M-Health will be biggest driver of M2M

The number of mobile connected, machine-to-machine (M2M) and embedded devices will ramp up to nearly 412 million globally by 2014, according to analyst firm Juniper Research. But the main market drivers won't be the oft-hyped e-readers or netbooks. Rather, they will be several enterprise verticals lead by healthcare monitoring, a small market today, but one poised to achieve significant revenues.

Juniper identified the enterprise markets exploring M2M as utility metering, mobile-connected buildings, consumer and commercial telematics and retail and banking. All of these verticals will see growth in both numbers and service revenues, according to Juniper Research senior analyst Anthony Cox. Smart metering will experience the most growth, but healthcare monitoring applications will begin to reach the commercial roll out stage from 2012 and will see more potential in achieving service revenues, he said.

“Eventually one of the big ones will be health and health monitoring in particular," Cox said. "This is just starting at the moment and is still in very much its infancy. Health monitoring will use short-range technologies to begin with such as NFC and Bluetooth or WiFi and later develop into more sophisticated systems whereby the cellular networks are being used to monitor the health of individuals.”

Already in the health care market there are several iPhone applications that Cox said could eventually be linked to ancillary devices like a body-monitoring device. Through apps on the iPhone or other smart devices, users eventually might not need the custom, purpose-built units. There will be pure M2M devices, such as heart monitors designed specifically for M2M, as well as apps developed to link to the equipment, Cox said.

“For example, a sensor could be attached to an iPhone as an ancillary device connecting to the iPhone and the healthcare App within it,” Cox said.

To date, the device market has been fragmented by hundreds of small players and competing standards. Going forward, however, the market will be large, by necessity. In the next 20 years, the number of people between age 60 and 80 will require an enormous amount of health care, Cox said. One way that they are addressing costs is through monitoring patients at home. M2M is one way to do this, starting with the WiFi networks, then short-range networks and eventually cellular networks, Cox said.

"That is the sort of thing people will be willing to pay for," Cox said. "It's an app that is very, very useful. But at the same time, it's one that will take time to come. Health organizations aren't going to move quickly. There will requirements for testing and making sure they are right, because of the crucial nature of healthcare."

Wireless operators have been looking to M2M as a way to recoup declining voice revenues for some time now, but Cox noted that revenues won't be easy to come by. On the consumer side, with devices like eReaders and netbooks, the ARPU will be much higher, as will the bandwidth they require. But for enterprise apps, scale will be key.

"Really, you are talking about a very different market from the market mobile operators work in at the moment where they get between $40 and $60 per month for a cellular connection to a normal subscriber," Cox said. "In M2M, revenue per user will be a much lower, maybe only a few dollars. On the positive side, device numbers can be a lot higher and churn a lot lower.”