Machine-to-machine (M2M) connections used in the retail industry reached 10.3 million worldwide in 2011, according to a new research report from Berg Insight. For the most part, that means point-of-sale terminals, automated teller machines and ticketing machines are at new locations, where fixed line connectivity is unavailable or impractical.
Vending and parking applications also are key. Berg Insight forecasts that the number of cellular M2M connections in the global retail industry will grow at a compound annual growth rate (CAGR) of 21.6 percent during the next six years to reach 33.2 million connections in 2017.
That is distinct from the “connected device” market, which is sometimes counted in the M2M category. Connected devices are tablets with their own mobile broadband connections, for example.
Shipments of M2M devices for retail applications will at the same time increase at a CAGR of 10.7 percent from 5.2 million units in 2011 to 9.6 million units in 2017. “POS terminals will constitute the lion’s share of cellular M2M connections in the retail sector throughout the forecast period” said Lars Kurkinen, Berg Insight telecom analyst.
“The penetration rate for cellular connectivity is today actually highest in the multi-space parking meter segment where it is well above 30 percent” he added.
Berg Insight expects that the vending machine segment will present a major opportunity for wireless connectivity in the long term, and the study indicates that vending telemetry solutions will be the fastest growing segment over the next six years.
In Europe, the installed base of vending telemetry devices is projected to grow from 75,000 units in 2011 to 324,000 units in 2017.
Similarly, the installed base in North America is projected to increase from 0.25 million units in 2011 to one million units by 2017. “Every vending machine will eventually be connected,” Kurkinen said.
These stats are important as mobile service providers see M2M connections as a major way the industry someday will record mobile penetration at 300 percent to 400 percent, meaning there are three to four mobile data connections in operation for every three to four people.
Connected devices will drive penetration over 100 percent, where it has not already done so, but M2M is the real hope for much-higher penetration.
M2M also is significant because it might b e one of just a handful of key new businesses mobile service providers can build that have potential to contribute significantly to industry revenue.
Edited by Braden Becker