Education, standards and carriers still remain as hurdles for
wireless machine communications to overcome.

Machine-to-machine (M2M) communications, for everyone from automotive designers to general contractors workers to power company meter readers, brings the promise of a future in which machine maintenance will rarely if ever require a human presence. Devices large and small, whether customer-facing or buried among gears and microchips, will all communicate with central servers using ordinary mobile phone networks. Some of that is happening today while much remains in the realm of science fiction. Carriers get an M2M promise of their own – that global annual revenues may reach several billion dollars within the next decade.

But before those promises can be fulfilled, module makers and service providers alike acknowledge the need to re-evaluate the industry’s strict requirements which differ markedly from regular mobile phone and data plans. The good news is an abundance of hardware and services for this market. The bad news, suppliers say, is a lack of public awareness of the market, dominant standards and trade groups to guide the M2M industry. Suppliers also express concern that mainstream mobile carriers don’t totally grasp the customer requirements. Only when these issues are resolved can M2M emerge from being just another insider buzzword and enter the mindshare of field workers around the world, whose companies would pay for the specialty modules and network management.

Companies such as Kyocera Wireless, Motorola M2M, Siemens Wireless Modules, Telit Communications and Wavecom are some of the top brands in the hardware space. Their respective M2M executives agree that customer applications need to last for several years and be several times more reliable than consumer wireless offerings.

They also agree that recent developments in microprocessor technology, such as multiple kinds of radios and generous amounts of random-access memory all integrated onto a single piece of silicon, signal the start of a new cycle of applications that are about to reach customers. Finally, they agree that competition between specialty service providers such as Aeris Communications and Jasper Wireless is a healthy way of pushing mainstream carriers to continue opening their networks and to develop creative and profitable business strategies for all parties involved.

Tucker: Possibilities for M2M improve with better economics.

“If you look at the trends of what’s going on out there, it’s really a very interesting year for us. What I see happening are there’s a lot more people looking to design wireless into their applications,” said Brian Tucker, global vice president of product management at Telit. “Now it’s gotten to a point where the module prices are low enough, the ease of integration, people can now wireless-enable applications that previously took too much time, too much money, for too little benefit. The trend that I’m seeing out there is just the magnitude of the applications,” he explained.

However, there are still other issues. The most obvious obstacle is the term M2M itself. Most people outside the wireless business have never heard of it and are likely to infer a meaning such as “mobile-to-mobile,” which only causes more confusion, said Edward Jansson, senior director of engineering services at networking and consulting company Numerex.

“People don’t know what it is, so you just say it’s telemetry, or you just tell them what it does and that gets them through that hurdle,” Jansson said.

According to Jasper CEO Danny Shader, his board of directors wanted to pick a better word to describe the service. “It’s just a horrible word from a marketing perspective,” he said. Customers want to solve problems and should not have to master the marketing jargon of a whole new industry to accomplish that, he noted.

Unfortunately the M2M industry is not doing much to help itself overcome the confusion. From early 2005 to early 2007, the CTIA sponsored an M2M working group in its Wireless Internet Caucus. Aeris’ Peter Stone, who then was vice president of corporate development and is now General Counsel, served as the chairman, hoping to see industry standards so that competitive modules could interoperate and customers could program to common APIs.

Jansson: M2M doesn’t translate outside of industry circles.

“We really struggled with an appropriate focus. The thing that came the closest and got the most support was something around certification practices. One of the reasons that it didn’t go anywhere was that the operators themselves really didn’t see the value of this kind of thing coming from a group like that,” Stone said.

The group then tried existing independently. “For a period of maybe six months after that we continued to meet as a group to try to figure out if we had enough of a basis to keep it going as an independent association or under somebody else’s wing.” Stone said.

Although Stone said there was plenty of work that could have been done, he didn’t think the industry was mature enough. “You’ll see a lot of focus on sales. It’s also very, very diverse in terms of the types of applications, the types of markets and that all makes it difficult for standards,” he said.

No other governing bodies are stepping forward. Currently, there are dozens of overlapping standards that could all apply to M2M applications, such as the IT-derived concepts of extensible markup languages and service architectures, along with proprietary industrial standards and the Universal Plug-And-Play initiative. And the suggestion of universal M2M programming interfaces is a mirage, Yankee Group analyst Marcus Torchia said.

“One of the greatest problems in my opinion for this market to scale up is giving these developers a standard API or a standard toolset. What’s in it for the carriers is if they publish their APIs openly, maybe by some miracle of the developer community they’re going to get a following,” Torchia said. Who should do that and how they should do it still remain the subject of debate within Yankee, he said.

Even solid answers would still leave mobile carriers with much to do if they want to appease M2M players. Better-trained support agents, enterprise-class module management software, flexible data rates, global roaming agreements and a healthy discussion about security are all vital to the long-term success of the M2M industry, suppliers and analysts said.

There also is a wish list for lower-level components companies, such as the desire for original chip designs instead of rehashed mobile phone parts. Another big market opportunity is for open-source software aspects, which are already proved to be commercially viable in the information technology world.

“We’d like the carriers to be more responsive partners in this whole process, instead of trying to just say who’s boss here and you shall conform. We’re all in this together… when you end up with a network issue, it can take a ridiculously long time for a response because they’re used to a handset. Our stuff doesn’t work that way; it relies on the network actually being there,” Numerex’s Jansson said.

Jasper’s Shader echoed that desire. “Nirvana is, you design a product, you test it once and certify it anywhere in the world, you should have one SKU. When the customer powers it on, it just starts working; he’s not aware of any magic there,” he said.

None of that is reality today. Looking forward, Shader said, “It’s not what we’re doing that’s so interesting – it’s what all our customers and partners are doing that’s going to be so interesting.”

BUILT FROM WIRELESS LEGACY

Motorola has a unique perspective on the M2M communications market. Unlike other market leaders, Motorola approaches M2M from a more traditional mobile telephony perspective. The company built radio telephones and teletype machines as early as the 1930s, developed radio-based car phones in the 1960s and championed the market for cellular flip-phones, 2-way pagers and push-to-talk systems in the 1990s. “We leverage quite a lot of that, the relationships we have with carriers,” said Effi Goren, strategic marketing director for wireless modules. “Wireless is what we’ve been doing for years.” Although Motorola’s handset business is presently for sale, the modules business is organizationally separate and will remain part of the company, Goren said. The opportunity is large and Motorola is able to succeed by keeping its vertical-market focus in marketing its modules, serving niches such as location services, meter reading, handheld data terminals and security applications in addition to the automotive space. “You talk their language. It’s nice to have one keyword that portrays it all but it’s really case by case,” she noted. Goren said the M2M field needs a deeper penetration. “Looking at the value chain, ecosystems around that value chain will have to be formed. We’re happy selling modules, we’re doing a good business off of that [but] we definitely want to spot more segments,” she said. It’s important for wireless carriers and customers alike to understand that modules are just one part of those ecosystems. Automating machine communications is not always easy or instant, but it could be simpler when services and standards eventually come into play, she said.