section 2: business case for m2m - cdma2000 · 2 • optimizing m2m services on cdma2000 networks...

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Section 2: Business Case for M2M

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Page 1: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

1 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

Section 2: Business Case for M2M

Page 2: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

Examine how module price curves are benefiting the M2M market

List various user types in the e-Health vertical

Describe the number of players that have an opportunity in e-Health

Illustrate how the dynamics have changed in M2M

List ten things you should know about M2M for 2011 and beyond

Section Objectives

Page 3: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

3 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

M2M Business Benefits M2M solutions deliver many compelling benefits

Measures that drive investments in M2M vary greatly across

different industries and applications

Source: Harbor Research, Inc., September 2010

Page 4: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

4 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

M2M Module Price Comparison CDMA2000 1X modules are becoming more price competitive

The market for CDMA2000 modules has been characterized

by falling prices over the past few years

Source: Harbor Research, Inc., September 2010

Page 5: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

5 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

Identifying the Potential of the e-Health Vertical

User types:

– Personal fitness/health

– Worried wells

– Telemedicine

– First responders

– Connected medical environments

– Remote monitoring

– Assisted living

– Trials

These user types are projected

to have roughly 774 million

connected devices by 2020

M2M connections by service type 2010 to 2020

Source: Machina Research

Page 6: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

6 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

WAN Dominates the Wireless Connection Space

Mobile networks are expected to host roughly 86 million connections

– Fixed installations are usually short

range to a home hub

– Greater demand for mobility, faster

data speeds and remote monitoring

M2M wide area connections by technology 2010 to 2020

Source: Machina Research

Page 7: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

7 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

MNOs to Realize Revenues in the Billions

M2M mobile traffic revenues by service type

2010 to 2020

Source: Machina Research

Page 8: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

8 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

e-Health is a Good Opportunity for Many Players

M2M mobile traffic revenues by M2M player

2010 to 2020

Source: Machina Research

Page 9: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

9 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

New Dynamics for M2M (1 of 3)

Mobile Telephony M2M

User Individuals Machines

Key success factor Price, coverage Transparency

Usage Mobile Often fixed

Traffic volumes Significant Typically low

Timeliness Time critical Often non time-critical

Reliability Best efforts Often mission critical

Sale B2C, B2B B2B2C, B2B, B2C

Page 10: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

10 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

New Dynamics for M2M (2 of 3)

Mobile Telephony M2M

Payment Pre-pay, post-pay subscriptions Multiple approaches

Connection

volumes Significant

Expected to be enormous

Estimated at 50 billion by 2015

Activation At point of sale Multiple possibilities, depending on

payment approach

Activity period

Typically 30/ 60/ 90 days for pre-pay

During contract period for post-pay

Device connectivity may not be used for 1 to 2 years

Device may need to be remotely activated

Complaints Users complain if there are problems Problems must be detected remotely

Device

management

Users manage devices, potentially including rebooting

Devices must often be controlled, and problems diagnosed, remotely

ARPU $20 to 28 Low, often $0.75

Page 11: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

11 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

New Dynamics for M2M (3 of 3)

Mobile Telephony M2M

Switching providers User either purchases a new handset, or unlocks

phone

Potentially involves a module swap or remote provisioning

Network usage Some badly written

applications are inefficient

Potential for very high signalling volumes

Network technologies Users upgrade devices in step with network

technologies

Network switch off could be an issue within the expected lifetime of certain devices

Page 12: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

12 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

Top 10 things you need to know about M2M for

2011 and beyond (1-5)

1. The total opportunity will be huge

2. Addressing the opportunity requires tailored solutions

3. Impossible for one company to serve all verticals:

partnerships will abound

4. Traffic: M2M (generally) does not need new, high

capacity networks

5. QoS guarantees may be pre-requisite for some

industrial applications

Page 13: Section 2: Business Case for M2M - CDMA2000 · 2 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • Examine how module price curves are benefiting the M2M market

13 • Optimizing M2M Services on CDMA2000 Networks • October 11, 2011 • www.cdg.org

Top 10 things you need to know about M2M for

2011 and beyond (6-10)

6. Energy and e-Health are the targets for investment

7. Distribution channels, billing, brand, etc. are all

significant assets for MNOs

8. MNOs can increase margins with network capabilities

9. Revenues for a wide range of industry players

10.The industry is in a period of disruption