One issue when analyzing the “machine to machine” communications business is that definitions of what constitutes an “M2M” service vary quite significantly. Some service providers consider mobile broadband connections to “non-voice” devices, such as tablets, to be “M2M” connections. Some would say that those are examples of “connected devices,” but not truly “M2M.”
Others define M2M as business-to-business telemetry and other apps where a human being is not the user of either devices on the ends of a connection. In other words, a wireless meter reader or heart monitor would be an example of M2M, but a connected iPad would not be an instance of M2M.
“Much confusion exists around what makes up M2M,” says James Brehm, Compass Intelligence senior strategist. “In defining the market, the GSMA includes devices like connected iPads and other media tablets, some tier-one mobile network operators include connected consumer electronics like picture frames, personal navigation devices, and the like, while others look solely to B2B applications,” says Brehm.
Those definitions matter for any observer trying to track the growth of M2M revenues. Some observers would say M2M in the “B2B” sense is more important than connected tablets and photo frames as it represents an entirely new category of mobile services, where connected tablets are an extension of today’s PC dongle business.
Some might prefer to track all non-phone revenues in a separate category than “phone” revenues for reasons of impact on average revenue per user. Most use cases within the broader M2M revenue category will involve connections with far less ARPU than phone connections generally represent.
But the caution is that using the broader definition, as the GSM does, inevitably will provide one view of how big the M2M business is. Using the narrower definitions will provide a different sense of market growth.
For the moment, it appears observers will have to guess at the revenue contributions made by tablet subscriptions, GPS devices and e-readers, as one category, from M2M revenue generated solely by telemetry and other B2b applications that many consider the core of the M2M revenue opportunity.
Of course, some might argue there is a clear “political” reason why the GSM and others choose the broader definition of M2M. It is easier to show revenue and category growth when using the broader definition. Executives will be anxious to demonstrate that they are gaining significant new revenue from M2M, which is among a handful of big growth opportunities for mobile service providers.