© gsm association 2010 strictly confidential © gsm association 2010 embedded mobile programme ton...
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© GSM Association 2010 Strictly Confidential© GSM Association 2010
Embedded Mobile ProgrammeTon Brand, Programme Manager Embedded Mobile
The GSMA Embedded Mobile ProgrammeWorking towards a Connected Life
© GSM Association 2010 Strictly Confidential
Mobile Beyond Voice
A WORLD OF CONNECTIONS…
Healthcare UtilitiesGovernmentConsumer Electronics Automotive
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© GSM Association 2010 Strictly Confidential
Embedded Mobile is gaining momentum…
3
For years the promise of M2M had been held back by :The fragmented nature of both, the technology vendors and the solutions they
provide. Network Operator fears of low ARPU (Average Cost per Unit) Lack of any single killer application
The complex nature of M2M solutions
An inability to express the benefits of M2M in anything other than cost savings, rather than exploiting the service enablement capabilities of M2M.
Now momentum is being generated by legislation in segments such as energy and automotive as well as mobile operators taking a more
serious look at this potentially huge opportunity
© GSM Association 2010 Strictly Confidential
Scenario Comparison (by 2020)
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-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
Realistic Medium High
Other
Transportation
Vehicles
Remote / Green Technology
Retail Outlets
Building Automaton
Maintenance
Office Metering / utilities
Office Security
Home Automation
Consumer Electronics
Smart Metering / utilities
Home Security
Public Healthcare
Home Healthcare
3.6B
7.6B
19.0B
© GSM Association 2010 Strictly Confidential
GSMA Strategy
The Embedded Mobile Programme has a three year outlook into the market.
Strategic objectives to be achieved by 2013:– Enable the market expansion to reach 500 million connected
devices• Create the conditions for the reduction of module costs and
the total cost of ownership• Reduce barriers associated with Test & Certification,
Provisioning, Wholesale and Roaming and Regulatory – Stimulate and accelerate innovation in the verticals of Health,
Transport, Utilities and Consumer Electronics
© GSM Association 2010 Strictly Confidential
Modules was the first step
Cost of modules can represent a considerable share of the total cost of device (e.g. 21% of Kindle);
2G module price previously declined by 10-15% year on year; Scale and production efficiency (e.g. Volume increase from 500,000
to 20mn units) brings down module prices on average by ~ 15%; GSMA objective: facilitate module price decline to its long-term
target by enabling scale.
2G low-end 3G
high-end 3G
$0
$40
$80
$120
Module Prices, US$2008 price
2009: < 500K units price
2009: 20m units price
Long-term price
Kindle component cost
Source: GSMA
4% Battery5% Multimedia App Processor
5% Printed Circuit Board
21% Wireless BB module
32% Display module
17% OtherCosts
15% Other Components
© GSM Association 2010 Strictly Confidential
Total Cost of Ownership is the next step
Device hardware costs are only a small portion of the total costs of ownership for embedded mobile service. While the cost breakdown will vary depending on a use case, the following ranges, calculated based on several specific cases, provide an indication of the cost drivers (as a percentage of the total cost of ownership (TCO))TOTAL COST OF OWNERSHIP % of TCO
Module Hardware 3%-7%
Certification – device level versus platform approach 4%-5%
Device Hardware and Non-recurring Engineering Costs (NRE, e.g. device development and integration)
20%-40%
Support – provisioning, activation, ongoing support and upgrades
9-25%
Connectivity and Value-Added Service costs– based on average revenue per user (ARPU) vs connections -oriented business models
30%-57%
Source: GSMA EM Guidelines release 1
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