1. 9/9/11

2. Hyper Connectivity: Billions of Connected Devices in 2020
“There will be no limit on the number of connections as part of the mobile grid. Everything has the potential to be connected .. Call it the 100 percent ceiling.”
– CEO Verizon

3. Wireless Connected Devices Ecosystem
Feature Phones
Smartphones
Mobile Computers
Tablets
M2M
Notebooks
Netbooks
Air Cards
MiFi
Consumer Electronics
Transportation & Telematics
Financial Services & Retail
Healthcare /Wellness
Smart Grid, Utilities, Industrial
Security & Home/Building Automation
Others
eReaders
Vehicle Convenience, Safety, & Diagnostics
POS Terminal Solutions
Wireless Patient Monitoring
Smart Metering, Smart Grid, Utility Routers
Intrusion Detection & Safety Systems
Business Apps
Connected Display, Navigation, Gaming
GPS & Fleet Tracking
Vending Machines, ATM, Kiosks
Patient Care & Scheduling
Remote Telemetry, SCADA
Remote Surveillance, Access Control, Building Automation
Miscellaneous Systems
Source: Frost & Sullivan.

4. Cellular M2M Communications - Market Forecasts
M2M connections on cellular networks in North America to approach million in These figures do not include laptops, netbooks, notebooks and tablets, which would be in tens of millions as well(around 50 million) .
Source: Frost & Sullivan.

5. Key Market Realities in M2M (Past , Present and the Future)
Market Adoption
Service & Support
Requirements
ARPU
Bandwidth Consumption
3G/4G Usage
Medium
High
Low
Source: Frost & Sullivan.

6. Senior Industry Analyst, Frost & Sullivan
Conclusions
Exceptional growth expected in the global M2M communications market.
Virtually all segments of the value chain need to work hard to maximize the M2M opportunity.
Ease of deployment ,and ease of management of existing implantations will be the key to achieving long-term success in this market.
Frost & Sullivan believes that eventually, both direct connections and revenues from M2M could become larger than traditional mobile phone business in several regions of the world, including North America – this could take years.
Vikrant Gandhi
Senior Industry Analyst, Frost & Sullivan

8. About Compass Intelligence
Compass Intelligence, a global consulting and market analytics firm, specializes in segment and vertical market intelligence for the high-tech and telecom industries; and offers clients a tailored research experience through excellent customer support. Compass Intelligence provides subscriptions and research reports, insight videos, forecasts, competitive analysis, market data and expert recommendations on multiple markets.
Find us on  follow us on Twitter(

9. If M2M was a Baseball Game, What inning are we in?
A couple years ago, I got a call from a reporter from the San Antonio Express News. Evidently the sports reporter was filling in for the technology reporter when he asked:

10. Spring Training!

11. Why?
Lack of ubiquitous wireless…lack of high speed for things like video
Lack of standards
Competition instead of coopetition
No innovation centers

12. Market or Revenue Growth Cost Reduction
Why deploy M2M?
There are only 2 reasons to deploy m2m….to make money or to save money!
Market or Revenue Growth Cost Reduction

13. How big is the market opportunity?
As an industry, we’re still determining the TAM.

14. Quotes
“Soon, there will be more than one trillion connected devices…” IBM TV Commercial
“…there will be 50 Billion connected devices by 2020.” Hans Vestberg, CEO of Ericsson
“In this model, there is literally no limit on the number of connections that can be part of the mobile grid: cars, appliances, buildings, roads, sensors, medical monitors and someday even inventories on supermarket shelves. All of these have the potential to become inherently intelligent — perpetually connected nodes on the mobile web.” Ivan Seidenberg, CEO of Verizon
“When you look at the numbers between M2M and social networking companies, LinkedIn counts as its market every professional on the planet; that’s 1 billion people. Facebook is a little bit more ambitious, it counts as a potential customer over 2 billion internet users and counting. But if you look at M2M, we have a market which consists of over 7 trillion machines…” Dale Calder, Founder of Axeda
“Once you embed it [wireless M2M application] in a business process, for example, customers are probably not going to rip you [out] when your annual contract is up.” Danny Bowman, Sprint Nextel Corp
We as an industry are still trying to figure out a TAM for the market….15 billion, 50 billion, 1 trillion, 17 trillion…..
Some of the largest companies aren’t sure
The value of the network is proportional to the square of the number of users of a network. Metcalf’s Law
All value is created from the use of the network. A connected device, by itself is useless.

