MENA M2M market seen at over US$2B by 2016

The truth is, connected devices are possible because of machine-to-machine (M2M) communications - which use wireless data networks, sensors, software to conduct remote monitoring, measurement and condition recording, in-field data collection, and other sophisticated processes. This eliminates manual, time-consuming work and minimizes human intervention. The connection of passenger cars to the Internet is the next digital wave and so, unsurprisingly, the M2M market is expanding rapidly. In the Middle East and North Africa (MENA) region, it is estimated to reach over $2 billion by 2016, representing 6.1 percent of the global M2M market, driven mainly by the demand of new vertical services. Automotive M2M services are expected to have a large share of this new revenue by 2016, with 12 million automotive M2M connections, up from just three million in 2012. Such rapid growth presents companies with a unique opportunity.
"To successfully enter the market, however, they must develop the right business model, and partnerships to provide the end-to-end innovative services that consumers and businesses expect," said Bahjat El-Darwiche, a Partner with Booz & Company. "In particular, telecom companies will need to determine their growth strategy based on their core capabilities and their positioning in the overall M2M ecosystem."
He added "they will have to develop right-to-win capabilities including vertical innovation, solutions development and management, end-to-end horizontal platforms, and commercialization. Some of these capabilities can be achieved through internal development, while others may require acquisitions or creating collaborative business partnerships of a kind that are very different to the contractual relationships that currently exist."
By building these capabilities, telecom companies will be able to deliver on the two sets of services required by connected cars: core and value added.
Core services include fleet management, usage-based insurance, driver intelligence, and road tolling. Value-added services include driving and green reports, navigation and mapping, remote vehicle diagnostic, weather and traffic reporting, and social media connectivity.
Within the automotive industry, M2M's potential is considerable; after all, in this day and age, safety and assistance systems are increasingly becoming standard in every vehicle. Indeed, thanks to mobile Internet connections, automobiles can now inform drivers in real-time about dangerous spots and accident sites. And, in the future, this technology will further assist the driver in reaching his destination in a safe manner. In fact, according to a Connected Car 2013 study conducted by engineers at management consulting firm Booz & Company - in collaboration with the Center of Automotive Management - by 2015, car manufacturers worldwide would have generated 19 billion euros thanks to connected safety features and safe driving components.

By 2020, the automotive industry's connected safety features and safe driving components are set to generate up to 49 billion euros in global sales volume. In addition, according to Booz & Company's study, China and the US will lead the sales markets for OEMs with integrated Connected-Car products. In parallel, the analysis reveals that growth will occur particularly between 2015 and 2020 - driven by the product segments "Safety" and "Driver Assistance".

© The Saudi Gazette 2013

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