3G and 4G modules will come to dominate the global machine-to-machine (M2M) market by 2018, predicted Berg Insight on Friday.
The research firm said that it expects the proportion of cellular M2M devices connected to HSPA and LTE networks will more than double from less than 20% at the end of this year to more than 50% in 2018. Berg Insight expects 3G and 4G to overtake 2G in 2017.
"There is a general trend towards higher data consumption for most traditional M2M applications", which require higher-capacity networks, said Tobias Ryberg, senior analyst at Berg Insight, in a research note.
"Secondly, the automotive industry is getting very serious about realising the vision of connected cars, which require mobile broadband connectivity. Early adopters such as GM (General Motors) and Audi recently introduced their first car models with embedded LTE in the U.S.," he said.
In May GM announced that 2015 will see the launch of its first vehicle with embedded LTE: the Chevrolet Malibu. It plans to roll out a further 30 LTE-capable cars by the end of next year. Meanwhile, the 2015 Audi A3 will also come with embedded 4G connectivity. AT&T is providing network access for both car makers.
Berg Insight said the growth of 3G and 4G in the M2M market is also being driven by the phasing out of 2G in some markets. For instance, AT&T plans to switch off its 2G network by the end of 2016, and in Japan, all three mobile operators have migrated from 2G to 3G and 4G technologies.
In Europe, Berg Insight said it expects the phase out to happen more slowly.
"The time horizons for continued operation of 2G networks generally extend well beyond 2020 in most [European] countries," the research firm said.