Connected Things
The Nordic region is at the forefront of the
Machine-To-Machine revolution
Preface
Machine-to-Machine (M2M) communications is about to radically
transform society, industry and the way we live. Managing
complex eco-systems is at the core of successfully developing
and deploying innovative M2M solutions and business models.
The Nordic region, where the number of connected things1 has
already surpassed the region’s total population and is expected to
grow twice as fast as the global market, is at the forefront of the
M2M revolution.
In this report, TeliaSonera and Arthur D. Little have teamed
up to draw hands-on insights from the recent development in
Nordic M2M market. We make three deep-dives into segments
of particular interest in the Nordic context: Connected Vehicle,
Connected People and Connected Building. The report seeks
to inspire people, businesses, and governments to explore the
opportunities that arise when things are connected.
Hans Dahlberg
Vice President
TeliaSonera Global M2M Services
Martin Glaumann
Partner & Head of Telecommunications, Information,
Media and Electronics in the Nordic region
Arthur D. Little
1. Excluding mobile phones, personal computers and ICT infrastructure
The Machine-to-Machine
(M2M) revolution has started
During the last five years, M2M has been
one of the hottest topics debated across
industries worldwide. Global industrial leaders
are preaching a revolution more fundamental
than the one created by the internet some 20
years ago. Google’s acquisition of Nest Labs,
a connected home solution provider, in 2014
for USD3.2 billion illustrates how world-leading
innovators are positioning themselves in the
emergent eco-system to capitalize on the
benefits of Connected Things.
M2M solutions have the potential to transform
society, industries and the way we live through
productivity improvements, greater user
convenience, provisioning of value-added
services and enablement of new business
models. Industry experts are outbidding each
other when forecasting the number of global
connected devices. The estimates range from
22 billion (IMS) to 50 billion (Cisco and Ericsson)
by 2020, growing from an estimated 8-10 billion
in 2013.2 In terms of revenue, the global M2M
eco-system is estimated to grow by 16 percent
year-on-year, from a USD300 billion industry
in 2012 to USD980 billion in 2020, according to
Machina Research.3
What is a Connected Thing?
When physical objects can communicate with the outside world, they are said to be Connected Things
or Smart objects: one can interact with them remotely, query how they are doing and change their state
as required.
Connected Vehicle includes machines
that transport passengers or cargo, e.g.
e-call, fleet management
Connected Building includes physical
structures used as homes, offices or a
public facilities
onnected People includes humans,
C
human tissue and/or animals,
e.g. tracking of people´s geographical
positions, measurement of bio markers
onnected Industrial Process is defined
C
as part of a larger commercial process
or procedure, e.g. manufacturing
equipment
onnected Consumer Gadget includes
C
electronic equipment intended for
entertainment, communications and/or
leisure, e.g. cameras, TVs, white goods
Connected Infrastructure includes
physical objects optimized for public
needs or regulatory demands, e.g. Smart
grid, Smart meters
onnected Money includes devices for
C
payment and related services,
e.g. vending machines, point-of-sale
In this report mobile phones, personal computers, ICT infrastructure are excluded from the definition of
Connected Things and corresponding market data.
2. IMS, Cisco and Ericsson estimates on the number of devices include mobilde phones, personal computers and ICT infrastrucure as well
as the new industrial and consumer devices defined as Connected Things
3. Including M2M applications, connectivity, value added services and integration, but excluding the connected object itself
3
The M2M revolution is developing in three waves.
In the first wave, M2M enables remotely controlling devices such as checking that the front
door is door locked or retrieving the position of
moving objects. In the second wave, when large
amounts of data are collected and processed,
M2M enables new innovative services and
improved productivity. For example, M2M and
Big Data analytics can enable a utility to optimize
thousands of turbines and identify leaks in a water
supply network. On the horizon still is a third wave,
in which M2M solutions are becoming seamlessly integrated into the most critical systems of
society; for instance in health care where M2M
enables new advanced remote treatment, or
automation of personal transportation (such as
Google’s driverless car concept).
USD 300
billion
20124
Despite the market excitement and user benefits, the
reality today is that that the commercial market for
M2M services is fragmented and immature in several
segments. Solution providers are still searching for
sustainable business models and many solutions
are far from mass-market adoption. At present
in Europe, only Connected Vehicles (in particular
tracking and fleet management applications) and
Connected Infrastructure (e.g. Smart meters) can be
considered relatively mature M2M solutions. Fleet
management application­s have been commercially
successful due to strong busines­s cases focused
on efficiency improvements for logistics companies
and a relatively structured and clear value chain.
