Opportunities and Challenges in Machine-to-Machine Communications

5/6/2018 1

ABHISHEK ROY

SYSTEM DESIGN LAB,

SAMSUNG ELECTRONICS, SUWON.

ABHISHEK.ROY@SAMSUNG.COM

5/6/2018 2

5 Cellular M2M Communications – Vertical Segmentation

7 Cellular M2M Communications – Key Drivers Summary

2 U.S. Cellular Market—Market Engineering Measurements

1 Connected Devices Ecosystem – Market Segmentation

3 U.S. Mobile Communication Markets – Connections, Voice Revenues, Data Revenues

4 Machine-to-Machine (M2M) Communications – A Simplified View of the Value Chain

8 Cellular M2M Communications – Key Challenges Summary

9 Cellular M2M Communications - Market Forecasts

10 Cellular M2M Communications - Other Key Highlights

11 Cellular M2M Communications – Overview of Operator Strategies

6 Key Market Realities in Cellular M2M –Past , Present and the Future

12 Cellular M2M Communications – Key Conclusions

Outline

5/6/2018 3

Connected devices ecosystem- Market segmentation Mobile and Wireless connected ecosystem

Feature Phones

SmartphonesMobile

ComputersTablets M2M

Notebooks Netbooks Air Cards

Transportation & Telematics

Financial Services &

Retail

Healthcare /Wellness

Smart Grid, Utilities,

Industrial

Security & Home/Building

AutomationOthers

Vehicle Convenience,

Safety, & Diagnostics

POS Terminal Solutions

Wireless Patient Monitoring

Smart Metering, Smart Grid,

Utility Routers

Intrusion Detection &

Safety SystemsBusiness Apps

MiFi

Connected Display,

Navigation, Gaming

eReaders

Consumer Electronics

GPS & Fleet Tracking

Vending Machines, ATM,

Kiosks

Patient Care & Scheduling

Remote Telemetry,

SCADA

Remote Surveillance,

Access Control, Building

Automation

Miscellaneous Systems

5/6/2018 4

U.S. Cellular Market—Market Engineering Measurements

Market Overview

Mobile Connected Devices Market: 2010-2017

6 Year Forecast Feature Phones

6 Year Forecast Smartphones

6Year Forecast Mobile Computing

6 Year Forecast M2M Market

6 Year Forecast Tablets

(CAGR)

Connections:

Data Consumption:

-21.0%

-2.0%

(CAGR)

Connections:

Data Consumption:

20.4%

49.1%

(CAGR)

Connections:

Data Consumption:

18.4%

36.7%

(CAGR)

Connections:

Data Consumption:

49.0%

91.8%

(CAGR)

Connections:

Data Consumption:

22.3%

38.6%

Market Stage

Mature

Market Revenues

$172.6 B

(2010)

Mobile Connections

311.5 M

(2010)

Average Revenue Per Connection

~$52.50

Connections at End of Forecast Period

418.0 M

(Projected 2017)(Revenue/Connections/12)

Stable IncreasingDecreasing

5/6/2018 5

Connections and penetrationexpected to exceed 400 million and125 percent respectively by 2017.

Wireless will become the prime dataconnectivity medium for multipletypes of devices which will driveadoption.

Total market revenues to reach $240 billion by 2017. Within the nextfive years, data revenues will exceedvoice revenues.

Eventually, all services – includingvoice will be packet-based and allwe will have it plans for ‘data’.

U.S. Mobile Communication Markets – Connections, Voice

Revenues, Data Revenues

5/6/2018 6

Machine-to-Machine (M2M) Communications – A Simplified View

of the Value Chain

In its simplest form, M2M communications refers to data sharing between endpoints (electronic devices) and an enterprise

backend systems through a wireless/ wireline channel. The device may be used for monitoring, control and notification, or

information sharing and presentation purposes.

Data Collection

Data Sharing

Data Interpretation

M2M Devices and Endpoints

Wireless / Wireline Networks

Enterprise Backend Systems

Key Functions

Key Enablers

Key ParticipantsDevice & Module

VendorsAccess Network

Providers Application /

Platform Providers

I II III

Communication Flow

5/6/2018 7

Cellular M2M Communications – Vertical Segmentation

•Laptops/Netbooks/Notebooks•eReaders• Others - Connected Consumer Display, Picture Frames, Others

Consumer Electronics

• Vehicle Convenience & Safety• Vehicle Diagnostics• Others - Fleet & Asset Tracking, Others

