Berg Insight: 186 million machines will be connected to mobile networks in 2012

The number of cellular network connections used for machine-to-machine communication will grow from 37.5 million connections in 2007 at a compound annual growth rate (CAGR) of 37.9% to 186 million connections in 2012, according to new a research report from Berg Insight. GSM and legacy technologies currently dominate the market and accounted for about 71% of the total number of active connections at the end of 2007. CDMA was the second largest technology with a strong foothold in North America and parts of Asia-Pacific, while WCDMA has so far primarily been adopted for machine-to-machine applications in Japan. Elsewhere the adoption is held back by high component costs and limited network coverage.

At the moment, machine-to-machine applications in general correspond to between 13% of the reported number of mobile subscribers in developed markets. In Sweden and Finland the share is closer to 10% due to extensive use of GPRS for meter reading applications. However, Berg Insight forecasts that vehicle telematics applications will dominate the machine-to-machine cellular market in most parts of the world and account for more than half of all network connections in 2012.

“Safety and security concerns manifested either in public regulations or customer preferences is tipping the balance in favor of massive rollouts of telematics applications by the global automotive industry”, says Tobias Ryberg, Berg Insight’s senior analyst. “In North America, OnStar already gives peace of mind to millions of drivers. Europe is well on the way to introducing the eCall automatic emergency call system and several Latin American countries are considering mandatory tracking devices on all new cars to combat epidemic vehicle crime.”