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Research Report
Smart Meters, Advanced Metering Infrastructure, Home Area Networks (HAN), and Distribution Automation (DA) Technologies
Sam Lucero Practice Director, M2M Connectivity Stuart Carlaw Vice President and Chief Research Officer
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Section 1.
EXECUTIVE SUMMARY
1.1
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Remote fault detection: Remote fault detection helps to speed restoration of service in the event of power outages. Traditionally, utilities rely on customer service center calls and exploratory truck rolls to find and repair outage incidents. That method increases customer dissatisfaction and support costs at the customer service center and in field operations. Net metering: Net metering accounts for energy flowing back to the utility grid from a customer location as a result of distributed generation, such as from a customers rooftop solar panel array. When customers generate and return more power to the grid than they consume, they are often paid the difference by the utility. Smart meters help to facilitate net metering.
Key market adoption drivers and challenges for the smart grid include: Market Adoption Drivers Regulatory mandates Energy efficiency and reliability Operational efficiency Environmental concerns Improved customer service Reduced energy theft Energy market competition Market Adoption Challenges Evolving standards landscape Project complexity Business case complexity Project cost Consumer acceptance
1.2
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1.3
Chart 1.1
Total Smart Meter Installed Base by Region, World Market, Forecast: 2008 to 2015
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Section 2.
MARKET ISSUES
2.1
2.1.1
Figure 2.1 Infrastructure Elements and Technology Segments Comprising the Smart Grid
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This study focuses on the use of smart grid communication technologies with electricity meters and infrastructure. ABI Research provides an overall forecast of gas and water meters (excluding heat meters, which are only a small portion of the overall worldwide installed base of meters). Advanced metering technology is being integrated into gas and water meters, but these are secondary markets with their own dynamics, vendors, and use cases. Such markets are oriented mainly toward simple AMR functionality. Typically, when gas and/or water meters are also present and the collocated electricity meter is being turned into a smart meter, the gas and/or water meters are connected via radio frequency links to the smart electricity meter, and through the smart electricity meter to the utility.
2.1.2
2.1.2.1
2.1.2.2
2.1.2.3
Remote Connect/Disconnect
Remote connect/disconnect eliminates required truck rolls to customer premises to initiate or deactivate power when the customer is moving in or out or for non-payment of utility bills.
2.1.2.4
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Net Metering
Net metering accounts for energy flowing back to the utility grid from a customer location as a result of distributed generation, such as from a customers rooftop solar panel array. When customers generate and return more power to the grid than they consume, they are often paid the difference by the utility. Smart meters help to facilitate net metering.
2.1.3
2.1.3.1
Regulatory Mandates
Regulatory mandates, in the form of rules or legislation, are directly and indirectly driving the smart grid market, and tend to have particular impact, given the central role of regulations in utility operations. In a direct sense, mandates such as Ontarios Smart Meter Initiative require regulated utilities to plan and deploy smart metering systems. Indirectly, national and transnational initiatives (such as the US Federal Energy Policy Act of 2005 and Article 13 of the European Unions Energy Services Directive) outline broad energy efficiency and reliability guidelines and targets, which encourage many local governments and utilities to opt for smart metering to meet these goals.
2.1.3.2
2.1.3.3
Operational Efficiency
Automating utility processes, such as meter reading, connect/disconnect, and fault detection, offer significant operational efficiency gains and expense reduction. For example, SRP, the Arizona utility estimates that in 2006 it saved 85,000 miles in vehicle expenses with 85,000 remote field orders and over 9,000 remote connects and disconnects completed. An additional component of operational efficiency gains derives from the aging utility workforce in North America and Europe, which is leading many utilities to search for ways to increasingly automate utility processes.
2.1.3.4
Environmental Concerns
Many state, provincial, national, and transnational (such as the European Union (EU) governments are becoming more and more concerned about the negative impact of energy consumption on the environment, particularly the effect of global warming. These governments are seeking ways to ameliorate this negative impact, and increasing energy efficiency is emerging as a key solution. This trend influences the regulations and legislation enacted by governments that affect the utility industry and helps to drive smart metering as one path toward energy efficiency. For example, the EUs Energy Services Directive explicitly cites improved end-use energy efficiency as a path toward reducing greenhouse gas emissions. Other governmental position papers on smart metering, such as those from the Irish national government and the Ontario provincial government, also link energy efficiency and environmental benefits.
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2.1.3.6
2.1.3.7
2.1.4
2.1.4.1
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Standards are increasingly seen by the utility industry as an important means of fostering supplier competition and thereby lowering costs. In addition, standards help to facilitate more and more complex smart grid network deployments. While a plethora of standards currently exist, todays standards landscape is seen by industry participants as insufficiently developed for the needs of smart grid deployment. As discussed in Section 3.2 of this report, significant efforts are underway to provide a coherent framework for the use of existing standards, such as ZigBee and Internet Protocol (IP) by the utility industry, as well as to develop new standards to fill in any perceived gaps in needed standardization.
2.1.4.2
Project Complexity
The deployment of smart metering projects are complex for several reasons: Projects entail a significant logistical coordination in the deployment of millions of meters and other infrastructure and systems in a manner that maintains customer service levels in a highly regulated industry. There is an overabundance of technology options available and insufficient smart metering standardization, which means that each project tends to be highly customized and must be planned accordingly. Data management needs to increase significantly, as the overall volume of information the utility receives could increase with the shift from monthly meter reads to fifteen-minute interval reads. Significant process changes are required for a utility to transition to smart metering and they affect many entities within the utility. For example, traditional meter reading operations will alter fundamentally with AMR capabilities, and achieving internal organization support for the project can be daunting. Utilities must work closely with regulatory authorities throughout the planning process, which adds additional burden to the project.
2.1.4.3
2.1.4.4
Project Costs
Smart metering deployments can be enormously expensive. For example, California-based utility Pacific Gas & Electric (PG&E) is in the process of deploying 10 million smart meters by 2011 at a cost of $1.7 billion. Of this amount, approximately $1.4 billion is for capital expenses, $200 million is for non-capital expenses associated with the project, and $100 million has been set aside as a contingency fund. Similarly, the two other main Investor-
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Owned Utilities (IOU) in California Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E) have each launched smart metering deployment plans that will cost an estimated $2.0 billion and $572 million, respectively. However, given that utilities operate in regulated environments, the primary challenge is not access to capital for the deployment of smart metering systems (although the market is costsensitive). Rather, the challenge is the additional complexity of having to secure regulatory approval for adequate rate recovery to pass the costs of the smart metering project onto customers. For example, SDG&Es original proposal was rejected by the California Public Utility Commission (CPUC) on the basis of certain components in its financial model. SDG&E had to revise its plan, incorporating new technological, administrative, and financial elements, in order to obtain CPUC approval.
2.1.4.5
Consumer Acceptance
As smart grid deployments have been undertaken in increasing size and frequency, evidence of consumer attitudes towards, and acceptance of, smart meters and DR functionality have become available, and the results are not always positive. First, there appears to be increasing consumer resistance in California to PG&Es smart meter deployment, with the chief concern that the technology may be reporting customers electricity usage inaccurately, leading to higher bills. PG&E disputes this, but local lawmakers are attempting to sort out this issue. There have been reports in the media about consumer dissatisfaction in other locations and countries, as well. Second, it appears in early DR trials that consumer interest and participation tends to decrease after the first nine to twelve months. This points to a need to better design DR programs and consumer User Interfaces (UI) to DR functionality.
2.2
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In the following sections, we will expand the value chain/competitive landscape discussion with a fuller analysis of the utility landscape, and the role of smart meter and AMI technology vendors, HAN/DR vendors, as well as communication and cellular connectivity and turnkey managed services providers.
