navigation devices, which are able to show traffic jams in near real time.”