The growth of machine-to-machine communications will force test-equipment manufacturers to develop new equipment, particularly for installation and maintenance.
The global M2M (machine-to-machine) communications test Equipment market is expected to reach $321.7 million in revenue in 2013. As M2M adoption is increasing across many vertical market segments, such as smart homes, electronics, and healthcare sectors, the demand for M2M test equipment will increase and the market is forecasted to exceed $980.0 million by 2020, growing with a CAGR of 17.3% from 2013 to 2020.
The M2M communications testing market varies in terms of end-user applications. As a matter of fact, at the moment, there is no specific M2M test equipment in the R&D and manufacturing space. As such, in the R&D and manufacturing space, there will be wireless test beds and one-box testers for all of the different cellular connectivity standards, which will be applied in a similar way in the M2M communications testing market.
The market for M2M communications test equipment is expected to grow. Installation and maintenance test equipment will make up the bulk of the growth.
There will be distinct market sizing potential for installation and maintenance (I&M) or monitoring equipment because of the platform factor. Test equipment manufacturers are expected to offer more handheld products such as spectrum analyzers related to M2M in the I&M space.
Frost & Sullivan forecasts that there will be multiple opportunities for satellite-based communications within geographically challenging areas for offshore drilling monitoring, particularly in areas where there is no cellular coverage.
The important part of M2M interaction among devices is the compatibility. If M2M devices are developed, manufacturers must ensure that they are getting as much support from the other participants in the value chain. Because of certain protocols, there is a concern over power consumption and battery life of devices. Because an increase in bandwidth can also increase power consumption, design tradeoffs must be created and long term deployments, as well the device performance and battery life should be taken into consideration. Such design issues in the network and products for M2M communications create a demand for test equipment.
M2M technology has advanced in many ways so that different segments of the market are connected to each other by some sort of communication channel. For example, vehicle-to-vehicle communication is a growing reality in traffic management. Similarly, building automation has been widely adopted. The challenge still lies, however, with connecting these different fragments. OEMs are struggling to connect the cellular and non-cellular worlds and find the appropriate vendors for intertwining the fragments. Test equipment providers face challenges for providing equipment which could work across various applications.
M2M is currently at an inflection point, which means a rapid growth is expected in the next two to three years. At this time, it's difficult to estimate the number of devices that will be connected over that period. In addition, the data transmission over cellular networks may cause a huge amount of traffic congestion, causing a significant drop in reliability. Due to high data traffic, monitoring the network is of utmost importance. Test equipment providers need to cater to such changed requirements.