2.2.1
Utility Landscape
Utilities come in numerous forms, and categories vary around the world. There are approximately 3,000 utilities in the United States, with some of the largest with millions of customers each comprising IOUs such as Florida Power & Light and Pacific Gas & Electric. In the United States, utilities are segmented as IOUs, cooperatives, and political subdivisions, municipal and municipal marketing authorities, curtailment service providers, and power marketers, federal and state utilities, and Independent System Operators/Regional Transmission Organizations (ISO/RTO). Utilities customers are often segmented into: residential, commercial, industrial, other, and wholesale sectors. This leads to a division of meters into residential meters (also called mass market meters) and Commercial and Industrial (C&I) meters. C&I meters are more expensive and offer greater functionality. Approximately 13% to 17% of electricity meters in the United States are C&I meters. It is important to note that utilities are regulated entities, both in the United States and internationally. In the United States, the principal responsibility for utility regulation rests with the states public utility commissions sometimes called Public Service Commissions (PSC)). However, other government entities at the state and federal level also have a role in utility regulation. As discussed elsewhere in this study, regulatory activity continues to be a prime driver for smart grid deployments. An aspect of regulatory oversight of the utilities that has a tangential effect on the growth of the smart grid is the push for increasing competition in the utility sector, primarily by unbundling the retail provisioning of electricity from power generation and T&D. This push is particularly strong in Europe, though it has happened unevenly across the continent. Some countries in the region especially in the north have made more progress at developing competitive market environments. To the extent that standards are in place, smart meters help to facilitate competition and, in turn, REPs will increasingly offer differentiated retail electricity services built on the capabilities of the smart metering platform. Such offerings tend to encourage further deployment of smart grid technology in a virtuous cycle.
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Smart Meters for Smart Grids 2.2.2 Smart Meter and AMI Technology Vendors
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The metering industry is highly concentrated, with the majority of meter sales comprising a handful of players on a worldwide basis. Nevertheless, in the past decade, a host of newer meter vendors has appeared, primarily targeting less-developed markets with cost-optimized products. One major meter vendor estimates there are approximately 500 meter manufacturers worldwide. In North America, the leading meter vendors are: Itron, Elster Electricity, Landis+Gyr, Sensus Metering Systems, and GE Energy. These vendors also have a significant presence internationally, especially Elster, Itron, and Landis+Gyr. Iskraemeco, as well as newer vendors, such as Echelon, NURI Telecom, and Holley Metering, are also important international players and are gaining traction with their emphasis on smart meters. The major meter vendors have a long history with the operations of most going back 100 years or more in one corporate guise or another. For example, Elster Electricity traces its corporate heritage back to 1836 with the founding of American Meter Company (AMCO) in New York. Not surprisingly, these meter vendors have built longstanding ties to the utility industry. Some vendors say that the utility selects the meter first, with supporting technology a secondary consideration. The meter is the cash register of the utility, and utilities are conservative about the meters they deploy into their infrastructure. However, with the advent of the smart grid, newer vendors focusing specifically on the communications aspect of smart metering have entered the market. The vendors provide systems comprising hardware and software that is integrated under glass in the digital meter itself, as well as in various in-field nodes in the NAN and WAN, and finally in the utilitys head-end systems. This market dynamic is illustrated in Figure 2.3.
Figure 2.3 Meter Vendor and AMI Technology Vendor Convergence on the Smart Meter Market
What Figure 2.3 is not able to demonstrate is the close interrelationship between the meter vendors and the AMI technology vendors. Each of the major meter vendors, with the exception of GE Energy, has introduced its own AMI technology offering. For example, Itron offers OpenWay, while Elster provides the EnergyAxis system. However, each of these vendors
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with the exception of Echelon, which is tightly wedded to its own Networked Energy Services (NES) AMI technology also enables other vendors technology to be integrated into its own meters. This is essentially a result of the view that the utility ultimately controls the technology decisions in a deployment and may opt for a heterogeneous meter/AMI technology environment. The meter vendors are quite happy to support this; at the end of the day, they simply want to sell meters, even if their AMI technology is not being used as part of the smart meter deployment. The fact that vendors are somewhat agnostic to the actual smart metering technology they provide to their customers is good news for the remaining independent AMI technology vendors. Such dealers will have a growing market opportunity for two reasons, despite the move of meter vendors to develop or acquire smart metering technology. First, ABI Research believes many utilities will select the technology first and then the meter. Second, the meter vendors are likely to remain agnostic to the smart metering technology they provide, even as they see the importance of having an in-house option for customers.
2.2.3
HAN/DR Vendors
The HAN/DR market is still in an early stage of development in terms of business models and technologies and this, along with the overarching growth trend of the smart grid in general, has led to a large influx of different kinds of vendors into the space. The competitive landscape for HAN/DR comprises pure-play vendors, such as Tendril and GridPoint; utility software vendors, such as eMeter; home automation vendors, such as Control4; enterprise software vendors, such as Microsoft; and networking equipment providers, such as Cisco. In September 2009, AMI vendor Silver Spring acquired HEMS vendor Greenbox. In this section, we assess the market trend towards providing HAN/DR platforms as opposed to point solutions, and how this impacts likely consolidation in the industry. We also discuss the impact of the recent entry of Google and Microsoft into the HAN/DR market, which has received tremendous press coverage, but has relatively minimal practical impact, in our view. Figure 2.4 provides a graphical representation of the HAN/DR vendor landscape.
Figure 2.4 Vendor Segments Active in the HAN/DR and HEMS Markets
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Platform Plays
As with other technology markets (smartphones), the HAN/DR market is seeing a strong push by vendors seeking to offer platforms, rather than closed point solutions. This is particularly evident for those vendors seeking to serve the utility and service provider segments of the market, though it is true for home automation vendors seeking to offer energy management capabilities, as well. In the context of the HAN/DR market, a platform entails a combination of client software serving as the controller/gateway intelligence in the home, paired with back-end server software at the utilitys or service providers AMI head-end. This platform enables third-party hardware and software applications (PHEV recharging, for example) to be integrated into the service offering without significant reconfiguration of the back-end software implementation. Figure 2.5 is a diagram of Tendrils TREE platform to illustrate the central platform concept.
Figure 2.5 Tendrils TREE Platform as an Illustration of the Central Platform Concept
ABI Research believes that these platforms, from companies such as Tendril and GridPoint, will increasingly be the method that utilities and service providers use to offer HAN/DR services, due to the ability to integrate the platform once on the back-end, and then extend the capabilities of the system with various applications as the market develops. This is simply a more efficient and extensible model than trying to assemble disparate pieces of system software and hardware from various vendors and either have the utility integrate all of these pieces, or, more likely, have a systems integrator or consultant write custom software to integrate the pieces. 2.2.3.2
Consolidation Trends
ABI Researchs belief about the value of platforms in the HAN/DR market does have implications for competitive landscape trends. They include: Current HAN/DR platform vendors are likely to be acquired over the next few years. These companies tend to be smaller, closely held entities in a market that is likely to place more value on large established vendors with proven resources and longevity. Likewise, large public enterprise software vendors, such as Microsoft, Oracle, and SAP are increasingly focused on the smart grid opportunity, and given the intersection of the back-end software portion of the HAN/DR platforms and the MDM and other utility software the large enterprise software vendors want to offer, acquisitions of the platform
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vendors would be a natural fit. We could also see the AMI vendors, including the smart metering dealers, making a play in this segment, as Silver Spring did with Greenbox. We believe the long-term market opportunity becomes somewhat more problematic and challenging for those home automation vendors that are seeking to make a HAN/DR play by targeting utilities and service providers. They will need either to place more focus on the energy management aspects of their offers and, especially on the utility side, likely be acquired in a similar manner as the HAN/DR vendors above, or else see the market opportunity shift away from them as the trend described in the first paragraph plays out. A related challenge for them on the utility side will be the more general-purpose nature of their offerings. While this is effective for a broadband or telco service provider seeking to roll out a bundle, their platforms may not be as optimized for energy management as are those of the pure-play HAN/DR vendors. Of course, to the extent that third-party apps and hardware are integrated into the system, this may be a moot point. We do not see the same trend toward consolidation happening in the standalone HAN/DR market or the part of the home automation market that is focused on enabling standalone energy management capabilities. While it is possible that overall energy efficiency trends in the market may prompt a large home systems company to acquire a home automation or standalone HAN/DR vendor to offer a product, we do not see the same drive in this segment as in the utility/service provider space to scale up and offer a service platform tied to back-end systems.
