M2M & Telematics A market opportunity M2M System Telematics Consultants

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  • M2M & Telematics A market opportunity M2M System Telematics Consultants
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  • Lars Odln MSc, MBA 20 years in product & process development 8 years of wireless M2M Led M2M developments in several industries Extensive international business experience M 2 M System Telematics Consultancy
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  • What happens in the wireless world ? M2M System Telematics Consultants
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  • Voice market saturates M2M System Telematics Consultants
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  • Churn increases M2M System Telematics Consultants
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  • ARPU decreases M2M System Telematics Consultants
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  • 3G mobile-phone woes The introduction of third-generation faces technical and financial difficulties. M2M System Telematics Consultants
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  • Pass the painkillers DO MOBILE phones cause headaches? In the case of third-generation (3G) telephones, the answer is undoubtedly yeseven though nobody is yet using them. Instead, they are causing technical and financial pain for all the companies around the world that are trying to build 3G networks. The idea behind 3G was to offer subscribers exciting new features, such as video clips and high-speed Internet access, for which they would be prepared to pay far more than they now do. Operators have spent vast sumsaround $125 billion in Europe alonebuying licences to enable them to offer such services (see chart), and have run up huge debts in the process. Building the networks will cost about the same again. It is a huge gambleand one that is looking riskier by the minute. This has serious financial repercussions. Given the expense of the 3G licences and infrastructure, the operators want to launch their services and start generating revenue as quickly as possible. But the uncertainty has hit their share prices; and the debt burden has led to cuts in their credit ratings that have made it harder for them to raise money. Britains BT, for instance, was forced to sell prized Japanese and Spanish assets to Vodafone this week, to reduce the massive debts it incurred when buying 3G licences. BT, whose long-serving chairman, Sir Iain Vallance, stood down last week, now plans a huge rights issue that may further upset its long-suffering shareholders. Worse even than these cash travails, the initial projections of how much operators could expect to charge for 3G services now look highly optimistic. It has become clear that 3G will take far longer than expected to become profitable, so operators will sink deeper into debt along the way. Amid all this uncertainty, it is clear that it will be several painful years, rather than months, before 3G becomes widely available. Even if the operators can meet their debt burdens and build the networks, it is not at all certain that they will be able to make much money from them. Todays headaches might then seem mild compared with those that are to come.
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  • What the future might hold No market growth SOW (Share of wallet) not increasing All playes offer same Mobile communication becomes a comodity Mobile com just another utility Customers wants more for less Technology migration require heavy investments ARPU likely to decrease M2M System Telematics Consultants
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  • When the future looks uncertain, why not rely on the past - You have a GSM network - You have spare capacity M2M System Telematics Consultants
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  • Additional revenues Now Without investment Without cost Without investments M2M System Telematics Consultants
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  • Your future subscribers might not be persons, but machines Telematics M2M System Telematics Consultants
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  • By 2005 there will be more machines communicating than people NTT DOCOMO President Keiji Tachikawa For the UK market this equals +100 million per annum, at almost no marginal cost (1p/msg, 200 msg/yr) M2M System Telematics Consultants There is a finite number of people but An ever growing number of machines
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  • growth in machines % of devices that will be communications enabled Source : Merrill Lynch, June 2000 M2M System Telematics Consultants
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  • total projected market Voice Telemetry & Telematics Data penetration 41% 57% 72% 93% 118% 142% 171% 284% M2M System Telematics Consultants
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  • recognising the opportunity within the next ten years, telemetry in its various guises will reach into all areas of industry i.e. food, retail, leisure engineering and transport invasive as mobile voice currently is today Eventually everything will be connected M2M System Telematics Consultants
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  • a glimpse into the future telecom will pervade all aspects of life human to human human to machine machine to machine machine to human communication interaction transaction control building the connected world M2M System Telematics Consultants
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  • What is Telematics The fourth phase of the IT revolution All devices communicate Geography becomes irrelevant Enables Business in real time A Productivity driver Drives re-engineering and new business models A new tool for mankind M2M System Telematics Consultants
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  • Computing End to End Wireless Telemetry solutions Internet Wireless Source Ericsson
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  • Three phases of wireless Step one (in progress) Extending existing systems and processes to the field. Nissan saves 40% on sales costs by giving wireless access to pricing and inventory. HBOC (drugs) reduced incorrect shipments by 80% through wireless in their warehouses Step 2 (in development) Re-engineering business. NTT DoCoMo increased vending operators profits 70% by introducing Cashless Payment. Teclion saved 50% of service visits by remote monitoring. Step three (tomorrow) Creation of new business models that would not have been possible without wireless
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  • Understanding the market End customers Intermediary Competitors Environment Economics Understanding the application Value chains Players Change drivers Enablers Technical requirements Sounds great, but how do we get to making money M2M System Telematics Consultants
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  • understanding who has to be involved It's like a team It's like a team the different players and the interaction between them is referred to as "the value chain" the different players and the interaction between them is referred to as "the value chain" M2M System Telematics Consultants
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  • the value chain supplier systems integrator service supplier network operator end user M2M System Telematics Consultants
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  • the value chain it's very complex many interested parties a lack of standards specialists and ways of working are specific to particular vertical markets however overall framework is similar in all markets M2M System Telematics Consultants
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  • What can an operator do? Help others play !
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  • Competitors Vending Security Automotive Automation Utilities M2M System Telematics Consultants
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  • Opportunity Vending Security Automotive Automation Utilities Generic middleware platform M2M System Telematics Consultants
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  • Business model step 1 End customers in various vertical markets Operator Solutions and applications providers Trough SI /AP M2M System Telematics Consultants
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  • Business model step 2 End customers in various vertical markets Operator Partners The telematics wrapper M2M System Telematics Consultants
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  • M2M System Telematics Consultants Telematics means New customers Substantial volume growth Low investment Low uppkeep High profit segment Low churn Broadening of Brand name
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  • CASES Cases M2M System Telematics Consultants
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  • Case Operator M2M System Telematics Consultants
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  • M2M System Telematics Consultants M2M System Telematics Consultants M2M System Telematics Consultants M2M System Telematics Consultants
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  • Developing a telemetry managed solution M2M System Telematics Consultants
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  • What is the Orange Managed Solution? An end to end process for developing a new system A Gateway to simplify the technical connection A single point for customer support Not restricted to a specific market Overview M2M System Telematics Consultants
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  • Components DeviceModemManaged GatewaySoftware Measures Reads Controls Remote Moving Fixed Existing New GSM Radio Access Uses SMS GPRS and 3G in the future? Connects applications to a telemetry devices Converts SMS messages to XML Buffers Data Internet Accessible Operated and Managed for Orange Customer Specific Back-end System May be an ASP ERP Records Controls Co-ordinates M2M System Telematics Consultants
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  • Parties Device Integrator Connects the Device to the Orange Managed Gateway using a GSM Modem System Integrator Connects the Customers Computer System to Orange Network using the Managed Gateway and the Internet DeviceModemManaged GatewaySoftware M2M System