Machine-to-machine (M2M) technologies are quietly taking the world by storm with connections expected to rise from 2 billion in 2011 to 18 billion by 2022, according to Machina Research. Despite this enormous projected growth, the industry remains largely unknown to the public, because it works behind the scenes as a silent “big brother”.
A Silent “Big Brother” Technology
M2M technologies have many applications across countless industries, with a total market size that could reach $1.2 trillion by the end of 2022, according to Machina Research. But, all of these applications center on a single concept – the remote monitoring and controlling machines, from anywhere to anywhere in the world, around the clock.
What does this mean, exactly?
Suppose you’ve leased a photocopier on credit to a client, but they are late in making payments. Instead of placing endless collection calls, you can now disable the photocopier online with the click of a mouse. When the client makes the payment, you can just as easily reactivate the photocopier and continue with business as usual for the day.
Alternatively, suppose that you own a factory with many different production machines operating around the clock. When any one of the mechanical systems begins to show signs of failure or require maintenance, M2M technology can provide a service technician with not only a service notification but also the exact nature and location of the problem.
Bad for Some, Good for Business
By acting as a silent “big brother”, M2M technology empowers businesses to more effectively deal with deadbeat clients or expensive contractors. Many of these consumers and contractors may find the technology invasive as the ultimate “big brother” intruder, but the reduction of waste in the form of time and money will prove extremely beneficial for most.
Many companies are capitalizing on these benefits:
· Sierra Wireless Inc. (NASDAQ:SWIR) is bundling common M2M services into products like consumer devices, motor vehicles and energy meters, leveraging its AirVantage™ M2M Cloud Platform that simplifies M2M deployment.
· Numerex Corporation (NASDAQ:NMRX) provides a broad range of M2M products in industries ranging from security, asset tracking, vehicle intelligence, industrial monitoring, network services, supply chain management, and custom solutions.
· Wiless Controls Inc. (IMEK) provides the industry’s only all-in-one, plug-and-play cellular gateway designed to dramatically simplify M2M deployments.
Game-Changing Global Potential
About every decade, a new technology is introduced that changes the world forever. The digital revolution in the 1950s was the first major innovation, followed by the development of the personal computer in the early 1980s. Next, the Internet was developed and microprocessors were embedded into many different types of electronics aside from PCs in the 1990s.
The next big revolution may very well be M2M technologies in the 2010s, which will enable computers to wirelessly “talk” to each other using sensors and cellular networks. In addition to the applications already mentioned, there are millions of other applications in almost any industry imaginable, from agriculture to government service sectors.
What are some of these diverse end markets?
· Agricultural organizations, like commercial farms, can use the technology to monitor crops remotely and ensure they are receiving the right amount of water.
· Utilities can use the technology to monitor electricity use more efficiently in real-time in order to make billing more efficient for consumers.
· Municipal governments can use the technology to turn on and off street lights based on the day’s conditions instead of a pre-set clock that may be inaccurate at times.
· Consumers can use the technology to alert them when a freezer door is open, when lights are left on, or when a family member is using a car.
· And much, much more.
Investing in the “Big Brother” Revolution
M2M technologies could become a goldmine for investors looking to capitalize on this quietly growing market. After all, the industry is expected to grow to $1.2 trillion by 2022 with relatively few players having the expertise to provide true end-to-end solutions. Those willing to accept some risk in their portfolio could be rewarded with outsized returns over the long run.
What public companies operate in the space?
Most public companies in the space focus on either a single aspect of M2M technology or a closed platform solution. For instance, AT&T Inc. (NYSE: T) provides the cellular infrastructure for M2M communication and Qualcomm Inc. (NASDAQ:QCOM) focuses on modules and sensors that are actually implemented in M2M-enabled devices.
Investors looking to create a diverse portfolio of large-cap stocks may want to consider investing in a basket of these companies providing individual services. But, those looking for an end-to-end provider with strong potential may want to look at smaller stocks like Wiless Controls Inc. (IMEK).
Wiless Controls is a sub-$5 million company that has already developed and tested an end-to-end M2M solution that’s being commercially deployed. With applications in credit management, equipment monitoring and pay per use, among other industries, the company’s plug-and-play cellular gateway works around the world and comes pre activated avoiding the need to negotiate cellular contracts.
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