2.2.3.3
2.2.4
2.2.4.1
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provider like Arcadian Networks, which supplies licensed connectivity to the utility sector in the 700 MHz frequency band, particularly in rural areas. This has also become the standard means of WAN connectivity in European smart grid deployments, with GSM/GPRS the preferred air interface standard. MNOs such as Sprint and Rogers Communications typically seek to provide bundles of services beyond simple meter data backhaul. For example, Sprint will sell smart meter connectivity services, mobile voice communications services, and mobile worker data services (such as fleet management and utility operations management) to the utility. While MVNOs are active in the smart metering market, ABI Research believes MNOs have an advantage in that they can offer such bundled services and have more brand recognition, which is important in the conservative utility industry. Likewise, a key selling point for MVNOs is their ability to provide extensive, often international, coverage; utility operations tend to be localized. In 2009, AT&T became active in offering highly flexible rate plans designed for the utility industry, with the goal of enabling utilities to connect every smart meter directly to the cellular network. Utilities typically need per-meter monthly ARPU below $1.00 for this to become an attractive proposition. AT&T is working closely with its partner, SmartSynch, in this effort. The drive to connect every smart meter directly to the cellular network mirrors developments in some of the Nordic countries, where Telenor has been quite successful in working with utilities to link every meter to the cellular network, at an annualized ARPU of approximately $7.00 to $9.00 per meter. Although ABI Research does see greater penetration of an all-cellular network topology for smart metering occurring over the next several years, it is doubtful that there will be a fundamental shift away from the current model of using various NAN technologies in conjunction with WAN backhaul, particularly in the United States: First, regulated utilities typically earn a guaranteed rate of return on capital investments such as investments in utility-owned NAN infrastructure that they do not receive for operational expenses, such as monthly cellular connection fees. (We should note here that AT&T is encouraging regulatory authorities through its state lobbying efforts to have operational expenses treated on a more level playing field along with capital expenses.) Second, cellular embedded radio modules are a significant BOM cost-adder to the smart meter itself, compared with the lower expense of adding a short-range wireless radio or PLC modem. Third, some utilities regard the two-tier NAN/WAN topology as a way to insulate themselves from potential future-proofing challenges associated with advancements in public cellular network infrastructure, as MNOs evolve their networks from 2G to 3G to, and eventually, 4G. It is a less-costly proposition to change a few thousand cellular WAN gateway/backhaul nodes than it is to upgrade millions of smart meters in the field to a new cellular air standard.
2.2.4.2
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There is some regional disparity in the prevalence of fully outsourced solutions: they appear to be much more popular in the Scandinavian countries and Northern Europe in general, compared to Southern Europe. In Southern Europe, the fully outsourced model is challenged by the existence of the many thousands of unionized utility workers for whom employment must be found even as the utilities become more operationally efficient. Therefore, keeping the management of the smart grid infrastructure and processes in-house becomes more attractive as a means to protect jobs.
2.3
2.3.1
Regional Trends
North America
The North American market has seen deployments of smart grid technology since the early 1990s and this region has the longest experience with smart metering. There also have been fairly substantial prior deployments of AMR, both fixed and mobile, with some estimates as high as 30% for one-way AMR market penetration. While California and Texas tend to garner much of the attention for their efforts to roll out smart metering infrastructure, other states have been making significant progress. In terms of the highest penetration of smart meters into the total meter base, the five leading states in 2008, according to the Federal Energy Regulatory Commission (FERC), were: Pennsylvania (23.9%), Idaho (13.8%), Arkansas (11.3%), North Dakota (8.9%), and South Dakota (8.7%). The top five states by total number of smart meters were: Pennsylvania (1.44 million), Texas (868,204), Florida (765,406), Georgia (342,272), and Missouri (204,498). In Canada, the provincial government of Ontario launched the Ontario Smart Meter Initiative with the goal to have smart meters replacing the approximately 2 million traditional devices in the province by the end of 2010. A significant deployment is also planned for the province of Alberta. Both of Mexicos main utilities are in the early stages of investigating the use of AMI, with prevention of energy theft a key goal. The result of the relatively long time span of AMI deployments in North America is a heterogeneous smart meter communications technology profile. In contrast to Europe and the Asia-Pacific region, RF connectivity comprises a majority of the installed smart meter base, with power line the second most-used technology at the NAN level. Also a result of the long time span of North American AMI deployments is the greater reliance on private utility networks and third-party, utility-centric primary-use network providers such as Tantalus for smart metering WAN connectivity. In effect, utilities have had to develop their own WAN connectivity options due to the early start of North American AMI, as cellular network providers have only recently begun to support metering operations directly. The market drivers for smart metering specific to North America include: US federal legislation seeking to promote the deployment of smart metering. Some state and provincial governments are actively encouraging the conversion to smart meters for environmental, energy conservation, improved customer service, and energy reliability reasons. A competitive energy market in Texas is encouraging the deployment of smart metering in part to facilitate service provider change-out and service differentiation.
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In contrast, the heterogeneous nature of the connectivity market may be slowing overall smart metering growth in North America and perhaps other parts of the world, due to increased complexity in vendor and technology selection. ABI Research anticipates the diverse nature of the communications market for smart metering in North America will continue over the next five years, given the long lead times and sales cycles in the industry. It is possible that national mandates will emerge in the United States, Canada, and/or Mexico for smart metering, depending on factors such as growing political motivation for increased energy efficiency.
2.3.2
Europe
The European smart metering market was essentially initiated in 2001 when Italian utility ENEL announced its intention to replace all 27 million of its electricity meters by 2006 with smart meters using power line and GPRS connectivity. This is the single largest smart metering deployment in the world to date. Smart metering is occurring all over Europe. Major trials and deployments have been announced in Austria, France, Germany, Ireland, Italy, the Netherlands, Spain, and Sweden. In France, a deployment by lectricit de France (EDF) of a reported 44 million meters would be the largest such installation in the world, when it occurs. Germany introduced a law that all new and retrofitted buildings must be connected with smart meters. Ireland is getting ready to deploy smart meters to approximately 2 million homes and businesses. The Netherlands defined a specification for minimum functionality in preparation for a planned nationwide rollout of smart metering. Spain will require all meters to be replaced with smart meters by 2018. The British government plans a nationwide rollout of smart meters to be completed by 2020. Unlike North America, the AMI deployments in Europe have been fairly homogenous to date, with most projects utilizing power line technology in the NAN and GPRS in the WAN for connectivity. There are several factors behind this homogeneity: The massive ENEL deployment and more recent introduction of AMI into the market mean that European utilities are starting with the same ideas on how to deploy smart metering. The ubiquity of GSM/GPRS as a WAN connectivity option. The absence of a third-party utility-centric primary-use ecosystem due to an established AMR footprint. The prevalence of indoor utility meters, making RF-based communications more problematic in some cases.
The market drivers for smart metering specific to Europe are: A strong European-wide push toward increased market competition, which should favor the deployment of smart meters similar to the situation in Texas. The interpretation by some EU countries of Article 13 of the Energy Services Directive (ESD) as a mandate to enact smart metering initiatives for nationwide rollouts and, in some cases, smart meter standards. Relatively higher wages and a more regulated employment landscape throughout Europe, which tend to encourage utilities to be aggressive in finding ways to increase operational efficiencies. The development of turnkey meter technology/hosted service plans by vendors such as Telenor Cinclus and Landis+Gyr, which reduce the complexity and costs of smart metering deployments for utilities.
ABI Research believes there are no significant challenges to smart metering rollouts exclusive to Europe.
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The Asia-Pacific region has only recently started to see deployments of smart metering technology. Australia appears to be in the forefront in AMI deployments, as well as in activities at the national and state level to develop a plan and legislation. New Zealand seems to be moving toward development of a national smart metering initiative. The rest of Asia has seen less traction for AMI, though there are indications that smart metering is occurring, particularly C&I, rather than residential deployments. One Asia-Pacific-based vendor states that smart metering deployments are occurring on the southeast coast of China, and AMI reportedly figures into Chinese government economic planning. (We should also note that there are press reports of a major planned rollout of smart meters by Chinas State Power Grid Corporation that potentially involves tens of millions of meters. As of this writing, we have been unable to confirm these reports.) Smart metering deployments are occurring in South Korea, Malaysia, Singapore, and India. There have been trials and deployments of power line carrier and fixed RF smart meter deployments in Australia, the leading market, including a recent announcement by Australian utility SP AusNet on the use of WiMAX technology in smart metering. Nevertheless, it is still too early to say if the Asia-Pacific region as a whole will follow more of a European PLC/cellular model or a North American fixed RF/heterogeneous WAN model. For the purposes of the forecast in this report, ABI Research is assuming that the Asia-Pacific region falls somewhere between North America and Europe in terms of a PLC/fixed RF mix. The market drivers specific to smart metering in the Asia-Pacific region are: Certain countries, notably Australia, New Zealand, Singapore, and, apparently, China, are actively encouraging the adoption of smart grid deployments. There is a desire on the part of utilities in some countries to reduce energy theft, which encourages the adoption of AMR and smart metering.
