Published : Sept. 4, 2013 - 20:36
The machine-to-machine market, traditionally focusing on the industrial sectors, has been expanding into consumer markets with the rising use of smart devices.
M2M refers to technologies allowing devices to communicate with each other without human intervention, and control surroundings by intelligently collecting and processing information.
The typical M2M markets in Korea are the “Hi-pass” automated toll charging system, closed-circuit television, volume-rate garbage disposal system, and bus management system. Hi-pass, among them, accounts for the biggest segment with 7.73 million cars having used it as of last year. This system allows drivers to pay highway tolls without having to stop and hand over cash.
Machine-to-machine technology allows users to control home appliances with smartphones from inside the home, in the backyard or at work. (Insteon)
The M2M markets centering on industrial sectors in Korea, however, saw low growth despite years of hype. It has several issues to deal with: Privacy and security issues are not yet settled, and related laws have not supported them. For instance, remote medical examination is still illegal in the country. Also, companies are unenthusiastic about the jump into the low-profit market. Electronic ankle-bracelet makers for sex offenders reportedly earn a revenue of less than 2 million won ($1,820) a month. Unless the number of the criminals grows fast ― which is unrealistic ― the business will not become lucrative.
Researcher Park Jae-hyun of Seoul-based research center Digieco said that “with the exponential growth of smart devices recently, consumer markets are rather expected to have more business opportunities.”
When products sell well, the market will naturally form without the need of regulation or standardization, he said.
Recently, Panasonic has launched home appliances such as televisions, washing machines and rice cookers that are remotely controllable from an Android-based phone. Samsung Electronics is also speculated to unveil its “S Cloud” service using M2M technology to ambitiously connect all of its handsets, electronics, home appliances and even apartment buildings. There are a slew of niche markets too for small companies. Insteon developed technologies to control home appliances, including lamps and thermostats, with Android phones.
The number of M2M connected devices will grow to nearly 12 billion worldwide and 160 million in Korea by 2020, according to Digieco.
Park said the strong growth, however, may not directly translate into extra sales in devices as the technology will be applied to existing electronics. Rather, there will be more lucrative opportunities for entrepreneurs exploring new business items.
The pay-as-you-drive insurance system in the United States can serve as an example. The costs of motor insurance are dependent on types of vehicle used, measured against time, distance, behavior and place.
“The pay-as-you-drive service found success as users were willing to expose their private driving information if they could save money,” said researcher Choi Min-seok of the Electronics and Telecommunications Research Institute.
“Entrepreneurs need more innovative ideas to succeed in the M2M market.”
By Shin Ji-hye (
shinjh@heraldcorp.com)