Communications and Technology Industry Research

ABI Research (News - Alert) recently released two reports entitled “Chinese Cellular M2M Module Market” and “Chinese Cellular M2M Services”, which provide five-year forecasts for China’s cellular module market and the MNO-led cellular connectivity market.

The M2M market is basically defined by cellular module shipments and connections. China’s cellular connection revenue, which makes up more than one-third of the Asia-Pacific’s (APAC) M2M market, is estimated to grow from $642 million in 2011 to $2.76 billion in 2016 according to the latest report from ABI Research.

China Mobile (News - Alert) is all set to capitalize from this market as it started M2M development at an early stage and is now focused on developing M2M standards and promoting economies of scale, China Unicom (News - Alert) has launched sector-specific M2M applications such as Bank New Horizon, Ocean New Horizon, and Logistics New Horizon and is also going into the telematics market as a telematics service provider (TSP).

China Telecom (News - Alert) only recently decided to launch into the domestic M2M market and is looking to gain market share by offering a number of value-added services through their strong relationships with enterprise clients.

In a release, Jake Saunders, vice president of forecasting at ABI Research said, “China’s latest economic five-year-plan has placed the ‘Internet of Things’ as a key, strategic national industry initiative for the country. Carriers have made significant progress through 2011 in terms of developing technologies, unified platforms, applications, and strategic cooperation.”

The report also expects China’s cellular module shipment to increase from 3.76 million in 2011 to over 13.61 million connections in 2016, which will constitute 32 percent of APAC’s forecast in 2011 and growing to 37 percent by 2016. A major way to measure the M2M market is the cellular module market which is currently being confronted with growing commoditization and price pressures from China-based module vendors.   

Practice director Sam Lucero said, “Lower operating costs have played a significant part in this ongoing commoditization trend and have forced western module vendors to up their game by moving up the value chain. In addition, the three largest Chinese module vendors are able to leverage the scale of adjacent product offerings.”