On the other hand, AMI in the Asia-Pacific region faces certain challenges: There is much less coordination on AMI in this region compared to Europe. Due to lower wages and less regulated working environments, as well as a younger population in many countries, there is less need to automate metering operations. Therefore, it is more difficult to make a financial case to justify investment in smart metering technologies. Many countries are less economically developed than North America or Europe. Consequently, there are fewer meters per capita to automate, albeit a greater total base of meters. Also owing to the relative state of economic development, there is less likelihood of HAN adoption in the region as a whole in the near term. However, Australia and perhaps a few other countries, such as South Korea and Japan, may move more quickly on HAN deployment.
2.3.4
Latin America
Latin America is at an early stage of AMI technology deployment. ABI Research has found instances of such deployment or development plans in Ecuador, Honduras, and Trinidad and Tobago. There appears to be increasing interest in the region for smart metering, driven mainly by the desire to reduce or prevent energy theft, in addition to increasing overall operational and energy efficiency.
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The key challenges for AMI deployments in Latin America are similar to those in the Asia-Pacific region: There is much less coordination on AMI in Latin America than in Europe. Due to lower wages and less regulated working environments, as well as a younger population in many countries, there is less need to automate metering operations. Therefore, it is more difficult to make a financial case to justify investment in smart metering technologies. Most countries are less economically developed than North America or Europe. Consequently, there are fewer meters per capita to automate, albeit a greater total base of meters. Also owing to the relative state of economic development, there is less likelihood of HAN adoption in the near term.
2.3.5
2.4
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The three main reasons that governments at all levels have been working to encourage smart metering and the broader concept of the smart grid are: To improve energy efficiency and environmental protection To increase market competition/liberalization and improve customer service To secure the supply, transport, and delivery of energy
Government policy actions take several forms: Creating mandates Developing funding mechanisms Providing incentives for utilities and other stakeholders Establishing standards and frameworks Providing information on best practices and market benchmarks
2.4.1
North America
Governmental policy action on smart metering first occurred at the state/province level in North America in the early part of the previous decade. California, Texas, and the Canadian province of Ontario have been in the forefront of smart metering policy development. However, with the US Energy Policy Act of 2005 (EPAct) and the Energy Independence and Security Act of 2007 (EISA), the federal government is becoming a driving force in smart metering market development. Federal actions, in turn, further encourage and direct state legislative and regulatory activity on smart metering policymaking. The following are some of the key US federal legislation impacting the deployment of smart metering, as well as a description of activities in California and Texas. Please note that these are highlights rather than an exhaustive or comprehensive description of all of the governmental activities taking place in North America. For example, the US Emergency Economic Stabilization Act of 2008 provided an important benefit to utilities with respect to smart grid deployments: it enabled utilities to depreciate smart grid assets over ten years rather than the traditional twenty years, reducing the utilities tax obligations. In addition, in November 2009, approximately $3.4 billion was awarded to utilities as part of the American Recovery and Reinvestment Act of 2009 (ARRA) as matching grants for smart grid deployments.
2.4.1.1
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2.4.1.3
California Smart Metering Largely Results from a Mandate for Energy Efficiency and Reliability
Californias smart metering efforts largely originated with the California Public Utility Commissions actions to increase both energy efficiency and energy reliability. These actions are a result of a longstanding state government position encouraging energy efficiency, which has been further advanced in reaction to the 2001 energy supply crisis. The CPUC points out that over the past thirty years, while per-capita electricity consumption in the United States has increased by nearly 50%, such use in California has remained approximately level. The CPUC, working closely with the three largest utilities in the state Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric issued its first Energy Action Plan in 2003. This plan was updated in 2005 and cites DR programs as key energy efficiency goals. In addition, utilities are offered incentives to implement DR programs. In 2004, the CPUC required utilities to assemble business cases for AMI deployments, specifically to enable the electric utilities to offer CPP programs. Representatives of utilities in California say there is strong support for such initiatives from the Governors office. Utilities update the CPUC every six months on technology development and AMI deployment plans. The utilities must have CPUC approval of the technology vendors they select for their AMI deployments. As in other states, the CPUC sets electric rates and a key aspect of AMI deployment in California has been the CPUCs willingness to allow utilities to increase their rates to recover the cost of these installations. For example, PG&E received approval to recover $1.7 billion for its AMI deployment that begun in 2006 and is set to be completed in 2011. Approximately $1.4 billion is marked for capital expenses, including the meters themselves, installation costs, and the network; $200 million will cover non-capital expenses associated with the project; and $100 million is set aside as a contingency fund. PG&E expects to transition 100% of its 10 million meters to AMI capability by 2011.
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Texas Smart Metering Driven both by Regulatory Mandate and Retail Competition
The deployment of smart metering in Texas is driven by an intersection of light government mandates at the state and PUC level, as well as competitive market forces. Competition in the retail provisioning of energy encourages the use of AMI as a services differentiator. Government mandates have created the aggressive market landscape that both directly and indirectly encourages (but does not require) the deployment of AMI technology. In 2005, the Texas state legislature passed HB 2129 to support the adoption of technologies that would improve air quality through energy efficiency. A section of the law requires utilities to consider Advanced Metering Systems (AMS) the Texas legislatures term for AMI as a means of achieving the efficiency goals of the legislation. In May 2007, the Texas PUC published Rule 25.130 concerning AMS implementation by utilities. While this rule does not require them to deploy AMS, it does mandate that utilities seeking rate recovery for their deployments must meet certain conditions for AMS functionality, including: Two-way communications to and from the meter Remote connection and disconnection At least fifteen-minute interval data Direct real-time access by customer and REP to meter data Communication with premises devices Use of open standards, with ZigBee and HomePlug specifically named in the rule
Additionally, in January 2002, Texas launched a competitive energy market. Essentially, this separates energy generation suppliers and T&D suppliers from REPs in the value chain. In contrast to a vertically integrated utility, in the Texas model the REPs compete to manage the end customer relationship, including marketing of energy supply, billing, and customer service functions. The key Texas REPs include Reliant Energy, TXU Energy, Commerce Energy, CPL Retail Energy, First Choice Power, Green Mountain Energy, and CPS Energy. In some cases, REPs are owned by parent companies that also own generation and T&D businesses. This is the case with TXU, which not only owns the TXU Energy REP, but also the Oncor T&D business, and the Luminant generation business. REPs in Texas claim that AMI technology will help them to better compete through services differentiation. As electricity is essentially a commodity product, differentiation comes in the form of marketing and customer service. AMI will enable REPs to further develop and distinguish the types of services they can provide to their customers. A key aspect of this service differentiation will be standardized interfaces used in AMI systems. Because the smart meters themselves will be deployed and operated by the T&D vendors, REPs will have to be provided with standard ways in which to access and utilize the meter data and smart meter functionality. This is supported by the Texas PUCs requirement for the use of standard communications technologies, such as ZigBee and HomePlug.
2.4.2
Europe
In Europe, much of the impetus for smart grid legislation and regulation has come from the European Union transnational government entities. The EU has emphasized a more centrally coordinated deployment of smart metering that has only recently begun to be matched by the US federal government with respect to state activities. The key EU-level pieces of legislation that have a bearing on smart metering include: European Directive 2003/54/EC, European Directive 2006/32/EC, and the Third Energy Package. These are discussed in more detail below. In addition, as of January 2009, nine European countries
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have enacted some form of legislation or regulation that either directly or indirectly mandates or otherwise strongly encourages the adoption of smart metering. Those countries are Estonia, Finland, Germany, Italy, Portugal, Romania, Spain, Sweden, and the United Kingdom. Additionally, another six countries are actively investigating the introduction of such legislation or regulation. They are Austria, Hungary, Ireland, Latvia, the Netherlands, and Norway. 2.4.2.1
2.4.2.2
The United Kingdom is one member state that has moved aggressively to implement EU directives on energy competition and efficiency. The country has one of the more competitive electricity and gas markets in Europe. In 2006, in response to the ESD, as well as the governments stance urging the improvement of environmental conditions and combating climate change, the UK began to establish policies that will promote smart metering. In October 2008, the government announced a goal for the conversion of all UK business and residential electricity and gas meters to smart meters over a ten-year period from 2010 to 2020. This would impact 26 million homes and involve 46 million electricity and gas meters. In December 2009, the government announced a framework for the deployment of a central hub communications system separate from the utilities T&D network that will consolidate and transmit energy consumption data from smart meters to the various utilities. This is meant to ensure ease of consumer choice in a competitive utility market. 2.4.2.3
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Section 3.