15. U.S. Next-Generation M2M and Connected Device Application Market Share, 2011
U.S. Next-Generation M2M and Connected Device Vertical Market Share, 2011
Total M2M connections in the United States are expected to increase from 27.8 million in 2010 to 87 million in 2015.
Domestic growth in the next-generation M2M and connected device market has been fueled by a combination of more intelligent hardware, improved software, and ubiquitous mobile networks. Compass Intelligence provides M2M market segmentation and trending analysis on nine (9) vertical markets, and five (5) sizes of business.

16. Focusing on Transportation and Logistics
Roads and Vehicles: 4M miles of roads, 254M vehicles, 11.8M heavy trucks and busses
Rail: 140,000 miles of railroad tracks and 1.4M rail cars
Air: 5,200 airports including 5 of the 25 largest in terms of air freight and 13 of the top 25 in terms of passenger traffic
Pipeline: 1.7M miles of gas and oil pipelines
Waterways: 25,000 miles of navigable waterways
Shipping Containers: 14.8M TEUs globally. (At any time, over 1/4 could be in the United States or inbound to the United States.)
The United States has the largest freight transportation system in the world, an extensive physical
network of infrastructure and entities that provide transportation services: (numbers)
The U.S. transportation network serves more than 300 million people and 7.5 million business
establishments across 3.8 million square miles of land.
We are the largest importer of goods from around the world and 3rd largest exporter.
$16Trillion with a T worth of goods were exported globally last year. (the US is #3)

18. Why now? Operator interest in M2M intensifies
Many telecoms operators are seriously looking at the M2M opportunity (again)
A stream of recent announcements, particularly partnerships and new organisations
Some interesting customer wins
Why now?
Economies of scale, especially in the market for M2M hardware
Increasing importance of connectivity in consumer electronics devices, and the advent of ‘cloud’
Availability of device management software, which has become an integral part of M2M platforms and makes it possible for solutions to be deployed on an industrial scale
More realism from operators - more acceptance of partnership/wholesale role
Main obstacle to growth
Absence of an agreed architectural framework for M2M - some limited progress towards this from smaller players

19. M2M – poised for growth? M2M market has been slow to deliver to date:
Lack of scale - specialized industrial applications in narrow industry verticals
Value chain is complex and fragmented
Lack of standardization
The lack of a new revenue model - M2M has looked like a small market for operators
Need for partnerships - MNOs’ lack network coverage.
What is driving change now:
Corporate customer focus within mobile operators
Falling costs as scale grows
Regulation, particularly in some verticals
Consumer electronics companies are interested
New delivery and commercial models
Operators are recognizing that there is value in M2M – it’s not (just) about ARPU, it’s about margin.
Device management has become mainstream
The size of the market opportunity
Operators do not want to miss out on a potentially huge opportunity, which some see as many times the size of the current (personal) mobility market.

20. The role for the operator in the M2M value chain
B2B value chain
Hardware manufacture
Hardware customisation & testing
Device provisioning & support
Connectivity
Connectivity monitoring & support
Billing & reporting
Applications development
Applications support
Integration of M2M solution
Consulting/sales
Customer care
Customer
Operator core positioning
The M2M value chain

21. Key decision areas for operators
B2B
M2M approach
Revenue model
Coverage
B2B2C
Horizontal
End-to-end
Connectivity
Revenue share
Wholesale
Segments
Local
Global
Centralised
Decentralised
Outsource
DIY
Applications
Vertical
Organisation
Platform
Decision point
M2M issue
Partnering will be essential, even for core services

22. What is M2M? - Key Horizontal Applications
Strict definition: communication where a remote machine is monitored and/or controlled by a central server.
Broad definition: the extension of connectivity to consumer electronics products, particularly where the role of the network operator in providing this connectivity is not apparent to the end user, and where the provider of the consumer device presents itself as the service provider.
Remote sensors/monitoring
Vehicle telematics
Track and trace
Narrow definition:
Based on lack of
user interface
retail relationship for operator
E-reader
Smart metering/grid
Broad definition: based on lack of
Digital
picture frame
Connected camera
Satellite navigation
device
“White Label Network Devices”*
* Where the overall proposition presents the connectivity as an attribute of the device rather than as a service provided by a network operator.