Transportation and Telematics

• Patient Monitoring & Reporting• Adherence & Reminders• Others - Patient-Provider Collaboration(video communication, image uploads & management), Others

Healthcare

• Intrusion Detection & Safety Systems• Remote Surveillance & Access Control• Others - Roadside Speed Monitors, Automatic Lighting Controls, Others

Security & Safety

Utilities & Industrial Financial Services & Retail

• Smart Grid Components• Industrial Monitoring & Control Applications and Devices• Others - Industrial Routers, M2M Gateways, Agriculture Systems, Others

• POS Terminals & Devices• ATMs, Vending Machines, Kiosks• Others - Digital Signage, Asset Tracking

5/6/2018 8

Key Market Realities in Cellular M2M – Past , Present and the

Future2000-2008 2009-2011 2012-2016

Market Adoption

Customer Care Requirements

ARPU

Bandwidth Consumption

3G/4G Usage

Medium HighLow

5/6/2018 9

Cellular M2M Communications – Key Drivers Summary

5/6/2018 10

Cellular M2M Communications – Key Challenges Summary

Cellular M2M Communications – Key Challenges Summary

Immense Service & Support

Requirement for Evolving M2M

Market

Need to GeneratePrice Premium –

‘Beyond Bandwidth’

Pricing

Driving Adoption of 4G

Device & Module Certification

Device & Module Certification

5/6/2018 11

Cellular M2M Communications - Market Forecasts

M2M connections on cellularnetworks in the United States toexceed 75 million in 2017.

These figures do not include laptops,netbooks, notebooks and tablets,which would be in tens of millionsas well .

Top three categories by connectionswill likely be Transportation andTelematics, Consumer and theUtilities and Industrial.

In many cases, a single endpoint(such as a rugged router) willsupport a large number of otherconnected devices. The ‘wireless-supported’ vertical breakdown willlikely look very different then.

5/6/2018 12

Cellular M2M Communications - Market Forecasts (contd..)

A large majority of cellular M2M connections still use 2G-2.5G networks. This is changing

rapidly due to a strong adoption of consumer devices as well as various other high-

bandwidth applications across the other verticals ( in-car infotainment, security and

surveillance, digital signage, and others).

5/6/2018 13

Cellular M2M Communications - Other Key Highlights

5

6

2

Different pricing for different speeds

Role of M2M cloud to become increasingly important going forward

Base data access revenues of more than $ 4.0 billion by 2017

1 Annual data consumption of nearly 7000 million MB by 2017

3 4G module pricing to become less than half of what it is today

4 Tiered pricing for high-bandwidth M2M applications to become more prevalent

5/6/2018 14

Cellular M2M Communications – Overview of Operator Strategies

Optimize Data

Pricing

Certification & Training

Other Value-added

Services

Promote M2M

MVNOs

Partnerships &

Ecosystem

The Network

• Partner with specialized M2M platform vendors to simplify device on-boarding and management

• Focus on vertical solutions

• Position high-speed networks for high-bandwidth M2M apps

• Complete network enhancements to support M2M

• Tiered Pricing• Low pricing for slower

networks, off-peak hours

• Reduce time for network certification

• Approve devices with approved modules faster

• M2M innovation centers

• Multiple pricing options – large vs. smaller upfront investments

• Reduced limits of liability

• Rely on specialized M2M service providers

• Enable business collaborations through their network platforms

5/6/2018 15

Cellular M2M Communications – Key Conclusions

Strong growth expected in the M2M communications market in the United States

Virtually all segments of the value chain working hard to support growth of the M2M

segment

Ease of deployment ,and ease of management of existing implantations will be the key

to achieving long-term success in this market

Frost & Sullivan believes that eventually, both direct connections and revenues

from M2M could become larger than traditional mobile phone business in several

regions of the world, including the United States – this could take anywhere from

12 to 24 (or 30) years.

5/6/2018 16

Next Steps

Request a proposal for or Growth Partnership Services or Growth Consulting

Services to support you and your team to accelerate the growth of your company.

(myfrost@frost.com) 1-877-GoFrost (1-877-463-7678)

Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan

Global Congress on Corporate Growth (www.gil-global.com)

Register for the next Chairman’s Series on Growth: Driving Innovation – The What,

Why, and How. Visions and Benchmarks as the Innovation Key

(October 5th) (http://www.frost.com/growth)

Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of

innovative growth opportunities

(www.frost.com/news)

ReferencesOpportunities and Challenges in the U.S. Cellular M2M Communications Market, by Frost and Sullivan on Jul 14, 2011

5/6/2018 17

Thank you

5/6/2018 18