TECHNOLOGY ISSUES
3.1
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Advanced age of grid infrastructure Industry sources report that much of the current electric grid infrastructure in developed countries is aged and will soon have to be replaced, even with equipment similar in functionality to current systems. In response to these challenges and in conjunction with plans for energy efficiency and the development of a green economy, many governments are investigating smart grids. The key functional components of these grids are the deployment of equipment at various points that integrate localized intelligence and are capable of two-way communications with the utilities network operations centers; high speed interconnection and transmission lines; and the necessary software in the utilities back-end systems to monitor and manage these systems and the resulting large increase in data coming to the utilities. Smart meters are an integral part of these deployment plans, but are only a part of the smart grid story.
3.2
3.2.1
International Standards
Smart grid standards include application-layer protocols for the smart meter itself (mainly metrology functionality for organizing meter data), control of HAN functionality, T&D automation, and the interconnection of data from the electric grid to utility back-end server infrastructure. In addition, these standards also comprise physical- and networking-layer communication protocols. The key standards are listed below. (Please note that we have not listed standards such as ZigBee, HomePlug, Web Services/XML, Internet Protocol, CDMA, and GPRS, among others, that are used in, but are not exclusive to, smart grid deployments.) ANSI C12.19 and C12.22 C12.19 and C12.22 are standards from the American National Standards Institute (ANSI) that define how to structure meter data (C12.19) and how to format the resulting structured data for transmission over heterogeneous communication networks. An analogy would be taking tax data from different sources and placing it into a standard government tax form (C12.19) and then mailing that tax form to the government in an addressed, stamped envelope (C12.22). These standards are relevant in the United States and in the rest of North America, Latin America, as well as a number of other countries, such as Taiwan and the Philippines. IEC 62056 and DLMS/COSEM The Device Language Message Specification/Companion Specification for Energy Metering standard is the European equivalent of ANSI C12.19 and C12.22. DLMS is a data modeling standard similar to C12.19, while COSEM is used for data exchange, similar to C12.22. This standard is used in many countries outside of Europe, as well. The International Electrotechnical Commission (IEC) has adopted DLMS/COSEM as the IEC 62056 family of standards. M-Bus M-Bus is a European standard enabling electricity meters to communicate with collocated gas, water, and heater meters. The standard defines both application and networking layer protocols as well as a two-wire wired physical layer and a wireless physical layer. Wireless M-Bus operates on the unlicensed 868 MHz frequency band. IEC 61850 IEC 61850 is an international standard from the IEC that defines a data modeling protocol for electrical substation automation data, as opposed to the smart meter itself. The protocol is meant to be used with a variety of networking and physical layer communication protocols.
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Again, please note that these standards do not represent the sum total of all of the various technologies used in the smart grid, but rather are key standards relevant to smart grid deployments as of the writing of this report. It is also important to note that there is still widespread use of non-standard technologies, particularly in NAN communications. Many smart meter vendors have their own proprietary NAN communications technologies, typically based on short-range wireless solutions using 900 MHz unlicensed spectrum. Smart meter vendor Echelon bases its power line NAN communication platform on its LonWorks, a general purpose communications technology that has been standardized for building, industrial, and transportation system communications in the United States, Europe, and China. However, LonWorks is not yet standardized as a smart metering communications technology.
3.2.2
Government Mandates
Prior to 2009, governments generally mandated the use of specific technical standards with respect to smart metering and DA systems. A few governments promulgated minimum levels of functionality to which smart meters and related infrastructure in their jurisdictions were required to comply. The most notable of these actions have been: The Netherlands NTA 8130 standard The Texas Public Utility Commissions Rule 25.130 The Statutory Order by the State of Victoria in Australia concerning a Minimum Functionality Specification for AMI
Starting early in 2009, however, there have been two significant government actions with respect to smart grid standardization: the NIST smart grid framework development process in the United States, and the M/441 Mandate from the European Commission (EC) in the EU. Significantly, both actions are efforts relevant to the smart gird to develop frameworks, or suites, of existing standards along with identifying gaps in standards that need to be filled. Both rely heavily on collaborative contributions from public and private stakeholders, including vendors and standards development organizations. NIST should have its recommendations out in 2010 while the EC effort should be available by 2011. Both efforts are in relatively early stages. As of December 2009, it remained unclear which will have more impact, or the chances for reconciliation between the two frameworks. A standards bifurcation exists in the metering world between North America, and certain other countries, which utilize ANSI-standard meters, and Europe and much of the rest of the world, which utilize IEC-standard meters. It may be that the respective smart grid frameworks will simply be applied along this existing international demarcation. 3.2.2.1
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Phase three is underway and comprises coordinating the work of a variety of international Standards Development Organizations (SDO) to refine the capabilities of existing standards and develop new standardized capabilities to meet the needs of the smart grid. Additionally, this phase will seek to create testing, certification, and compliance mechanisms for smart grid interoperability. This work is set to be complete by year-end 2010. 3.2.2.2
3.2.3
Utility-specific Efforts
Utilities define functional requirements for smart meters and DA infrastructure in one of three ways: through formal non-profit industry organizations, through ad hoc utility consortia, and through independent efforts: Industry organizations Utilities participate in key industry organizations and alliances to help guide standards development and drive their adoption by the vendor community. Examples of organizations with respect to the smart grid and smart metering include the Utility Communications Architecture (UCA) International Users Group (with its OpenSG, OpenAMI, and OpenHAN subgroups), the ZigBee Alliance, and the HomePlug Powerline Alliance. Typically, utilities are members of all three organizations.
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Utility consortia Utilities also seek to establish standards and specifications through work with other utilities to help drive vendor acceptance of technical requirements for smart grid systems. For example, most of the major utilities in the United Kingdom have been cooperating for several years, with the aid of consultants, to develop a set of common functional specifications for smart metering. Likewise, the Spanish utility Iberdrola has been leading an effort on the part of several major European utilities and vendor companies, called Powerline-Related Intelligent Metering Evolution (PRIME), to define an open-source power line standard for smart metering. Independent efforts Often, large utilities, such as SCE in the United States and EDF in France, simply dictate functional specifications that vendors must meet in order to win the utilities business. The utilities ensure that equipment and systems from multiple vendors will be able to interoperate. Vendors comply with these requests because of the large shipment volume opportunities.
3.3
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NISTIR 7628 Smart Grid Cyber Security Strategy and Requirements, which describes the bodys initial findings and strategy recommendations. The completed version of the document is expected to be published in March 2010 with final recommendations on smart grid security architecture and requirements. As with the overall NIST effort, ABI Research believes that the CSCTG recommendations and strategy will prove relevant to smart grid deployment efforts on a global basis. We should also note that in 2007, the private, non-profit North American Electric Reliability Council (NERC), a utility industry body, was granted authority by the US Federal Energy Regulatory Commission (FERC) and relevant Canadian authorities to regulate the reliability of its members bulk power transmission systems. As part of this authority, NERC has implemented mandatory, enforceable standards for Critical Infrastructure Protection (CIP) that aims to secure the electric transmission infrastructure from malicious attacks.
3.4
3.4.1
3.4.2
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There appears to be far less use of private telecom division WAN networks on the part of utilities outside of the United States. ABI Research attributes this to the deployment of smart metering from about the year 2000 onwards, when public cellular networks have been widely available, as opposed to the US, where utilities have been deploying their own WAN infrastructure since at least the early 1990s, (when public cellular networks were not widely available), to support earlier AMR deployments. It is important to note that public CDMA networks will play a role in smart metering in many countries in the Asia-Pacific region, such as South Korea, while Europe will remain almost exclusively GSM/GPRS, and, eventually, WCDMA, simply due to the deployment patterns of cellular infrastructure for voice/data services in these regions.
