Atlas Research and Consulting
M2MAPPS: Please tell us your about affiliation, position, and the work you do.
KEUNHO JUNG : As a KAIST Techno MBA Ph.D in Management Engineering, I currently manage the Atlas Research and Consulting R&C team while developing various market research materials.
Founded in year 2000, Atlas is a research consulting firm that offers its clients the ability to make accurate decisions by providing optimal information necessary in today's rapidly changing business environment based on its accumulated knowledge and experience in telecom/IT/broadcasting fields. Our firm also offers critical information about both domestic and international markets in close collaboration with overseas research partners in the US, Europe, Dubai, Beijing, and Tokyo.
M2MAPPS: How do you evaluate the growth potential of the M2M market in Korea?
KEUNHO JUNG : There is more interest in M2M today than ever. The three telecom companies in Korea are stressing M2M services in MVNO and corporate services and the government is also actively pursuing legal reviews and infrastructural activities to foster the M2M industry.
As the existing mobile phone market becomes saturated and the ARPU becomes congested, telecom companies are experiencing the need to develop new demands in order to elevate their data sales. Developing new businesses outside the telecom sector has become more important and M2M is the answer. The fact that M2M service providers and users can increase their efficiency through cost reduction and that existing businesses can create additional values, strongly support the expansion of M2M services.
In reality, telecom companies are making efforts to grow the market by setting up teams dedicated to the M2M business and the user of M2M in convergence with other industries is really elevating the speed of growth. If the business was previously operated on a public level, it is promising to see that companies with valid business models are proactively involved in the market.
Also, telecom companies' recent offering of M2M platforms and business opportunities to solution providers, minimization of certification procedure for device manufacturers, and module development costs to module manufacturers are all worth acknowledging.
The fact that the government is reviewing the legal aspects while getting involved in the development of standardized device platform is very promising when it comes to the M2M market outlook.
The Korea Communication Commission recently announced that it will jump into the development of a WiBro/LTE-based M2M device platform standard in order to establish a standardized platform regarding wireless connectivity of M2M devices, certification and security, quality assurance, and remote control in the new mobile communication environment as well as creating tools and an environment for developing the software and hardware on which the platform can be implemented.
In the past, a platform (wireless connection, quality assurance, remote control, and etc.) needed to be developed for each telecom company and for each network (2G, 3G) in order to manufacture M2M devices. However, if a WiBro/LTE-based M2M device standard platform is developed, a common standard platform functions can be applied regardless of the telecom company or network, allowing a faster and less expensive production of related products.
M2MAPPS: What could be some areas of particular interest and why?
KEUNHO JUNG : The biggest growth will take place in the automotive and healthcare markets.
For the automotive market, insurance companies would be able to apply insurance rates according to mileage and possibilities are endless given valuable information like driving patterns, gas use, and emergency situations.
The market is full of opportunities considering over 20 million cars can be equipped with an M2M module and the first applications are likely to involve commercial vehicles and rental cars where tracking driving information is important.
The healthcare sector's rapid growth is propelled by the aging society's interest in health and medicine. Long-term data gathering is necessary for health management where an M2M device can be attached to one's body to measure basic health-related data like the pulse rate and blood pressure thereby monitoring any abnormal behavior and preventing from potential sicknesses. These services are applicable by medical institutions and insurance companies.
Likewise, M2M is not merely applied in a single market but in a vast range of industries that we come across on a daily basis. On top of the aforementioned cases, other possibilities include intelligent navigation that connects wirelessly to the network, stolen vehicle detection, and in-car infotainment systems.
Also, the current power grid can be integrated with the ICT technology to check the power usage in real time through smart meters where smart grids, which reduce the power consumption by efficiently controlling the use of electronic products, will become more highlighted based on the Green movement.
M2MAPPS: What do you see as opportunity in terms of technical aspect?
KEUNHO JUNG : M2M could also affect the network operation strategies of telecom companies. Telecom companies worldwide are adopting next generation wireless technologies like WiMAX or LTE in order to process the increasing volume of wireless traffics. It is only natural for M2M services to use next generation communication protocols with expanded bandwidth as M2M services, like remote monitoring, deal with high-definition videos and images.
Nonetheless, a large number of M2M services can still effectively utilize existing low-speed networks. This leads to a continued revenue creation as existing legacy networks like 2G and 3G can be fully leveraged for these M2M services even after the introduction of next generation networks.
It is also expected that services customized to using not only broadband technologies like 3G but also near communication technologies like Bluetooth and WiFi Direct can be offered.
M2MAPPS: What are some difficulties when it comes to doing M2M-related business in Korea?
KEUNHO JUNG : Above all, companies trying to decide whether or not to invest in M2M are concerned that there are not enough success cases in M2M business in Korea.
Knowing the concept of M2M is one thing and being aware of various use cases is another when minimizing the risks of an investment. It is also true that the government's eagerness to support the market is important when it comes to developing various new businesses in the long run.
The M2M industry is played by a range of different companies from communication module manufacturers, device manufacturers to platform providers and service providers. Therefore it is likely that these companies are put in conflicting relationships with one another. The value chain of M2M is particularly complex because it requires different devices, networks, and platforms for every service. This calls for the need of a standardized platform and the government's recent efforts suggest a bright future of the M2M industry
M2MAPPS: Finally, please tell us what you would like to see from companies in the M2M industry.
KEUNHO JUNG : The current market in the private corporation level is still in its infancy and I envision a much expanded market in 3+ years.
M2M services are not only applied in a given number of industries but in an extensive range of vertical markets. Further, the submarkets offer varying sizes where most are insignificantly small to a level that they are not capable of implicating a 'sizeable economy'. In other words, M2M is a longtail market that satisfies the needs of various businesses.
The market action plans initiated by the government should be followed up by partnership between M2M module manufacturers, solution companies, and device manufacturers. This includes co-development of M2M business models, sharing of business opportunities, and initiative for mutual growth. In doing so, M2M must be practiced in various industrial sectors in order to prove to the public that M2M is indeed an essential IT services technology in life.
