Thursday, 21 July 2011

New report from Machina Research predicts 4.2 billion connected consumer electronics devices by 2020, generating a staggering EUR400 billion revenue

We at Machina Research just published a new report on M2M in the Consumer Electronics Sector. Here's the press release, verbatim. If you'd like more details drop me a line...

New report from Machina Research predicts 4.2 billion connected consumer electronics devices by 2020, generating a staggering EUR400 billion revenue

Increased functionality and energy-cost efficiency will drive the adoption of M2M in consumer electronics markets, and yes, there will also be some connected fridges

[London, UK 21st July 2011]
By 2020 there will be in excess of 4.2 billion M2M connected Consumer Electronic devices in use worldwide, the majority of which will be connected Audio Visual Sources (1.7 billion) and Displays (1.1 billion), primarily driven by consumer demand for web-TV and internet audio-sources. The White Goods market will begin to adopt M2M connectivity towards the end of the decade, as smart metering and pro-active energy management become more prevalent. By 2020 the market for M2M connected consumer electronics will be worth EUR400 billion, with Europe and Emerging Asia Pacific being the largest regional markets. However, with the vast majority of devices likely to be connected by means of short-range technologies, and with some applications being very data-hungry, connected consumer electronics devices are more likely to be a headache for fixed network operators than a revenue opportunity for mobile network operators.

These findings are based on the report Machine-to-Machine (M2M) Communication in Consumer Electronics 2010-20, published today. The report is the third in Machina Research’s series of Connected Intelligence Reports and examines the opportunities for MNOs, fixed line operators and device manufacturers in addressing the rapidly growing market for embedded connectivity in consumer electronics, specifically Audio Visual Sources, Audio Visual Displays, Personal Multimedia, Household Information Devices, White Goods, Network Equipment, Tracking Applications, and Other devices.

Commenting on the findings the report’s author Jim Morrish said “The role that mobile operators, and mobile connectivity standards, might potentially play in the Consumer Electronics market is severely limited by the cost of WWAN embedded modules. Chipsets for Wi-Fi and other short range communications technologies generally contribute under USD 2.50 to Bill of Materials costs, and often less than USD 1.00. By comparison, 3G embedded modules cost of the order of USD30-60, with 4G costing more still, and effectively price the technology out of the highly competitive Consumer Electronics market. If those prices don’t fall, then the mobile industry might just have to sit out the opportunity for M2M connected consumer electronics and stick to already established mobile broadband devices.”

The key findings of the report are as follows:

  • The installed base of M2M connected Consumer Electronics devices will exceed 4.2 billion by 2020. By 2020, North America will be the third largest regional market in terms of device count, representing 21% of the market. Europe will be the largest market, representing 29% of connected Consumer Electronics devices, and Developing Asia Pacific markets will represent 27% of the total device count.

  • The White Goods market will begin to adopt M2M connectivity in the out years of the forecast, as smart metering and pro-active energy management become more prevalent. At the start of the forecast, however, the count of connected devices is dominated by Audio Visual Sources (mostly Computer Gaming Consoles) and Personal Multimedia (mostly Mobile Gaming Consoles).

  • Total traffic generated by M2M applications in Consumer Electronics (and carried over wide area networks) will exceed 700 Exabytes annually by 2020. The vast majority of this traffic (99%) will be generated by web-TV applications, with internet radio generating the buk of the remaining traffic. However, Consumer Electronics applications will generate only approximately 1.6 Petabytes of mobile network traffic by 2020. The majority of this traffic will be generated by a few niche applications, including household Internet Information Devices, digital Photo Frames digital Cameras and Mobile Games Consoles. Tracking Applications (for children and pets) will generate only approaching 0.5 Petabytes of wide area wireless traffic by 2020

  • The total market for M2M connected Consumer Electronics will grow to approaching EUR 400 billion in 2020.
To take advantage of the opportunities in M2M connected consumer electronics, Mobile Network Operators should focus mainly on niche applications such as devices for tracking children and pets, and certain household information devices. As Morrish comments: “The main driver behind the adoption of M2M connected Consumer Electronics devices is the potential for connected devices to offer a better user experience than non-connected equivalents. The second most significant driver behind the adoption of M2M connected Consumer Electronics is the potential for such devices to be more energy-cost efficient by timing periods of heavier power consumption to coincide with periods when electricity is cheaper. But there is no sweet-spot. There is no device for which M2M connectivity can both significantly improve user experience and substantially reduce operating costs.”

Concluding, Morrish commented: “And, yes, many fridges and freezers will one day be connected. But not to tell you what you had for breakfast that morning, or to send you an email that you are running low on milk. The ‘killer apps’ for connected fridge-freezers are ice making and defrost cycles. Both of these functions consume significant amounts of power, and can be easily shifted to times of day when power is cheaper. Connected fridges and freezers won’t be a big market opportunity any time soon, but they will be one day. And, anyway, a better way to monitor your stock levels of various household essentials would be to place RFID-, or barcode-, scanners near household bins. If you really wanted to do that, that is.”

About the report

Machine-to-machine (M2M) Communication in Consumer Electronics 2010-20 provides invaluable qualitative and quantitative analysis of the emerging opportunity for machine-to-machine communications in consumer electronics.

The report reviews the major drivers and barriers for growth of M2M in consumer electronics and analyses the key market dynamics, including how MNOs, fixed operators, service providers and vendors might go about identifying and realising addressable opportunities.

The forecast excel data sheet includes very granular 10 year market forecasts for 54 countries and 6 regions. The forecast covers numbers of connections, traffic and revenue for each of eight applications (Audio Visual Sources, Audio Visual Displays, Personal Multimedia, Household Information Devices, White Goods, Network Equipment, Tracking Applications, and Other devices), based on analysis of twenty-nine underlying device types and with splits by technology (2G, 3G, 4G, short range, MAN, fixed WAN and satellite) and a break-out of mobile traffic revenue. Each application is examined individually with forecast analysis in the accompanying report.

To access a copy of the executive summary, table of contents and a blank sample data sheet or for details on how to purchase the report please contact our sales team.

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