3.5
3.5.1
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Partly in response to these concerns, module maker Cinterion Wireless Modules introduced a UMTS-only WCDMA embedded module the EU3 utilizing the newly opened European 900 MHz UMTS band and targeted primarily at smart grid applications. The EU3 can fall back to EDGE connectivity in areas where UMTS connectivity is unavailable. While pricing for the EU3 has not been publicly disclosed, ABI Research believes that it will be much closer to current EDGE pricing than WCDMA modules that incorporate higher speed HSPA capabilities. HSPA requires greater processing functionality, more transmit/receive RF chains, and is targeted more specifically to the needs of cellular broadband modem applications. We should note that there is an important difference between CDMA and GSM cellular technologies with respect to the issue of network longevity. In CDMA2000 networks, CDMA 1xRTT (the 2G standard) remains the voice channel even when CDMA EV-DO (the 3G standard) is deployed; CDMA EV-DO is a data-only technology. Therefore, as long as CDMA-based MNOs do not shut down the underlying CDMA network (as for a complete shift to LTE, for example), there will always be network connectivity for 2G CDMA devices. In contrast, GSM/GPRS (the 2G standard) is a fundamentally different radio technology from WCDMA (the 3G standard). As noted in the example above, it is entirely possible that GSM-based MNOs could completely shut down GSM/GPRS networks to make more room for their WCDMA 3G deployments.
3.5.2
3.6
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traditional SCADA technologies. For example, the S&C Electric Company, a Chicago-based global provider of equipment and services to the electric power industry, offers the SpeedNet Radios for communication with T&D network elements. The SpeedNet Radios enable a private utility mesh network on unlicensed 900 MHz frequency bands. As part of the overall development of a smart grid, many in the electric power industry would like to integrate existing DA communications into a unified DA/AMI communication network, and extend the scope of functionality to more in-field equipment. It is likely that DA will become more tightly integrated into a unified smart grid infrastructure. However, there are certain T&D elements, particularly PMUs and switches, which require low latency. Utility operations personnel need virtually real-time access to these devices if they are to properly manage the T&D grid. As such, depending on the architectural and technological choices utilities make in their smart metering/AMI deployments, this infrastructure may not be suitable for real-time DA communications, necessitating a separate infrastructure. Given the variability in end-device DA equipment form factors, ABI Research believes it is unlikely that radio (or wired) communications modules will be integrated directly into DA equipment. Rather, utilities are more likely to deploy wireless router/modem equipment with serial (and other) interfaces that will then be connected via wireline to the T&D equipment.
3.7
3.7.1
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itself. ABI Research does not believe there is much traction for BPL at present, given current deployments. Power line technologies are sometimes referred to as Power Line Communications, (PLC) or Distribution Line Communications (DLC). Power line technologies have benefited tremendously from the 2001- 2006 ENEL deployment of 30 million smart meters in Italy, which has strongly influenced other smart metering installations in Europe and the Asia-Pacific region. The ENEL model that is being adopted by other utilities comprises power line technologies in the NAN, backhauled by GSM/GPRS cellular communications from the data concentrator. Echelon was a key participant in the ENEL project, working with the utility to create smart metering kits and the data concentrators used in the deployment, and from that experience created the NES solution that it has been selling through systems integrators to other European and Asia-Pacific utilities, such as Vattenfall AB in Sweden and CitiPower in Australia. Landis+Gyr is another key smart metering vendor selling a dual power line-GSM/GPRS system, and is finding traction in the Scandinavian countries. Power line technologies also benefit from the avoidance of interference and range challenges in the NAN, which can plague fixed RF-based systems. In addition, in many countries, meters are located inside buildings or residences, unlike the United States, where meters are located outdoors. Power line communications connect more easily into residences than fixed RF does. Power line communications do face two major challenges: power lines do not connect to gas or water meters, requiring fixed RF technology to be added to the deployment for utilities that provide those additional services. Second, power lines do not connect to smart thermostats, making the link to the HAN more problematic and essentially requiring fixed RF (typically ZigBee) to be added to enable HAN communications. Although power line communications have been utilized in North America at least since the late 1990s, within the United States, fixed RF predominates in the NAN. This is fundamentally a result of the early lead fixed RF gained as AMR moved from wireless transfer of meter data to handheld devices, then to mobile drive-by platforms, and finally to fixed RF systems. PLC has gained traction in North America in the past five years, and appears likely to continue its momentum over the forecast period. By 2015, we forecast that PLC will represent the NAN connectivity for roughly 20.6 million meters, while fixed RF will be used in roughly 33.2 million meters.
3.7.2
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Some vendors are attempting to take a more standards-based approach. The first efforts have involved utilizing 2.4 GHz IEEE 802.15.4-based communications. For example, Trilliant Networks uses an IEEE 802.15.4 physical layer in conjunction with a proprietary networking layer. NURI Telecom utilizes the ZigBee networking layer along with an IEEE 802.15.4 physical layer. In November 2009, Itron announced its participation in a preliminary standardization effort called IEEE 802.15.4g (TG4g) Smart Utility Network (SUN). TG4g seeks to refine the 802.15.4 standard for specific use in NAN utility networks. ABI Research believes this will have to include transmission in the 900 MHz communication band, to avoid the propagation challenges of 2.4 GHz in outdoor low power wireless mesh networks. An initial draft is set to be complete in January 2010 with a final standard by the end of 2010.
3.8
3.8.1
3.8.2
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HomePlug is currently working with the ZigBee Alliance to make the ZigBee Smart Energy 2.0 public application profile the application layer for the new HomePlug GP standard, which should be complete by 1Q 2010. HomePlug GP will be interoperable with HomePlug AV. A HomePlug AV 2.0 standard should also be complete in the 1Q 2010 time frame and offer three to four times the bandwidth performance as HomePlug AV.
3.8.3
3.8.4
6loWPAN
6loWPAN is a standard for framing IPv6 packets for transmission over an IEEE 802.15.4 IC physical layer. 6loWPAN has been standardized by the Internet Engineering Task Force (IETF) as RFC 4944. To date, 6loWPAN has been implemented as a WSN solution, mainly by technology vendors, such as Arch Rock, for general monitoring and control applications. It has not gained significant traction in specific verticals, such as home automation, or commercial building automation, to the same extent as have some of the other technologies listed in this report. However, some smart grid vendors, such as Trilliant, have implemented versions of 6loWPAN in their offerings. Work to make 6loWPAN more user friendly as a sensor networking standard is underway in the IETF Routing over Low Power and Lossy (ROLL) networks Working Group, which is looking at routing protocols that can be optimized for sensor networking. Likewise, the IP for Smart Objects (IPSO) Alliance has been formed as an industry organization to help promote the use of IP in general, and 6loWPAN specifically, for sensor networking applications.
3.8.5
Wireless M-Bus
Wireless M-Bus is the short-range wireless version of the European Meter-Bus standard. Wireless M-Bus is also denoted as EN 13757-4, while wired M-Bus is denoted as EN 13757-2 for the physical and data link layers and EN 13757-3 for the application layer. Wireless M-Bus appears to be in use solely in Europe, mostly to connect residential gas, water, and heat meters to smart electric meters for multi-meter AMR/AMI applications. Technically, Wireless M-Bus could be used to connect to other devices in the home, but ABI Research is not aware of this occurring to any large degree.
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EnOcean is an energy-harvesting wireless sensor networking technology meant for home and commercial building automation. The solution was created by a company called EnOcean that was founded in Germany in 2001 and is itself a spin-off of a Siemens AG R&D effort. The main benefit of energy harvesting is the elimination of batteries, which can be particularly helpful in large commercial building automations systems, where the management of several thousand batteries can be difficult. The EnOcean sensors and actuators work in a star topology and typically will utilize another automation technology such as LonWorks as a backbone transport layer in larger installations. Although EnOcean technology was developed by a single company, in October 2009 the EnOcean Alliance announced a public EnOcean standard (that closely conforms to the technology developed by EnOcean) controlled by the alliance. The EnOcean Company will supply several of the components to the market, as well as license IPR to other component makers. By 2012, the alliance expects the EnOcean solution to be an international IEC standard, as well.