23. Summary Operators recognise there is a significant opportunity in M2M
M2M's time might finally have arrived
The market has developed in a fragmented way – it is not one opportunity, but a collection of opportunities
Learn from other operators’ experience
Operators have a much more realistic appreciation of their own position in the M2M value chain than in the past
You must partner to profit
Partner for the M2M platform, at least in the early days
Partner for applications development – you will need to foster M2M application ecosystems
You must build robust and friendly partnerships with complementary providers as the M2M market matures and wider opportunities grow
Provide an organisational focus for M2M
Link to the enterprise business unit – the majority of early leads will come from business customers, even if applications are B2C
Opportunities will span fixed and mobile
Build a core of dedicated expertise for M2M, but use and train the enterprise sales team and channels
Focus on obvious first verticals – these are not country-specific
Logistics & fleet management
Vehicle telematics
Local regional opportunities will exist
Process monitoring in manufacturing
Utilities – linked to regulation
Retail - POS
Healthcare
Mike Sapien - Ovum
(760)

25. Who We Are
Why We Are Relevant to M2M
Industry Impact

26. Manufacturers ~ Carriers ~ Insurers
TAPA: Who We Are
The Transported Asset Protection Association (TAPA) represents businesses fighting back against cargo crime that want to use real-time intelligence and the latest preventative measures to protect goods in the supply chain.
Manufacturers ~ Carriers ~ Insurers
AMERICAS
EMEA
ASIA

27. We Are:
Abbott Laboratories ADT AFC Worldwide Express, Inc. Air and Ground World Transport Allianz Global Corp & Specialty Alterra E&S (formerly Max Speciality Ins.) Amerifreight, Inc. Amgen, Inc Aon Risk Services APL Logistics, Ltd. Applied Materials Associated Global Systems Astellas Avnet, Inc. Best Buy, Inc. Brightpoint, North America Bristol-Meyers Squibb Cargo Screening Solutions Challenger Freight Systems, Inc. Crane Worldwide Chubb Insurance CVS/Pharmacy CEVA Logistics Chartis Insurance Dell, Inc. DHL Express Americas DW Morgan Eastman Kodak Eli Lilly Expeditors International Falvey Cargo Underwriting Flextronics International FM Global Cargo Insurance Co Freight Logistics, Inc. FreightWatch International, USA Genzyme Corporation Glaxo Smith Kline Hewlett-Packard High Tech Cargo Insurance Program (Insurance Associates of the Southwest) Intel Corporation International Business Machines (IBM) Johnson & Johnson Kingston Technology Kraft Foods Kuehne & Nagel LoJack SCI Marsh Risk & Insurance Services Max Specialty Insurance Co. McCabe Associates Microsoft Corporation MillerCoors Motorola, Inc Motorola Solutions National Air Cargo National Retail Services New Breed Logistics Nike Nippon Express USA, Inc. NNR Global Logistics USA, Inc Ocasa Logistics Solutions, Inc. Pfizer OHL Purolator USA OnAsset Intelligence Performance Team Panalpina Inc. Purdue Pharma Technologies Quantum Corporation Research In Motion (RIM) R&L Carriers Relcor Samsung Telecommunications Sandisk International Sanofi-Aventis Sanofi-Pasteur Seagate Technology Sealock Security Systems, Inc. Shasko Global Logistics Smith & Associates Sony Electronics, Inc Spansion Speedmark Transportation Starr Marine Agency, Inc. Synnex Corp. Tech Data Corporation Travelers Tyden Brooks (formerly EJ Brooks Company) UPS Watson Pharmaceuticals Willis of New York, Inc. Xerox Corporation Yusen Air & Sea Service (USA) Inc. Zurich Services NA
Today, in the Americas, Europe, the Middle East and Africa (EMEA),and Asia, TAPA’s membership is at its highest ever level – and growing every month. The Association’s 700+ members include many of the world’s leading consumer product brands as well as their logistics and transport providers with combined annual sales of over US$900 billion, law enforcement agencies (LEA),
insurers and other trade associations.

28. Relevance to M2M TAPA Global Standards
Freight Security Requirements (FSR – revised in 2011)
Truck Security Requirements (TSR – due 2012)
Parking Standards (Europe only)
Air Cargo Standards (TACSS – EMEA and ASIA
IIS (Incident Information Service)
Benchmark Studies

29. Cargo Theft: Low Incidence, High Impact Events
Industry Impact
Cargo Theft: Low Incidence, High Impact Events
2010: The volume of cargo theft is consistent with 2009, but value per loss continues to increase dramatically
The average value per loss increased by 69%
Extreme high value thefts are occurring more frequently:
$76 million warehouse theft, Enfield, Connecticut (pharmaceuticals)
$37 million full truckload loss, Carlisle, Pennsylvania (pharmaceuticals)
$10 million electronics warehouse theft, DFW
Trends in 2010:
Televisions are the most sought after electronics products
Pharmaceutical theft rates equal to 2009, yet value of shipments sharply rising
Multi-load theft incidents becoming more common
Assessing General Routing
Requiring Checks of Documentation
Different Government Agencies for Different Cases
From
Risk Assessments Per Individual Shipment
Checking for Fraudulent Documents and ID’s
One platform for interacting with multiple agencies To
SHIFTS IN FOCUS

30. 9/9/11