Is embedded wireless the new M2M?

Machine-to-machine communications--the outfitting of wireless modules in equipment such as utility meters or soft drink dispensers so that companies can track usage and performance--has been around for a number of years. And while M2M applications have been touted for their consistent revenue and low-churn, they haven't really garnered much attention from the operators or the industry.  

At least until now. Operators like Verizon Wireless and AT&T are suddenly devoting resources and personnel to this burgeoning area that most are referring to as "embedded wireless" or "embedded devices." Similar to how MVNO (mobile virtual network operator) became the much sexier term for wireless reseller in 2002 and 2003, I'm getting the impression that "embedded wireless" is the new hotter version of what we used to call M2M.

The reason for all the focus from the operators is three-fold--wireless modules are dropping in price, wireless broadband networks are pervasive and the provisioning costs are declining. Recently I spoke with Cindy Patterson, executive vice president of sales and marketing at Jasper Wireless, which handles the automated provisioning of these types of devices, and she said that wireless modules that once cost around $50 per module are now dropping to as low as $18 to $20 per module. Likewise, provisioning costs have dropped to about $2.50 per device. Getting the module and provisioning costs down to these levels are necessary to spark the attention of the operator because they will probably only see about $5 per month in revenue from most embedded modules (depending on the usage and application).

Patterson's vision echoes what I'm hearing from other players in this space. Embedded wireless modules could be incorporated into personal navigation devices, automobiles, appliances and more. The challenge now is to put together all the different players and come up with a compelling business plan and a distribution channel. For more on this topic, check out my colleague Jim Barthold's article here. --Sue

P.S. Check out the FierceWireless Holiday Handset Guide-- a compilation of all the handsets that U.S. operators will be featuring during the upcoming buying season. In the second of this two-part series, we look the high-end handsets.