3.8.7
LonWorks ISI
Echelon Corporations LonWorks technology operates over power line as well as copper twisted pair and coaxial cables and has been widely adopted in various automation and control markets, especially commercial building automation, transportation utility, and advanced smart. Echelon released its Interoperable Self-Installation (ISI) technology in August 2005 to make LonWorks more applicable to the DIY home automation market. ISI enables up to thirty-two LonWorks nodes to discover each other and form a simple network with little user intervention. The technology is designed to enable consumers to quickly and easily set up simple home automations systems without professional installation. In November 2006, Echelon established the Digital Home Alliance (DHA) as a marketing organization to promote ISI and LonWorks. DHA will not set technology direction for ISI; unlike the ZigBee Alliance or Z-Wave Alliance, it is purely a market-building organization. Echelon says that it is gaining traction with ISI in South Korea and Germany and is increasingly looking to leverage the companys complementary smart metering business activities and focus on energy management applications.
3.8.8
INSTEON
SmartLabs introduced its power line and low power, low data rate wireless INSTEON technology in 2005. The company built the INSTEON Alliance and generally followed the same approach to market development as Zensys, prior to the Zensys acquisition by Sigma Design, albeit getting an earlier start on multi-source silicon. However, at the end of 2007, the firm shifted strategic direction and is no longer working to develop an INSTEON market ecosystem. SmartLabs will continue to sell INSTEON-based lighting equipment of its own design through its SmartHome.com online store. The reasons for this change in strategy have not been made public, but ABI Research surmises that the company was not able to gain sufficient traction quickly enough, and was forced to make the decision based on financial factors. It is unclear if INSTEON has much if any future as a general-purpose home automation technology. Vendors, such as Exceptional Innovation, that were proponents of INSTEON, have made it clear that they are essentially agnostic to the underlying technology.
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KNX is a networking and application layer standard for home and commercial building automation. It is designed to be used in conjunction with various media, including RF, power line, twisted pair, and Ethernet (using the KNXnet/IP variant). Application-layer profiles have been created for lighting, blinds and shutters, security systems, energy management, HVAC systems, monitoring systems, remote control, metering, AV control, and white goods (appliances) control. KNX has been certified as an open, manufacturer-independent standard by a number of standardization bodies around the world, including: the ISO, IEC, CENELEC, CEN, SAC, ASHRAE, and ANSI. The KNX standard is administered by the KNX Association, an industry organization created in 1999 by the merging of three prior standards bodies. The association, which certifies devices and ensures interoperability, says that it has over 100 vendor companies and that KNX products are offered in more than seventy countries. The standard does seem to be mostly a European effort, however, as most of the member companies and the majority of activities appear to be in Europe. The name KNX rarely comes up in conversations with home automation or HAN vendors with whom ABI Research has spoken, even with respect to its activities in Europe. It may be that KNX has more traction in the European commercial building automation sector, rather than home automation or energy management.
3.9
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Section 4.
MARKET FORECASTS
4.1
Forecast Methodology
The overall methodology used for this study comprised both primary and secondary research. ABI Researchs primary research included: Interviews with meter vendors and AMI technology vendors to determine their views on the likely issues and trends impacting adoption of smart metering technology. In addition, we obtained feedback on our forecasts. Interviews with cellular embedded module vendors to determine their historical shipments, including shipments by region and application area (such as AMI), and to determine their views on the likely issues and trends impacting adoption of cellular and other wireless WAN technologies into AMI applications. Interviews with other members of the smart grid ecosystem to determine their views on the likely issues and trends impacting adoption of AMI and smart grid technology.
Additionally, we conducted secondary research utilizing government databases, reports and regulatory/legislative pronouncements, vendor product data sheets, white papers, press releases, trade journals, and industry organization presentation materials. Fundamentally, the forecasting process began with the initial development of a Total Available Market (TAM) forecast for meters that could be embedded with AMI communications. This was done through developing an estimate of the US meter installed base, found in government data and discussions with meter manufacturers, and then normalizing these estimates to apply to major regions of the world. This normalization process was accomplished through an algorithm that took into account population and GEP differences between different regions of the world in comparison to the United States. Next, we forecast likely penetration of AMI technology into the overall meter TAM. Heavy reliance during this phase of the model development was made on the data provided by the US Federal Energy Regulatory Commission (FERC) in its regular reports on the state of AMI deployment in the United States. In addition, this US-specific data was supplemented by published reports on AMI deployments in other regions of the world, as well as close consultation with meter manufacturers on their views on regional market development. Please note, ABI Research is projecting the penetration of AMI technology only into electricity meters, not into gas, water, or heat meters. Typically, non-electricity meters are networked via short-range wireless technologies to electricity smart meters as an adjunct to the electricity distribution grid, rather than as an independent smart meter network. Then, starting with historical shipment data of cellular embedded modules as a key factor, we projected the likely penetration of multiple communications technologies into the smart metering TAM. Close consultation with cellular embedded module vendors as well as cellular M2M MVNOs and MNOs engaged in smart metering activities informed this portion of the model. Additionally, cellular M2M industry participants were able to provide data on relevant ASPs and ARPU. The overall process was iterative, with various data points used to develop an increasingly calibrated forecast over the multiple iterations of the forecasting process.
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4.2
Chart 4.1
Total Meter and Smart Meter Installed Base, World Market, Forecast: 2008 to 2015
800 700 600 500 400 300 200 100 0 2008 2009 2010 2011 2012 2013 2014 2015 Electric Meters Gas Meters Water Meters Smart Meters (Electric)
Units (Millions)
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Chart 4.2 shows ABI Researchs forecast of smart meters by region. Further detail is provided in Tables 1-1, 1-2, 1-3, 1-4, 1-5, and 1-6 in the accompanying database file. Europe is currently the largest market for smart metering technology, and will remain so for the forecast period. However, other regions are expected to grow more strongly over the forecast period. Consequently, Europes overall share will decline by 2015. In particular, North America will start to see strong growth in the 2010 period and onward as key projects in several US states and Canadian provinces start hitting volume deployments. The Asia-Pacific region will see the highest growth rate over the forecast period, but this region is starting from a small base. Latin America and the Middle East and Africa are expected to remain marginal markets for smart metering throughout the forecast period.
Chart 4.2 Total Smart Meter Installed Base by Region, World Market, Forecast: 2008 to 2015
250
Units (Millions)
150
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4.3
Chart 4.3
Smart Meter NAN Communications Technology Installed Base by Type, World Market, Forecast: 2008 to 2015
250 Direct WAN 200 Fixed RF
Units (Millions)
150
Powerline
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4.4
Chart 4.4
Smart Meter WAN Communications Technology Installed Base by Type, World Market, Forecast: 2008 to 2015
50
Units (Millions)
30
20
10
4.5
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ABI Research expects GSM/GPRS connections to rise moderately over the forecast period as overall cellular smart meter connections increase, due to GSM/GPRS connectivity being widely utilized in Europe and the Asia-Pacific region. Increasingly, we anticipate EDGE connectivity will grow due to the greater spectral efficiency that EDGE affords, as well as declining EDGE embedded module pricing. WCDMA will likely represent only a small portion of connections over the forecast period. However, this may change as UMTS-only embedded modules are introduced (such as Cinterion Wireless Modules EU3 product, introduced in 4Q 2009) and a large enough base of potential customers becomes convinced that GSM/GPRS network infrastructure will be turned off during the time frame in which they wish to deploy GSM/GPRS smart meters in the field. CDMA connectivity will likewise remain a minority of connections over the forecast period, reflective of its use predominantly in North America, which is a more heterogeneous market for smart metering WAN connectivity. We anticipate that WiMAX and LTE will comprise only a small portion of AMI connections over the forecast period, due to module costs and coverage concerns. However, we should note that private WiMAX AMI networks are being deployed by some utilities in Australia and the United States.
Chart 4.5 Smart Meter Cellular Connections by Air Standard, World Market, Forecast: 2008 to 2015
50
40
WCDMA EDGE
30
GSM/GPRS
20
10
Chart 4.6 reflects ABI Researchs forecast of the revenue derived from connectivity services to the cumulative cellular connections used in conjunction with smart metering, segmented by cellular air interface standard. Further detail is provided in Tables 2-2, 2-6, 2-8, 2-10, 2-12, and 2-14 in the accompanying database file.
