Operators are expected to generate $10bn over the course of 2013 from the machine to machine (M2M) sector. This figure is forecast to increase to $88bn by 2023, according to research firm Analysys Mason.

The firm predicts that SMEs will account for an increasing percentage of total M2M device connections. Excluding connections in the utilities sector, the proportion of SME M2M connections will increase from 14.6 per cent of total connections in 2013 to 24.6 per cent in 2023, representing a CAGR of 33 per cent.

The research firm said that the utilities sector is dominated by large enterprises purchasing M2M solutions and generating a large number of low-revenue connections.

According to the research, many SMEs currently struggle to afford M2M solutions, but this is expected to change over the coming years as as M2M solutions become less expensive to implement at the application layer, and operators and service providers start offering off-the-shelf solutions. The cost of M2M hardware is also expected to fall.

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“We believe operators will find success in selling security and surveillance, some healthcare solutions and some retail sector M2M solutions to SME buyers,” the firm said in a statement.

Analysys Mason also stated that the number of M2M device connections will start to increase in emerging markets by 2015. During this period, developed markets’ share of connections will decline from 68 per cent to 62 per cent as operators in emerging markets seek additional customer connections and the cost of deploying M2M solutions declines.

M2M device connections by size of enterprise, and emerging markets’ share of connections

Source: Analysys Mason