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Sept. 23, 2013: i3

Connecting the World One Machine at a Time

Today, consumers want a unified CE experience, where the majority of their devices connect to the Internet and also support an interface to their smartphone and tablet applications, or even run these apps natively. But beyond this trend toward convergence, a new range of products is emerging that can connect to the Internet and also to each other—often referred to as the Internet of Things. These devices build a scalable range of "smart" solutions with different levels of processing and connectivity. This product category is expected to soar to more than 350 million cellular connections by 2016, according to the Global Wireless M2M Market report by Berg Insight.

This phenomenon called M2M (machine-to-machine) communications will change not just the way we interact with the CE products around us, but also how these products communicate with each other.

Technical and Business Challenges

The M2M market has huge growth potential. For example, Ericsson estimates 50 billion devices will be connected to the Internet by 2020, while Machina Research predicts a promising $948 billion M2M market in the same timeframe. However, technical challenges and business concerns still need to be addressed, including supported standards. A variety of wireless and wireline standards look promising. Companies are pushing either established players like IEEE 802.11, Bluetooth, Zigbee and Z-wave or creating new proprietary solutions to suit their connectivity requirements. One proprietary example is EnOcean, a patented self-powered wireless technology that uses miniaturized energy converters like linear motion and thermal converters or solar cells to supply electrical energy to ultra-low power devices.

Taking the route of adopting an existing standard might look like a faster path to market for M2M devices, but the already overloaded infrastructure and its potential inability to support this swarm of new devices must be considered. By design, wired connections simply cannot cope with the vast number of CE devices. This leaves wireless as the path forward. However, not all wireless standards have the range and coverage needed for M2M applications. The ones that do (particularly, mobile communication technology such as 3G and 4G LTE ) are too expensive to deploy at such a large scale due to the huge investment in the underlying infrastructure that is required. Further, baseband receivers typically don't fit the power budget of an ultra-low power embedded application.

Companies looking at developing their own standards risk being locked out of developer ecosystems and must ensure conformance testing and pass region-specific regulatory hurdles. In addition, creating and growing a proprietary, closed ecosystem requires a powerful integrator that can galvanize the industry into adopting these solutions. There are currently no major M2M players, as most companies are still focusing on particular sectors of the market, while others are preparing for the right time and place to join the party.

A number of M2M-focused governmental bodies and organizations have been created to tackle standardization and promote wider ecosystem adoption. The European Telecommunications Standards Institute (ETSI) TC M2M committee seeks to produce telecommunications standards that will be used throughout Europe and beyond, while the Chinese government has created a working group for sensor network standards under the China National Information Technology Standardization Committee. In the U.S., the Telecommunications Industry Association's (TIA's) TR-50 Smart Device Communications Engineering Committee has been tasked with the development and maintenance of access agnostic interface standards for the monitoring and bi-directional communication of events and information between smart devices and other devices, applications or networks.

But even with all these standards and organizations to promote them, there are still issues to be tackled such as business models, competitive pricing, co-marketing and multiple points of sale, and potential challenges when drafting user terms and conditions that conform to worldwide privacy and regulations.

Key Drivers: Greed is Good

Ultimately, businesses need to be profitable to succeed. M2M is shaping up to be an important source of greater operational efficiency and incremental revenues for industry players, including semiconductor IP and telecommunications companies, silicon vendors, ODMs and OEMs.

M2M is a way for mobile operators to scale and expand their data service offerings beyond smartphones and tablets.

Network providers can build on an existing infrastructure to deliver a wider rollout of 3G and LTE technologies to developed and emerging economies—the regions where M2M is likely to build momentum first. The "always-on" connectivity and increased bandwidth of new 4G LTE networks can then be leveraged by the M2M segment and expanded into automotive, healthcare and smart buildings.

This will enable companies that provide operations and business support systems to monetize M2M operations as their telco revenues shrink. Application developers will be another group who can expect to see immediate profit increases. Provided a degree of commonality is reached between operating systems and APIs (application programming interfaces), developers will port applications between multiple devices to ensure a common, unified experience.

The M2M market will be driven by consumers who will want easy-to-use software that translates all of this data into meaningful information displayed on multimedia-rich devices. A product that cannot interact with or connect to first-tier CE devices like smartphones, tablets and smart TVs, will be perceived as inferior compared to the complete app experience provided by their smart connected devices.

Solutions: There's a Way

A key factor for the rapid growth of the M2M market is the co-development of hardware and software platforms that work well together. The sheer volume of new devices jumping on the network means these systems need to be heavily optimized for high-efficiency to reduce data traffic and power consumption. But power-efficient hardware needs feature-rich software that can provide and drive the interface with end users or other devices. So governments are encouraging more companies to develop and adopt open API standards to allow ecosystem growth (similar to mobile) and avoid the situation where too many variations of the same technology create extreme fragmentation and overcrowd the frequency spectrum.

Nobody likes simplistic world views that offer limited choice or configurability. That is why there must be a multi-layered hardware and software security strategy covering both companies and customers who do not always like sharing data—especially when they are obliged to.

Partnerships in the M2M market will be created around technology enablement, and the companies that succeed will bring believable channels to market. A good example of building the underlying technology to enable communication between companies is Imagination's Flow cloud platform. It supports collaboration between corporate and consumer clients or individualization on a per-brand or per-customer basis. Companies that license the platform can interact with and co-promote certain products or, conversely, can choose to be separate from other brands to preserve their own identity. Such technologies minimize the resources required to make a product fully connected, by providing the complete package of connected CE devices, APIs, a flexible portal and secure and robust services.

"The M2M market will be driven by consumers who will want easy-to-use software that translates all of this data into meaningful information displayed on multimedia-rich devices."

To succeed and differentiate, embedded platforms for the Internet of Things must have highly-integrated connectivity, and support cloud/portal technologies that implement tightly integrated Wi-Fi functionality, ready-made baseline and value-added Internet services. Solutions supported by a rich and growing set of middleware and tools enables partners to quickly deploy them across a range of low-cost applications such as networking, audio processing, human interfaces and general-purpose embedded control.

What Does it Mean?

The broad array of highly portable applications platforms means that companies are evaluating how best to create the next wave of connected, embedded products. The rise of Internet-based data has dramatically increased the information available to shape consumers' decision-making processes, empowering a two-way relationship that brings benefits to both users and businesses.

By carefully managing this relationship and market trends, the CE industry has an opportunity to shape its products in a way that allows them to take the Internet of Things beyond its conceptual phase and deploy these technologies across all consumer, industrial and enterprise segments.

Alexandru Voica is technology PR executive and Kevin Kitagawa is director of marketing for software technologies and emerging markets for Imagination Technologies Group plc.

Return to: 2013 Feature Stories