Deployment of Smart meters has been driven by
regulatory requirements in some European markets, notably Sweden, Finland and Italy.
USD 980
billlion
20174
4
4. Machina Research (2013)
Innovating the M2M
eco-system for growth
nviron
Re gu l a t o r y e
al e
me n t
Two different approaches to unlock the growth
potential in the eco-system can be observed in
the market. On one hand, some companies are attempting to vertically integrate, breach and rapidly
drive growth in a certain connected group or niche
application. By doing so, they can assume control
over the value chain and provide a complete
solution to customers, allowing for quicker time
to market and controlled customer experience.
Google’s acquisition of Nest Labs could be seen
as one example of this approach in the Connected
Building segment.
Lead users
Po
litic
Innovators are companies and entrepreneurs that
develop new M2M applications. The role of the
innovator in the eco-system is to push the application boundaries, and sense and explore business
opportunities. Most innovators face difficulties
in reaching lead users by themselves, due to
technical limitations (e.g. integration and delivery
capacity) or lack of market reach.
t
Enablers are companies that ensure that M2M
solutions can be delivered, installed, served and
billed. Several enablers are likely to be required
for a solution to work. Enablers differ by application type and market demands, and can
be represente­d by telecom operators, platform
providers and system integrators. Enablers are
competing, but also collaborating with each other
to ensure coherent service delivery and quality.
Regulatory, Political, and Economic preconditions
are important for M2M market development.
Regulation and government policy can both limit
and drive the market in a distinct manner. Personal
data integrity policies pose a challenge to the
growth of some application types, such as health
care applications. Many of the more mature M2M
solutions as of today have been pushed by regulatory requirements and political agendas, e.g. the
emergency call (e-call) applications driven by the
2015 (EU) e-call mandate for passenger cars and
light-duty vehicles, and the two-way emergency
call applications in elevators pushed by Nordic
legislations in 2012.
n
me
Lead users represent early-adopting customers
(consumers or businesses), that are leading the
way in their respective field, such as the farmer
switching to automated harvesting machinery, or
the home-care provider adopting M2M solutions
for patient monitoring at home. Lead users are
creating the necessary demand pull for these
new services.
Other key players in the market are striving to build
horizontal capabilities and platforms, by creating
alliances and partnerships throughout the M2M
eco-system. Through standardization, multiple applications can be supported on one cloud-based
platform to achieve economies of scale. A key
success factor to drive M2M market adoption is to
have an enabler that takes the main responsibility
for the customer value proposition.
on
nv i r
Successful M2M solutions require several components: the connected object itself, services
and integration, and a sustainable business
model that distributes value between players in a
scattere­d and complex eco-system. To unlock the
growth potential and realize the benefits of M2M,
the interplay between lead users, enablers and
innovator­s is essential.
Enablers
Innovators
E co n
omic environmen
t
Key roles
in the M2M eco-system
5
The Nordic region is
a hot spot for M2M growth
Despite being a relatively small and remote region,
the Nordics5 have a strong legacy of creating
globally successful and innovative ICT companies.
Ericsson, Nokia, Skype, Linux and Spotify all
have their roots in the region. The Nordic region
has a good infrastructure, a stable regulatory
environment and vibrant user communities.
Conditions for early M2M adoption and
growth are excellent in the region. In 2013,
the number of Connected Things, excluding
mobile phones, personal computers and ICT
infrastructure, is estimated to have reached 28
million, and thus surpass the total population
in the region (26 million). Today, 15 percent of
total mobile subscriptions in the region are M2M
connections, compared with approximately
3 percent globally.6 In 2017, 70 million things
are estimated to be connected in the region,
equaling 2.6 Connected Things per person.
4m
2013
15m
6m
2013
2017
Norway
Sweden
9m
5m
2013
16m
2017
2013
Denmark
16m
2017
Finland
23m
The market size for M2M solutions in the Nordics
was estimated at EUR1.7 billion in 2012. Thirty percent year-on-year growth is forecasted until 2017,
roughly twice as fast as the global market, reaching a market size of EUR6.1 billion. Despite small
differences in market characteristics between the
four Nordic economies, some differences can be
observed in market size, maturity and growth:
• S
weden is the largest market (EUR515 million),
and is estimated to grow by 32 percent yearon-year, reaching a market size of EUR2 billion
in 2017.
