The European M2M Connection

5/29/2013
In theory, M2M connectivity has no boundaries. In fact, from an application standpoint, the possibilities are endless. Growth and acceptance of M2M, however, does differ depending on where you are located. Regionally, there are differences among user preferences, network protocols, and business logistics, creating a huge challenge for a supply chain trying to cater to a global marketplace.

Perhaps no other advanced market has felt the impact of regional differences than Europe. Besides industry debates over network protocols, the U.S. really has only one major consumer base it is trying to reach. Europe, one the other hand, has to cater to a multitude of cultural differences. This is especially true when it comes to consumer M2M applications, an area where the U.S. has emerged as a leader. “In Europe, you have issues of currency, different languages, different payment methods across different countries, so it is a little more complicated to launch those models in Europe,” Robert Brunbäck, head of product and market strategy at M2M service provider Telenor Connexion AB, www.telenorconnexion.com, tells Connected World.

User preferences create another challenge for the European connected device market. A recent report from Forrester Research, www.forrester.com, for example, found while more than half of European adults own two or more connected devices, how those devices are used differ according to where those adults live. According to the report, UK consumers are the most connected in Europe, with 83% going online regularly. Connected UK adults are also most likely to own a laptop (64%), smartphone (52%), or tablet (12%). Meanwhile, French consumers were found to be lagging in terms of tech adoption. The report found they are the least likely to own a laptop (56%), smartphone (42%), or tablet (7%).


Forrester reports even social network adoption varies by country. Twitter, for example, is least popular in Germany and France. Only 5% of German online adults and 7% of French online adults have a Twitter account, compared to 18% in the UK. Facebook adoption, however, is more evenly distributed across Europe, with 58% of European online adults having an account.

Reineke Reitsma, a director at Forrester Research, says there were several other significant findings in the report, including differences that could lead to market opportunities for industries like retail. Reitsma also stresses that companies looking to reach Europe’s tech-savvy consumers need to take these regional differences into account if they want to be successful.

While the Forrester report only looked at five European countries—France, Germany, Italy, Spain, and the UK—it is easy to see how those differences would increase when considering the entire EU (European Union). Whereas a company in the U.S. can essentially launch a product once and have the potential of 300 million customers, that same product would have to be launched in Europe 37 different times with only a few million potential customers in each country.

That doesn’t, however, mean the consumer European M2M market is one to ignore. Reitsma of Forrester states European consumers “are more connected today than ever before.” In addition, research firm Berg Insight, www.berginsight.com, reports vertical markets like smart metering are seeing huge growth in the consumer space, due in large part to increased regulation by individual countries. Based on current deployment plans, Berg expects more than 70% of EU households to have smart electricity meters by 2020.

That number could be even larger if Germany decides to also deploy a regulation-driven smart metering plan. Tobias Ryberg, a senior analyst at Berg, says if Germany follows the path of other EU countries, it will open up a “large and diverse market” for both new and existing players to define the next generation of smart grid technology.

Like any market, Europe comes with its own unique set of challenges, especially when it comes to connected consumer devices. However, it does have other key market advantages, including a large pool of M2M players. And while Europe may fall behind the U.S. in consumer M2M applications right now that means it also represents a market opportunity in the years to come.

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