The Internet of Things (sometimes known as machine-to-machine communications) will represent technology and services revenues of $4.8 trillion in 2012 and $8.9 trillion by 2020, growing at a compound annual rate of 7.9 percent, globally, according to IDC.
IDC expects the installed base of the Internet of Things will include 212 billion "things" globally by the end of 2020.
Others think that figure is wildly inflated, and might suggest 50 billion connected devices, including PCs, smart phones and tablets, might be connected by 2020. That is the problem with such forecasts, which mix machine to machine (sensor apps) instances with devices people use (PCs, smart phones, tablets, game players).
Simply conflating consumer devices using the Internet with machines using the Internet confuses the issue. For one thing, service provider revenues are likely to be quite distinct when providing communication and other services to humans, and when providing enterprise customers with support for their sensor devices and networks.
The IDC forecast includes 30.1 billion "connected (autonomous) things" in 2020, consisting of sensors for intelligent systems that collect data.
With the caveat that many analysts and observers consider mobile Internet connections for tablets to be “machine to machine” connections, or part of the “Internet of Things” revenue segment, there is a reason “connected car” and M2M services appeal to mobile service provider entities, namely the sales model.
As is the case for communications service sales to large multinational enterprises, compared to consumers, the size of opportunities, and sales process, arguably are “easier” when selling solutions to business partners (enterprises) who then package services for actual sale to end users.
In other words, M2M and connected car sales are more akin to wholesale operations than retail operations, and more like enterprise sales efforts than retail sales.
Where enterprise sales can efficiently be conducted using in-house sales forces, consumer sales normally are handled by channel partners and retail operations. In the former case, a relatively small number of prospects exist. In the latter case, many millions of prospects exist, and cannot be marketed in the same way as an enterprise or wholesale account.
In other words, the potential revenue return from providing connected car services directly to General Motors outweighs the revenue return from selling connected car services to individual end users, one at a time.
More than 20 percent of vehicles sold worldwide in 2015 will include embedded connectivity solutions, the GSM Association suggests.
More than 50 percent of vehicles sold globally in 2015 will be connected, while every new car sold will be connected in multiple ways by 2025, a study conducted for GSMA now suggests.
Connected car services will constitute a €24.5 billion revenue stream, based only on in-vehicle services, such as traffic information, call center support and web-based entertainment (up from €9.3 billion in 2012).
Perhaps €4.1 billion will be earned providing connectivity, such as mobile data traffic (up from €814 million in 2012).
The study by SBD predicts 10 million cars sold in 2018 will be fitted with tethered solutions (nine percent penetration), up from 2.6 million cars in 2012.
In revenue terms, embedded systems are likely to dominate the sector over the next
five years. They will account for almost 83 percent of the revenues generated by connected cars in 2018. Tethered systems are set to generate 10 percent of the revenues and smart phone integration systems the remaining seven percent of revenue.