• F
inland is the most mature market, with 1.22
Connected Things per person and a total estimated market size of EUR396 million in 2012.
The high penetration rate is consistent with the
high mobile penetration rate (169 percent) and
early deployment of Smart meters. Growth rate
is expected to be slightly lower (27 percent yearon-year) compared with the region as whole,
reaching a market size of EUR1.3 billion in 2017.
• N
orway, with 1.03 Connected Things per
person, is relatively immature compared with
the region’s other countries. The market is
expected to grow by 29 percent year-on-year,
from EUR387 million to 1.4 billion in 2017, partly
driven by Smart meter deployment in 2014.
• D
enmark’s market size is estimated at EUR379
in 2012, and is expected to grow by 29 percent
year-on-year, reaching a market size of EUR1.4
billion in 2017.
2017
Number
of Connected Things
in the Nordic region6
There are two key underlying factors that support further growth of M2M in the region. Firstly,
ICT infrastructure: The Nordic countries have
among the highest fixed broadband (34%) and
mobile (149%) penetration in Europe. Secondly,
businesses and people are renowned for quickly
adopting new trends and technologies. All four
Nordic economies are within the top ten of the
World Economic Forum’s Networked Readiness
Index (2013) which measures the propensity for
6
countries (including their populations) to benefit
from the opportunities offered by information and
communications technology.
The market characteristics differ more by
Connected Group than by country. In 2012, the
largest connected group in the Nordic region was
Connected Building (EUR568 million), including
both M2M solutions within homes and offices.
Security applications are the leading and most mature application types in the group. The segment
is expected to grow by 13 percent year-on-year,
reaching EUR1,050 million in 2017.
Connected Consumer Gadget (EUR457 million)
was the second-largest segment in 2012, and is
expected to grow by 42 percent year-on-year,
reaching EUR2.6 billion, the largest segment in
2017. Growth is driven by the myriad consumer
5. The terms ”Nordic countries” / ”Nordics” / “Nordic region” refer to Sweden, Finland, Denmark and Norway
6. Machina Research (2013)
7. Including M2M applications, connectivity, value added services and integration, but excluding the connected object itself
devices (e.g. cameras, consumer wearables,
white goods, music players and TVs) that are
being connected.
segment, but with immense growth opportunities.
It is expected to grow by 47 percent year-on-year,
reaching EUR600 million in 2017.
Connected Infrastructure (EUR279 million), which
includes Smart meters deployed in Sweden and
Finland, has been a key driver for growth in M2M
mobile subscriptions in the region. In terms of
revenue per device, this segment is likely to face
further price pressure, in particular on connectivity
services of installed Smart meters. The segment
is expected to grow by 3 percent year-on-year,
reaching EUR323 million in 2017.
Connected Industrial Process (EUR51 million) is a
rather relatively small segment in terms of M2M
solutions. The segment is driven by underlying
industry demand to improve productivity and competiveness, but faces some challenges that limit
growth, such as high integration costs and long
asset lifetime of industrial equipment. The segment
is expected to grow by 11 percent year-on-year,
reaching EUR86 million in 2017.
Connected Vehicle is expected to show 47 percent
growth year-on-year, the strongest growth rate
driven by solid uptake in the number of connected
cars, which will not only be pushed by OEMs, but
also other stakeholders, such as repair shops,
insurers, rental providers and car pool service
providers. In Norway, an electric car subsidy is
expected to drive the number of new connected
cars, and in Finland, there is an estimated rapid
uptake of “Pay as you drive” insurance policies
connecting not only new but also aged cars. The
segment is expected to grow from EUR196 million
in 2012 to EUR1,321 million in 2017.
Connected Money (EUR38 million) is a relatively
small segment, but includes some mature applications such as point-of-sale terminals. In some
countries, such as Sweden, growth has been
driven by regulations requiring restaurant owners
to exercise the credit card payment process at
customers’ tables. Other application types, such
as connected vending machines or parking meters,
are yet immature in the Nordic region. The segment
is expected to grow by 11 percent year-on-year,
reaching EUR64 million in 2017.
Connected People (EUR88 million), with health
care-related applications such as remote measurement of bio-markers, is yet a small and immature
In the next section, we explore the largest
(Connected Building) and the two fastest-growing
(Connected People and Connected Vehicle) groups
in the Nordic region, to highlight how M2M is
transforming society, industry and the way we live.
