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China M2M connections to churn $2.8B revenue in 2016

Connection revenue and shipment of modules for machine-to-machine market in China expected to grow until 2016, says new report.
Written by Liau Yun Qing, Contributor

Connection revenue for the M2M (machine-to-machine) market in China is expected to grow to almost US$2.8 billion in 2016 as network carriers pump up efforts to drive this technology segment.

In a statement Monday, ABI Research said China's cellular connection revenue accounted for over one-third of Asia-Pacific's M2M market, generating US$642 million in 2011. Shipment of cellular modules from China reflected a similar percentage as the country contributed 32 percent of the region's overall market last year with 3.8 million units.

By 2016, shipment from China is expected to grow to 13.6 million units to make up 37 percent of Asia-Pacific's total shipment, according to the research firm.

The Chinese government has played a role in pushing the technology.

According to Jake Saunders, ABI's vice president of forecasting, the Chinese government's latest five-year economic plan "has placed the 'Internet of Things' as a key, strategic national industry initiative for the country".

"Carriers have made significant progress through 2011 in terms of developing technologies, unified platforms, applications, and strategic cooperation," Saunders noted.

The analyst firm highlighted the efforts of China's three local carriers in promoting M2M in the country. China Mobile, for instance, started the development of M2M early and had positioned the technology as the "third wave of its long-term business offerings". The carrier also moved into developing M2M standards and promoting economies of scale, as well as positioning itself as an integrator, but without focusing on providing an end-to-end offerings, it noted.

The report added that China Unicom also launched sector-specific M2M applications such as Bank New Horizon, Ocean New Horizon, and Logistics New Horizon, and had made progress as a telematics service provider (TSP), ABI said.

It added that while rival operator China Telecom entered the domestic M2M market late, the carrier was aiming to gain fast market entry by offering value-added services through their strong relationships with enterprise clients.

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