Analyst Roundtable Vicki Livingston Head of Communications & Analyst Relations 4G Americas office mobile

Bringing M2M into the Home: The Consumer Perspective Jennifer Kent Research Analyst Digital Health and Mobile Product Research Parks Associates

The Consumerization of M2M M2M industry has traditionally been B2B or B2B2C As more devices gain embedded connectivity, M2M increasingly touches the consumer directly, especially in and around the home Consumers will expect smartphones and tablets to be the control center of their digital lives M2M services with consumers as end-users include: – Connected home services – Wireless health care – Connected cars – Retail

Sources: Consumer Decision Process – Core Study, 2012 ©Parks Associates, 2012 Untapped Consumer Opportunities for Mobile Services, ©Parks Associates, 2012

Connected Home Services Operators with home broadband or pay-TV presence have credible connected home plays, and can leverage LTE networks to support connected home initiatives in the long run Parks Associates estimates bundled IP home services currently stand at ~ 500K U.S. subscribers but projects adoption will hit 18-20M households by 2020

Interest in Wireless Health Services (Q4/11) (Among U.S. BB HHs) Source: IP Monitoring, Access and Controls, ©Parks Associates, 2011.

Willingness to Pay for Health Monitoring (Q4/11) (Among Caregivers in U.S. BB HHs) Source: IP Monitoring, Access and Controls, ©Parks Associates, 2011.

Ron Gherman

M2M – From Millions to Billions! Making Lives Better

The M2M Ecosystem – Devices, Networks, and Apps * Other mobile operators such as Leap Wireless International, U.S. Cellular, and Metro PCS Wireless, Inc. ** Other application service providers such as Securus, Inc., and Geotab, IncSource: Frost & Sullivan

Cellular M2M Communications - Market Forecasts Direct 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 excess of 50 million. Source: Frost & Sullivan

Cellular M2M Communications – State of the Industry Source: Frost & Sullivan

M2M Cloud – A Key Enabler of Innovative M2M Apps IaaS - Computing, Storage, Connectivity Resources PaaS - Middleware, APIs, Application Integration SaaS - Applications, User Interfaces, Data Presentation Millions of M2M connections will generate Trillions of transactions supported/measured on M2M cloud platforms. This also speaks to the market opportunity for M2M cloud vendors. Source: Frost & Sullivan

Conclusions  The M2M industry continues to work tirelessly to maximize the M2M opportunity.  Migration from “products” to “solutions” is a noticeable trend.  Mobile operators and M2M Solution Providers are key to market growth.  Ease of deployment,and ease of management of existing implantations will be the key to achieving long-term success in this market.  Frost & Sullivan continues to hold that both direct connections and aggregate revenues from M2M could become larger than traditional mobile phone business in North America– this could take years.

Contact Information 17 Ron Gherman Consultant (210) Ron Gherman Consultant (210)

James Brehm Senior Strategist and Technology Evangelist

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 or follow us on Twitter(

If M2M were a football game, what quarter are we in?

Training Camp!

Why deploy M2M? Market or Revenue Growth Cost Reduction

How big is the market opportunity?

“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.” Sprint Nextel Corp

Hype or Reality? Technology Trigger Crest of Inflated Expectations Depression of Expectations Educated Decision- making Product Maturity High Growth Above 14 percent Medium Growth 7-14 percent Low Growth Less than 7 percent Declining Market Tablet Computing Contextual Computing Smartphones Feature Phones Netbook and Smartbook Landlines M2M

Are the numbers any good?

Many Numbers are Simply Wrong

Vehicle Telematics is the largest segment in the M2M market. Just 4% of consumer vehicles and less than 20% of fleets currently connected, the market potential is enormous!

ARPU’s range from $1 to $20 One of the goals of service providers who have to invest in spectrum should be in efficiently utilizing the spectrum It’s about the cost per KHz of spectrum Compass is wondering if AMPU is not a better measure of success

IDEA CONCEPTUALIZATION Create a proof- of-concept & prototype Applications Developers Hardware Platforms Beta Testing Certification Go To Market 6 Weeks8-12 Weeks8-10 WeeksBring Disparate Hardware companies and Software developers together Fast Pitch & Executive Sponsorship Multivendor M2M Solution Development Process

 Reasons to use Location Based Services for asset tracking –Lost goods –Fewer future thefts –Improved efficiencies –Shorter time to market –Safety –Convenience –Green –Fuel savings –Staffing –Fleet management –Brand protection –More

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.) Focusing on Transportation and Logistics

James Brehm Senior Strategist and Technology Evangelist