Market size and growth
515
Sweden
2012
2,034
Sweden
2017
387
Norway
2012
1,402
396
Finland
2012
Norway
2017
1,290
Finland
2017
379
Denmark
2012
1,374
Denmark
2017
2012–2017
CAGR*
EURm
7,000
6,099
6,000
5,000
People
47 %
Consumer
Gadget
42 %
4,554
30%
(CAGR*)
4,000
3,453
Money
11 %
2,664
3,000
Building
13 %
Industrial
Process
11 %
2,094
2,000
1,677
1,000
0
Vehicle
46 %
Infrastructure
3%
2012
2013
2014
2015
2016
2017
Source: Arthur D. Little analysis, Machina Research * Compound Annual Growth Rate
7
What is a Connected Vehicle? A single machine or fleet
of machines that transports passengers or cargo with
a special connected platform that enables a wide array
of solutions. The driver of a single vehicle can access
navigation systems, entertainment systems, and e-call/
emergency notification, and use security applications such
as stolen-vehicle location. Fleet owners can manage their
fleets of vehicles, access remote diagnostics of engines
and manufacturer data.
Connected
Vehicles
In 2017, 45 percent of Nordic vehicles (passenger and commercial) will
be connected enabling safer, greener and more reliable vehicles with
improved driver experience
With Sweden, Norway and
Finland having a population
density of less than 20 inhabitants per km2 (compared with the
European Union average of 112
inhabitants per km2), combined
with cold and long winters, geographic distance
and harsh environments, mobility is an everyday
challenge. The average Finn travels more than 46
km per day, compared with 36 km per day for the
average German8. Moreover, the Swedish government has been pursuing a “Nollvision” (vision of
zero traffic fatalities) policy since 1997. These are
all strong local drivers for developing smarter and
safer cars in the Nordics, with improved comfort
while on the road, as well as high security to cope
with demanding weather conditions. Innovative
solutions were developed early driven by a strong
automotive cluster, including Volvo and Scania.
An estimated 45 percent of all vehicles (passenger and commercial) or 8.3 million vehicles,
in the Nordic market will be connected by 2017,
up from 9 percent today.9 The market for M2M
solutions, within the Connected Vehicle segment,
is estimated to grow by 46 percent year-on-year
until 2017, from EUR196 million in 2012 to EUR1.3
billion in 2017.
Segment size
1.5 million Connected Things†
EURm
Per country
The growth is expected to be driven by increasin­g
consumer demands, OEMs economics, regulatory
requirements and other eco-system innovator­s.
First, lead users, now used to smartphone
features, are increasingly expecting similar
sophisticatio­n and simplicity in vehicle interfaces.
1,500
Denmark
318,000
1,321
Sweden
531,000
1,200
1,092
867
900
Finland
314,000
46%
(CAGR*)
Norway
340,000
571
600
Key application types
327
300
196
Security & tracking
Fleet management
Financing & insurance
Entertainment
& convenience
Navigation & information
0
Vehicle diagnostics
2012
2013
2014
2015
2016
2017
Source: Arthur D. Little analysis, Machina Research * Compound Annual Growth Rate † 2012
8
8. Eurostat
9. Some Connected Vehicles include more than one connected device
9
percentage
connected vehicles
today10
45
percentage connected
vehicles by 201710
Second, automotive manufacturers (OEMs) seek
to meet the consumer demand with connected
features to defend premium price points. They
also seek to leverage M2M, for example, for failure
code predictions and vehicle recall mitigation
and after-sales opportunities. Third, legislation is
driving innovation through e-call applications with
several mandates promoting embedded solutions,
e.g. the 2015 (EU) e-call mandate for passenger
cars and light-duty vehicles. Other eco-system innovators such as insurers, repair shops, car rental
providers and car pools will push new services into
the market targeting mainly the existing nonconnected fleet, namely passenger cars older than
3–5 years. Repair shops, for example, have a lot to
gain to be able to redirect cars to their own repair
shop and do pre-emptive maintenance.
