The M2M market is set to hit €15 billion by next year, as evolving technology becomes cheaper and more accessible and enterprises look for competitive advantage.
A new report from Juniper Research found that decreasing chipset prices would stimulate the market in the next few years.
Report author Anthony Cox said that by 2018, the installed base of cellular M2M devices will approach 500 million modules, with growth mainly coming from telematics and in-vehicle apps.
But while telematics is in rude health, smart metering is struggling to make headway, despite optimistic predictions and regulatory drivers.
According to Cox, operators are increasingly turning their attention to cloud-based APIs to help their M2M businesses but they should watch out for new competition.
"Operators continue to play a fundamental role in M2M but there is still significant scope for new players focussing on either new technology approaches, or a particular angle of the M2M market," he warned.
Meanwhile, a report into the North American M2M market found that tumbling costs were helping businesses increase M2M products, as they seek a competitive advantage.
According to Infonetics Research, enterprises remain concerned about security, regulatory issues and the complexity of M2M products. The quality of network was the top criteria for picking a service provider.
Godfrey Chua, Directing Analyst for M2M and Connected world at Infonetics, said: "So much of the discussion surrounding M2M has been focused on connections, but whether it is 20 billion, 30 billion, or 50 billion, there's no question that number is going to be huge. What hasn't been as clear is why this is happening. Why are enterprises buying M2M services?
"We asked enterprises what's driving their decisions to adopt M2M services, and the number-one factor is the never-ending pursuit of competitive advantage. This speaks to the need for M2M services to deliver a strong business case. As technologies continue to evolve and prices come down, enterprises will increasingly turn to M2M to lower operating costs, differentiate their brands, and create new revenue opportunities."