This past year saw wireless connectivity and applications expand in all vertical markets. Looking ahead, a number of drivers and initiatives will continue to increase demand for viable machine-to-machine (M2M) communications solutions. Clearly, the automobile industry is leading the charge and meeting the growing consumer demand for the numerous benefits that come with the “connected car.”

What’s more, automobile manufacturers are taking early steps to stay ahead of new legislative mandates, such as the European eCall standard. This requirement that new vehicles be enabled to make emergency calls and share accident or major incident data by 2015 is projected to ultimately save up to 2500 lives annually. ­In fact, government initiatives are now playing a key role in driving wireless connectivity in a number of markets, and that trend will continue.

Connected Vehicles

In addition to the eCall standard, laws in other countries also are having a major impact on the M2M market. In Brazil, a country with more than 60 million drivers, Resolution 245 requires all new vehicles to be equipped with a tracking device. Similar legislation has been passed in Russia, and there are emerging automated toll collection projects based on wireless connectivity underway in countries like the Czech Republic and Hungary, with other countries soon to follow suit.

When these auto legislative measures are viewed in light of numerous other government initiatives being implemented, such as a French law that will require over a million trucks to be equipped with cellular and GPS connectivity to meet a new per-kilometer “Eco-tax,” the emerging scope of the vehicle-based M2M market becomes enormous.

The connected car is really about employing technology to enhance driver convenience, safety, security, and real-time monitoring of vehicle performance, and that’s driving both governments and manufacturers. And as embedded modules become less costly and more prevalent in automobiles, consumers will be looking for connected cars that can deliver high-valued wireless services that meet their needs.

For example, Peugeot Citroen drivers now have a 3G USB key that powers its Connect Apps system. The key incorporates 3G wireless connectivity, GPS positioning, and advance processing capabilities. It also enables touchscreen access to the Peugeot Connect Apps service, operated by Bouygues Telecom. Drivers access real-time traffic, weather and navigation information, and details about parking, fuel stations, hotels, restaurants, tourist attractions, and other services.

Whether connectivity is mandated or driven by customer demand, the connected car enables a variety of services, such as vehicle assistance services, location-aware applications, and infotainment, which is leading automobile manufacturers to incorporate wireless communications into most models. Manufacturers will continue to seek out reliable wireless connectivity to cellular networks while looking for wireless technology solutions that minimize total cost of ownership, from production to customer service.

Projections indicate that by 2015 more than 20% of cars sold will include an embedded solution, with over 50% offering connectivity when factoring in the integration of mobile devices. Meeting this demand requires innovative technology to further bolster cloud-based application development and management tools, which are the only definitive means to address M2M deployments of such magnitude.

Smart Grid, Smart Home, Smart City

M2M connectivity to the home will continue to be driven both by smart metering programs and high-speed, broadband home networking that will utilize newly deployed LTE 4G cellular networks. ABI Research expects about 212 million smart meters to be deployed worldwide by 2014, while European Union member nations are required to have smart meters across 80% of their metering infrastructures by 2020. In addition to infotainment, just about any functional device within a household has the potential for home networking.

These two sectors combined represent a significant market for M2M in the coming year and for many years to come. Wireless connectivity to create smart utility grids and smart energy environments will allow suppliers to better manage demand, while providing consumers usage details that will help them reduce waste and save money. Smart metering also benefits end customers by reducing carbon emissions, improving service reliability and improving customer service and responsiveness.

To make these benefits a reality, utilities need a secure and flexible two-way communications infrastructure to connect and communicate with smart meters. While several options are available, cellular wireless wide-area network (WAN) technologies will undoubtedly play an integral role establishing and managing the devices that will be instrumental for these smart deployments to be established economically and easily upgraded as they expand.

A Big Year Ahead

All in all, 2013 should be a pivotal year and one of significant growth for M2M as companies address both consumer demands for full-time connectivity and the government initiatives that support greater mobile connectivity. This is an exciting time for all involved in the M2M space. On the supplier side, we will continue to see technological advances that will help drive even more cost effective and efficient cloud-based M2M deployments worldwide.