Key benefits of Connected Vehicles
include:
1. Improved safety, security, navigation and
entertainment (e.g. traffic condition information,
weather and hazard alerts, and p2p alerts on
speed camera locations)
2. P
reemptive maintenance through remote
vehicle performance
3. U
ser-based insurance, where actual driving
performance is used to determine insurance
premiums. 7 out of 10 drivers could save up to
15 percent of their insurance premiums.11
Use case: Next generation driving experience
In September 2013, Tesla Model S was Norway´s
top-selling car, all categories, partly driven by a
government subsidy on electric cars. As a pioneer
in high-performance electric vehicles, Tesla has
spearheaded implementation of innovative M2M
features for connected services. With the Model S,
M2M-enabled features include vehicle diagnostics,
internet radio, and web browsing, which are
accessed through a touchscreen. Moreover, using
M2M technology, the driver’s experience can be
continually improved through remote software upgrades. Tesla’s Model S illustrates how connected
cars provide an improved driving experience and
can be more cost efficient with smart maintenance.
Use case: User based insurance “Pay as you drive”
The typical car insurance customer is assigned
a premium based on so-called risk factors such
as postal code, gender, age and vehicle type (in
addition to the customer’s own past record). Using
M2M technology insurance brokers can provide
user-based insurance that gives drivers control
over their own insurance policies by monitoring
driving behavior to allocate premiums based on
10. Arthur D. Little analysis, Machina Research (2013)
11. Insurance Journal (2013)
actual habits. The insurance premium can be
determined, in real-time, by driving patterns, such
as speeding, sharp braking and parking locations.
Governments are also exploring the opportunitie­s
for “Pay as you drive”; in Finland, the Finnish
Transport Agency is investigating the use of M2M
solutions for tax collection on vehicles based on
driving patterns.
9
What is Connected People? A human, huma­n tissue
and/or animal that is connecte­d, enabling tracking of
geographical positions or access measurement data
of bio markers. By connecting People a wide array
of solution­s could be offered, such as clinical remote
monitoring, first responder connectivity, telemedicine
and personal monitoring.
Connected
People
M2M has the potential to reduce 50 percent of hospital nights and rehospitalization of certain patient groups and significantly improve quality
of life for patients and the elderly.
Every day approximately 40
people in the Nordics suffer
strokes due to undiagnosed or
untreated heart diseases. Every
year approximately 300,000
people are diagnosed with
Alzheimer’s Disease; some 60 percent of them
wander away from their caregivers or homes.12
These are only two of many issues that not only
generate great suffering for humans but also cost
the health care system many billions of euros every
year. At the same time, demographics are shifting,
with more than 25% of Swedes expected to be
aged over 65 in 2030, creating high pressure on
the welfare system. Innovative M2M applications
and services are expected to become an essential
part of providing security and patient care, helping
to save lives and cut costs.
Segment size
268 000 Connected Things†
EURm
Per country
The market for M2M solutions, within the
Connected People segment, is estimated to
grow by 47 percent year-on-year until 2017,
from EUR88 million in 2012 to EUR600 million in
2017. The strong growth is driven by underlying
demand from a growing and aging population
with increased demand for high living standards
at their homes. Governments and private healthcare providers are squeezed between these
higher demands and needs for cost savings on
State healthcare budget­s. The market is still in a
trial-and-error stage in which new solutions are
pushed into the market by innovators such as
1,500
Denmark
50,000
1,200
Sweden
104,000
Finland
60,000
900
600
600
47%
409
(CAGR*)
88
0
Key application types
278
300
2012
129
2013
190
2014
2015
2016
Norway
54,000
Health tracking & monitoring
First responder connectivity
Telemedicine & remote
diagnostics
People tracking
2017
Source: Arthur D. Little analysis, Machina Research * Compound Annual Growth Rate † 2012
10
12. Alzheimer’s Association
20%
cost reduction potential at
health-care, elderly care
and penitentiary
institutions13
large medical supplier­s or venture capital-backed
start-ups. Creating partnership within the industry
eco-system, integration into existing health-care
systems and mastering local and often rigid public
procurement processes are key success factor­s
for developing successful M2M solutions in
the segment.
Up to
50%
reduction of hospital nights and
re-hospitalization within certain
patient groups13
Key benefits of Connected People
include:
1. S
ignificantly improve the quality of life of an
aging population by providing health care at
home and adoption of more patient groups as
candidates for home care
2. G
enerate up to 50 percent reduction in hospital
nights and re-hospitalization of patients with
chronic diseases such as cardiac disease, high
blood pressure, diabetes and obesity13
3. R
educe costs to health-care, elderly care and
penitentiary institution­s by up to 20 percent13
4. C
ontribute to a more secure society by costefficient tracking and monitoring of people
(e.g. patients, children, prisoners) and pets
Use case: ECG monitoring at home
By means of early detection and treatment of
fibrillatio­n, a large number of strokes can be prevented. Zenicor, a Swedish med-tech pioneer, has
developed a small and portable ECG-monitoring
device that can be used by all patients, including
children and the elderly. Measurement begins
when the patient puts his/her thumbs on the
electrodes. Microvolt ECG signals are measured,
stored and transferred. The device consists of,
among other things, a display, two measuring
electrodes, and a built-in cellular connectivity
device, allowing for real-time monitoring.
