In 2010, Machine-to-Machine (M2M) communication represents a promising market with a worldwide CAGR of 17% (Detecon Analysis 2010-2014). Several mobile network operators as well as other players in the telecommunications market have already taken advantage of it.

Beside recent developments, M2M has already been expected to be one of the most promising markets three years ago. When market reality failed to match the expectations, the industry went quiet and seemed to disappear – until today. We ­analysed what went wrong in the past and what lessons were learned, in order to better understand how to benefit from M2M growth potential today.

Several issues which were problems in the past can be overcome today. For example, in the past every market player tried to build its own M2M business without thinking about possible alliances, or it didn’t concentrate on the specific areas where it would provide M2M applications. In many cases the roles and participants of the overall M2M value chain were not clearly defined. Furthermore, companies were struggling to build an efficient organization model for the tiny but growing market. The bottom line is that the M2M ecosystem was not mature enough for sustainable business models to be developed.

Today, based on a number of assignments in M2M topics worldwide, we identify a large number of existing and up­coming application scenarios for different industries. Based on a wide variety of applications covering specific industries, we conclude that the task of delivering these applications can not be solely handled by a single market participant (e.g. mobile network operator). Only a common strategy between the market participants guarantees a successful business opportunity (smart partnering). First signs of consolidation can already be recognized. In 2009 AT&T and Jasper Wireless signed an agreement to develop M2M devices jointly in order to bring consumer electronics and M2M wireless networks together. Based on this experience in 2010 AT&T, Telcel, America Movil, KPN and Rogers set up a hub for developer in the area of M2M communication electronics.