The Machine-to-Machine (M2M) market is evolving rapidly to become a mainstream sector of the cellular industry. The majority of mobile operators in North America, Europe and Asia-Pacific have established business units to focus on M2M’s fast growing market. According to estimations, the market for cumulative cellular M2M connections will increase from 110 million connections in 2011 to an impressive 365 million connections by 2016. This increase signifies a compounded annual growth of approximately 27 percent by 2016 and translates to about $35 billion in connectivity series revenue. These forecasts have been projected by ABI Research (News - Alert) on cellular M2M connectivity.

ABI Research’s report on Cellular M2M Connectivity discusses the market and technical trends impacting the cellular M2M connectivity services market, analyzes cellular M2M connectivity service provider strategic responses and forecasts cellular M2M connections and revenue growth for the period 2007 through 2016, which is segmented by region, application and air interface standard.

In a release, Sam Lucero, the Practice Director at ABI Research, said, “As mobile operators further develop their M2M service offerings, software platforms and M2M application developer support will feature as increasingly larger components of the operators' services. For example, AT&T announced on January 9, 2012 that it would be reselling Axeda's (News - Alert) M2M application platform in a US carrier exclusive deal. This platform will enable AT&T customers to more easily develop and deploy complex M2M applications."

Automotive telematics and smart energy have been identified as the two largest cellular M2M market segments whose revenue will increase over the forecasted period. Factory installed systems such as GM’s OnStar service, aftermarket services such as usage-based insurance, fleet management systems which are all part of automotive telematics, will together signify more than $15.5 billion in 2016. On the other hand, smart energy, which is specific to cellular connectivity to smart meters and data concentrators, will represent more than $7.5 billion in 2016.

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