Cellular M2M connections in the retail industry surpassed 10 million in 2011

The number of cellular M2M (machine to machine) connections in the retail industry reached 10.3 million worldwide in 2011, according to a new research report from Berg Insight. Cellular M2M technology enables devices such as POS terminals, ATMs and ticketing machines to be used at new locations where fixed line connectivity is unavailable or impractical.

The technology has a more transformational effect on markets such as vending and parking, where machine operators need to reorganize their operations in order to benefit from the availability of real-time information. Berg Insight forecasts that the number of cellular M2M connections in the global retail industry will grow at a compound annual growth rate (CAGR) of 21.6 percent during the next six years to reach 33.2 million connections in 2017. Shipments of cellular M2M devices for retail applications will at the same time increase at a CAGR of 10.7 percent from 5.2 million units in 2011 to 9.6 million units in 2017.

“POS terminals will constitute the lion’s share of cellular M2M connections in the retail sector throughout the forecast period,” says Lars Kurkinen, Telecom Analyst, Berg Insight. “But the penetration rate for cellular connectivity is today actually highest in the multi-space parking meter segment where it is well above 30%,” he adds.

Berg Insight expects that the vending machine segment will present a major opportunity for wireless connectivity in the long term and the study indicates that vending telemetry solutions will be the fastest growing segment during the next six years. In Europe, the installed base of vending telemetry devices is projected to grow from 75,000 units in 2011 to 324,000 units in 2017. Similarly, the installed base in North America is projected to increase from 0.25 million units in 2011 to one million units by 2017. “Every vending machine will eventually be connected, but costs for the wireless M2M hardware and subscriptions still need to come down significantly before this vision becomes reality,” Kurkinen concludes.