M2M applications use mobile radios that are built from the components originally designed to serve the cellular telephone industry. Although the functional requirements of M2M applications are relatively modest, it is less expensive just to use the full function, telephony-oriented components whose costs have been driven down by the volume of telephone handsets. M2M-oriented embedded modules are built from these general cellular components. These modules are designed to fit the specific needs of M2M applications, including manufacturability, form factor, power requirements, and data inputs and outputs.
The technology underlying the cellular telephone network has been evolving over the years as carriers have sought to support more users on their limited spectrum, and to provide more functionality in their phones. Originally based on an analog architecture, cellular networks next evolved to a more efficient digital foundation. The digital signaling technology of cellular networks then evolved to ever more efficient and functional versions. The data communications services of GSM digital cellular networks, for instance, started with a technology called GPRS, which has evolved through fundamental redesigns to newer and better versions, typically called 2G, then 3G, and now 4G. M2M applications, and the radio modules that they embed in their devices, also continue to evolve along these lines with the technology in the underlying cellular networks.
We now have enough history of M2M module development that we can describe the evolution path that modules will follow in these technology versions. The market has seen GPRS modules become widespread. Subsequently 2G modules have also evolved to relatively low prices and broad use. 3G modules -- and now 4G modules -- are making their appearance in the M2M market, and we can see that they are evolving through the same orderly pattern as the earlier technologies, GPRS and 2G.
First of all, M2M modules tend to lag behind the state of the art in cellular technology because M2M performance needs are so modest and because M2M applications are highly sensitive to device costs. 2G M2M modules appeared only after the technology had been pioneered in the cellular handset part of the industry, and 2G M2M modules reached wide adoption years after 2G cellular phones became the dominant handset technology. The enabling components for a new technology like 2G are used by the cellular handset industry first as carriers leverage the greater functionality and spectrum efficiency of the technology in the large mobile telephony market. A technology like 2G is incorporated into M2M modules only later after the telephony market has driven costs down enough to match the price sensitive requirements of M2M applications.
Secondly, modules of a given technology stage are relatively expensive when they first appear, and their price declines over time as they mature. Even though modules mainly use the components of cellular telephones and enjoy the scale economies of that much larger market, there is enough unique about M2M module design and manufacturing that they follow their own price curve. But there is definitely a price curve. 2G modules today are less expensive than 3G modules, which in turn are less expensive that the few 4G/LTE modules that are available. As the overall M2M market has grown, it has enabled M2M modules to reach ever lower price points. Today, 2G modules are less expensive than the earlier GPRS modules ever were. Over time, 3G and 4G modules should come down in price as the previous generations of M2M modules have done.
Third, even as their prices decline, M2M modules offer more functionality over time. This occurs in a consistent pattern as well. When a new generation of M2M modules first appears, it is essentially a bare radio that complies with the new wireless technology. There is very little other functionality in the module. Incorporating this radio module into a working device requires that a co-processor be used alongside the radio module to handle a number of communications functions. The co-processor has to implement higher level protocol functions (such as TCP/IP), control registration and re-registration processes, handle store-and-forward, provide power management of the radio module, and multiplex the different device inputs and outputs with the radio module.
Over time the price of the new generation module goes down, but its functionality also increases. No longer just a bare radio, the module incorporates the TCP/IP protocol stack. It also handles power management and the higher level communications functions that used to be performed by a co-processor. At this stage, a device processor is still required to multiplex I/O and some other functions, as well as to support the overall application logic of running the device itself.
When a module reaches the full maturity of its technology stage, it provides enough capability that an additional processor can often be eliminated from the device, thereby reducing the overall device cost. In additional to all the cellular communication functions, these modules are a complete M2M System on Chip (SoC). They provide a user programmable processor with memory, resources for program and data storage, and several integral I/O ports. They also frequently incorporate value-added functions like battery management, GPS processing, integral temperature sensors and accelerometers, and other functions. 2G modules are now becoming available with this high level of functionality that enables ever more cost effective M2M devices to be built.
M2M modules evolve over time in a predictable pattern. M2M modules in a new cellular technology appear well after that technology has been added to the cellular infrastructure and deployed in handsets. The prices of these M2M modules start relatively high, significantly higher than modules using older technology, and then decline over time as improved versions are introduced and volume grows. Those improved versions also expand the functionality of modules within the technology, from the bare radios that are initially introduced to full M2M systems-on-chips. GPRS and 2G modules have run through this full life cycle, and 3G modules are in the middle of this progression. 4G or LTE modules for M2M applications are only starting to appear, so they face many years of evolution before they are cost effective and widely adopted.