Use case: People tracking
Monitoring a person in real time can save both
lives and precious public resources. There are
many instances in which tracking an individual is a
necessary safety measure, such as with patients,
children and prisoners on parole. Tracking devices
can come as small, wearable devices that often
13. Arthur D. Little analysis, University of Oxford
blend in and are virtually unnoticeable to a passerby. For instance, child-tracking devices often
look like small wrist-watches. Leveraging wireless
cellular M2M technology, these devices can often
locate a missing person regardless of whether they
are inside a building or under a structure.
11
What is a Connected Building? A home or office
equipped with a special connected platform enabling
its occupants to remotely control and program an array
of automated connected devices. When the home or
office becomes Smart, it offers a wide array of new
applications, such as security, automation, optimization
of HVAC (Heating, Ventilation and Air Conditioning), and
connected office appliances.
Connected
Building
M2M can support up to 30 percent energy savings in homes and offices
and provide increased convenience and security to home owners and
commercial developers
In the Nordics, electricity consumption per capita is
16.4 kWh, more than double the
European average of 7.5 kWh.
In this cold climate, heating of
buildings is the key contributor
to this difference. Saving on energy is critical for
both protecting the environment and enabling
cost savings for home owners and commercial
investors. New homes and offices that are being
built are intelligent, such as the Stockholm Royal
Seaport, a landmark project in Stockholm. Utilizing
climate-smart and efficient infrastructure, the city
of Stockholm is planning to build a climate-positive
city district by 2030. Some 10,000 homes and
30,000 workspaces will be connected. When
homes and offices are being connected, other
features can easily be added, such as home
automation and improved security.
Segment size
6 million Connected Things†
EURm
Per country
The market for M2M solutions, within the
Connected Building segment, is estimated to
grow by 13 percent year-on-year until 2017, from
EUR568 million in 2012 to EUR1,050 million in
2017. Connected Building corresponds to one third
of the entire market and is one of the more mature
segments. In particular, security applications have
been commercialized for some time by security
1,500
Denmark
1.4 m
Sweden
1.9 m
1,200
1,050
13%
(CAGR*)
900
929
821
Finland
1.4 m
726
642
600
568
Norway
1.3 m
Key application types
300
0
2012
2013
2014
2015
2016
Home/office security
Building automation
Connected Office appliances
Energy optimization
2017
Source: Arthur D. Little analysis, Machina Research * Compound Annual Growth Rate † 2012
12
Up to
30%
EUR1 bn
segment size
in 2017
energy savings in homes
and offices14
companies that have developed M2M technology
to improve productivity in a traditionally personnel
intense industry. In addition, home automation applications have been on the market for some time;
however, not until lately has functionality improved
and prices have been sufficiently reduced for
mass-market adoption to occur. Demand is driven
by a need for security and convenience of automated homes, while energy management emphasizes cost savings and environmental factors.
Key benefits of Connected Building
include:
1. N
ew automated services in homes and offices,
e.g. automated lighting, remote door looking
2. Improved security for home owners e.g. home
alarms, connected smoke detectors
3. E
nergy savings of up to 30 percent in homes
and offices due to optimization of HVAC
(Heatin­g, Ventilation and Air Conditioning)14
Use case: Energy optimization in homes and offices
Using M2M technology, heating, ventilation, and
air conditioning (HVAC) can be controlled to automatically adjust for maximum energy savings and
indoor climate comfort. This reduces peak loads
and provides a more stable grid. These systems
can be used to both optimize and verify the energy
savings achieved by the heating/cooling control
across devices. For example, ATC’s Scypho
solution, deployed in several Nordic countries, is
a hub for Connected Things in the building. It uses
ultra-low-power radio communication via standard
radio protocols for metering devices, temperature,
air quality and humidity sensors, actuators for
radiator control, motion, presence and window
detection sensors (security alarms).
