There's no question that many wireless operators consider the next growth opportunity to rest with embedded wireless devices. Some operators estimate that by embedding wireless connectivity into all types of devices--from netbooks to ereaders to GPS devices--the wireless industry could reach a penetration rate in the range of 300 percent to 500 percent.
The top tier U.S. wireless operators are actively pursuing the embedded device space--and some are clearly having more success than others. Take a look at the quarterly results of the two largest U.S. carriers and you can see that AT&T Mobility (NYSE:T) appears to be leading in this space. Verizon Wireless (NYSE:VZ) added 264,000 M2M and embedded device connections in the second quarter of the year while AT&T added 896,000 connected devices to its network during the same quarter. According to Ken Hyers, analyst with Technology Business Research, many of AT&T's connected device additions were primarily the result of sales of Amazon Kindle and Barnes & Noble Nook ereaders.
But embedded wireless is a much bigger market than just connected consumer devices such as ereaders and portable navigation gadgets. Machine-to-machine communications--the inclusion 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 like the consumer side, M2M is also seeing an upsurge in growth thanks to interest from specific vertical markets such as healthcare, utilities and the government.
In a separate but related report, ABI said renewed interest from mobile operators in the M2M space, coupled with the widespread deployment of 3G, led it to predict the M2M market will be worth $3.8 billion by 2015.
So with all this momentum in embedded and M2M, what are some of the early device winners in the space? Based on an informal poll of Sprint Nextel (NYSE:S), Verizon Wireless (NYSE:VZ), T-Mobile USA and AT&T Mobility (NYSE:T), FierceWireless came up with the following list of embedded devices we think are interesting and hold great potential. Of course, some have already proven to be big successes, while others are early examples of the potential that this area holds in certain vertical markets. Check out our list here. --Sue