Use case: Access control
Over one million apartments were built between
1965 and 1975 in Sweden and the plumbing in
these homes is in serious need of replacement.
These large quantities of reparation and maintenance issues have several practical implications.
A problem of door-key management for such
projects can be easily solved using an M2M
motorize­d keyless handle. Installation takes just a
few minutes, does not cause damage to or leave
any marks on the door since neither the lock
14. Arthur D. Little analysis, ATC (2014)
engine nor the cylinder need to be replaced. The
apartment door and lock continue to work normally
for tenants coming in and out using their own keys.
Meanwhile, an authorized workman can access
the apartment with a digital key consisting of the
workman’s own identification tag with an RFID barcode on it. Access can be monitored remotely, and
when work is over, the handle is removed without
any damage, providing safety, accountability and
ease of use for all parties.
13
Conclusions
Machine-to-machine (M2M) communications
is transforming society, industry and the way we
live. Myriad things are now being connected, from
remote ECG-monitoring devices to traffic control.
Industry experts expect the number of connected
devices to reach from 22 to 50 billion globally by
2020. Today’s reality, however, is that the commercial market for M2M solutions is fragmented and
immature in several segments. Solution providers
are still searching for sustainable business models,
and many solutions are far from reaching massmarket adoption.
To overcome these challenges, the interplay
within the M2M eco-system between lead users,
enablers and innovators is essential. Prominent
M2M players are striving to vertically integrate to
drive rapid uptake in a certain segment, and/or to
build horizontal capabilities by creating alliances
and partnerships. A key success factor to drive
M2M market adoption is to have an enabler that
takes the main responsibility for the customer
value proposition.
The right conditions for early M2M adoption and
further growth can be found in the Nordic region,
which has an excellent ICT infrastructure, a stable
regulatory environment and lead users, enablers
and innovators.
• T
he Nordic M2M market is expected to grow
by 30 percent year-on-year until 2017, roughly
twice as fast as the global market, reaching a
market size of EUR6.1 billion.
• In 2013, the number of Connected Things
surpassed the region’s total population. By
2017, there will be an estimated 2.6 Connected
Things per person.
14
There are several examples of how M2M has
started to transform society, industry and the
way people live in the Nordics. In the Connected
Vehicle segment, M2M solutions will revolutionize the driver experience, enhance security and
enable new business models to thrive, e.g. “Pay
as you drive”, intelligent car pools and preemptive
vehicle maintenance. An estimated 45 percent
of all vehicles (passenger and commercial) in
the region will be connected by 2017. In the
Connected People segment, M2M solutions
could reduce up to 50 percent in hospital nights
and re-hospitalization for patients with chronic
diseases and significantly improve quality of life for
patients and the elderly. Innovative M2M solutions
are also becoming integral for Connected Building,
for example, by offering the potential for up to 30
percent energy savings in homes and offices and
providing increased convenience and security to
homeowners and commercial developers.
In summary, the Nordic region is at the forefront
of the M2M revolution. Decision makers should
watch the Nordic markets closely and embrace the
opportunity to engage in a pioneering eco-system.
About TeliaSonera Global M2M Services
TeliaSonera provides network access and
telecommunication services in the Nordic and Baltic
countries, the emerging markets of Eurasia, including
Russia and Turkey, and in Spain. TeliaSonera Global
M2M Services is a global unit in the TeliaSonera
group and a founding operator of the Global M2M
Association, responsible for business-critical M2M
solutions. With extensive mobile networks across
its markets, dedicated M2M services, including
technology and support, as well as an expert network
of industry and operator partners, TeliaSonera
deliver comprehensive M2M Solutions with seamless
quality throughout Europe. TeliaSonera believes
M2M has the power to transform the way companies
do business as well as how people live their lives.
Read more on www.teliasonera.com/m2m
About Arthur D. Little
Arthur D. Little, founded in 1886, is a global leader
in management consultancy, linking strategy,
innovation and technology with deep industry
knowledge. We offer our clients sustainable
solutions to their most complex business
problems. Arthur D. Little has a collaborative
client engagement style, exceptional people and a
firm-wide commitment to quality and integrity. The
firm has over 30 offices worldwide. Arthur D. Little is
proud to serve many of the Fortune 100 companies
globally, in addition to many other leading firms and
public sector organizations.
Authors: Hans Dahlberg, Johan Öberg,
Martin Glaumann, Hampus Dahlstedt,
Andreas Gjelstrup Björdal