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The revenue trends noted above essentially conform to those discussed in relation to Chart 4.5. ARPU will vary somewhat from operator to operator, and we have heard that in some instances CDMA-based operators will offer particularly competitive pricing to compensate for higher CDMA embedded module costs. However, ABI Research believes that ARPU across standards is essentially in the $10 per-month range, and is likely to decrease only marginally over the forecast period. This ARPU figure is, of course, for concentrator-based cellular deployments the majority of the cellular AMI deployments in the market today. ABI Research believes that, in the minority of cases where cellular is embedded directly into the meter itself, ARPU is below $1 per meter.
Chart 4.6 Smart Meter Cellular Connection Revenue by Air Standard, World Market, Forecast: 2008 to 2015
$8,000 LTE $7,000 $6,000 WiMAX CDMA EV-DO CDMA 1xRTT $5,000 $4,000 $3,000 $2,000 $1,000 $0 2008 2009 2010 2011 2012 2013 2014 2015
(Source: ABI Research)
Revenue ($ Millions)
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Chart 4.7 provides ABI Researchs forecast of the number of cumulative cellular connections active during the forecast years in conjunction with smart metering, segmented by region. Further detail is provided in Tables 2-3, 2-5, 2-7, 2-9, 2-11, and 2-13 in the accompanying database file. Although the trends illustrated in Chart 4.7 largely conform to those detailed in Chart 4.2, there is a relatively higher proportion of cellular connections used in Europe and the Asia-Pacific region, in contrast to North America. The European (and, to date, Asia-Pacific) model for smart metering deployment has largely consisted of the use of cellular connectivity in the WAN. By contrast, the North American markets connectivity type is more heterogeneous.
Chart 4.7 Smart Meter Cellular Connections by Region, World Market, Forecast: 2008 to 2015
70 Middle East & Africa 60 Latin America 50 Asia-Pacific Europe North America 30
Units (Millions)
40
20
10
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Chart 4.8 illustrates ABI Researchs forecast of the revenue derived from connectivity services to the cumulative cellular connections used in conjunction with smart metering, segmented by region. Further detail is provided in Tables 2-4, 2-6, 2-8, 2-10, 2-12, and 2-14 in the accompanying database file. The revenue trends shown in Chart 4.8 conform to those in Chart 4.7.
Chart 4.8 Smart Meter Cellular Connection Revenue by Region, World Market, Forecast: 2008 to 2015
$8,000 $7,000 $6,000 Middle East & Africa Latin America Asia-Pacific Europe $5,000 $4,000 $3,000 $2,000 $1,000 $0 2008 2009 2010 2011 2012 2013 2014 2015 North America
Revenue ($ Millions)
4.6
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As noted above, we anticipate WiMAX and LTE to have only minimal impact on the AMI market over the forecast period.
Chart 4.9 Smart Meter Cellular Module Shipments by Air Standard, World Market, Forecast: 2008 to 2015
Units (Millions)
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Chart 4.10 provides ABI Researchs forecast of the revenue resulting from the shipment of cellular embedded modules, segmented by cellular air interface standard. Further detail is provided in Tables 3-2, 3-6, 3-8, 3-10, 3-12, and 3-14 in the accompanying database file. ABI Research expects revenue from GSM/GPRS modules to decline slightly over the forecast period, due both to ASP reductions as well as a weak overall rise in GSP/GPRS module shipments in favor of EDGE. WCDMA and CDMA EV-DO will see larger revenue increases in their unit shipment volumes, due to relatively higher ASPs with respect to GSM/GPRS and EDGE modules. This applies to WiMAX and LTE modules, as well. In total, revenue will increase throughout the forecast period as shipment volumes rise, more than compensating for the downward effect of declining ASPs. Chart 4.10 Smart Meter Cellular Module Revenue by Air Standard, World Market, Forecast: 2008 to 2015
$350 LTE $300 WiMAX CDMA EV-DO $250 CDMA 1xRTT WCDMA $200 EDGE GSM/GPRS $150
Revenue ($ Millions)
$100
$50
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Chart 4.11 illustrates ABI Researchs forecast of the number of cellular embedded modules shipped, segmented by region. Further detail is provided in Tables 3-1, 3-5, 3-7, 3-9, 3-11, and 3-13 in the accompanying database file. Please note that, in contrast to the cellular connections forecast presented earlier, the module shipment forecast is segmented regionally, based on the location of the headquarters of the OEM/manufacturer integrating the modules into a final device, not the region, necessarily, where the modules are deployed in the field for end use. Most clients find this approach to module segmentation more useful for their purposes. Chart 4.11 Smart Meter Cellular Module Shipments by Region, World Market, Forecast: 2008 to 2015
14 Middle East & Africa 12 Latin America Asia-Pacific 10 Europe
Units (Millions)
North America
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Chart 4.12 provides ABI Researchs forecast of the revenue resulting from the shipment of cellular embedded modules during each year of the forecast, segmented by region. Further detail is provided in Tables 3-2, 3-6, 3-8, 3-10, 3-12, and 3-14 in the accompanying database file. The revenue trends shown in Chart 4.12 conform to those in Chart 4.11. Chart 4.12 Smart Meter Cellular Module Revenue by Region, World Market, Forecast: 2008 to 2015
$350 Middle East & Africa $300 Latin America Asia-Pacific $250
Revenue ($ Millions)
$200
$150
$100
$50
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Section 5.
SELECT INDUSTRY PLAYERS
5.1
5.1.1
5.1.2
Echelon Corporation
Echelon Corporation (San Jose, California) is a leading communications technology vendor. Its LonWorks communications protocol has been certified by a variety of standards bodies around the world for building, industrial, and transportation systems communication, including in the United States, Europe, and China. While Echelons technology features more prominently in building and industrial automation systems, the company has been involved in the utility market for a decade. It was the work with ENEL, providing the communications component of that utilitys custom AMI implementation that convinced Echelon to develop the Networked Energy Services (NES) solution as a turnkey AMI platform for other utilities that might not have the scale to develop their own customized systems. Echelon has gained a lot of early traction in Europe, but is seeking to expand on a worldwide basis and has announced customer wins in Australia. Unlike many other technology vendors, Echelon chose to actually develop its own meter for the tightest integration, rather than to provide an adapter or retrofit kit. The company sells through systems integrators and VARs. The NES system comprises the EM-1021 and EM-1023 electricity meters, the DC-1000/SL data concentrator, and NES system software. Meters link to the concentrator through a PLC connection. Unlike the EIS solution, the data concentrators are not meters themselves, but are only used to aggregate multiple meters for single-link WAN connections over TCP/IP networks to the NES system software, which resides at the utilitys operations center. The concentrator is placed adjacent to the local neighborhood distribution transformer. Echelon does not denote a specific WAN link, but states that GPRS is the most common WAN communications technology for AMI in Europe.
5.1.3
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company introduced its EkaNet system for utility smart metering/smart grid applications. Eka Systems first deployed its solution in Russia in 2004 and has also seen deployments in Singapore, Ecuador, and increasingly in the United States. The company has gained particular traction with municipal utilities, but is now starting to see interest from larger Investor-Owned Utilities (IOUs) as well. The company currently has about seventy-five employees. The EkaNet system comprises nodes, relays (where needed), and gateways. The system has been developed to be self-forming and largely self-managing and highly scalable. The nodes work transparently with a variety of different meters from different vendors. The back-end management interface is not a full Meter Data Management (MDM) system, but provides many of the same features and functionality and is designed to serve as a basic MDM for smaller utilities that are not going to deploy a full MDM. The system can interface with a variety of MDM systems and is built to utilize open standards as much as possible.
5.1.4
5.1.5
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GE Energy (Fairfield, Connecticut) has been in the metering business for 129 years. The company is active in all ANSI-standard countries and two years ago introduced an IEC meter. GE has been active in smart metering since 2003. However, unlike some other meter vendors, GE has opted to utilize third-party communication technologies to enable smart meter capability. Currently, the company works with AMI vendors such as Trilliant, Silver Spring, SmartSynch, and Aclara. Note that SmartSynch has its own metering technology and GE is also utilizing the smart metering technology of Landis+Gyr. GE typically works directly with utility customers, although sometimes it will sell to smaller municipal utilities through distributors. Either GE will coordinate the smart metering deployment for a utility, or the utility handles the coordination of the project itself.
5.1.7
Grid Net
Grid Net (San Francisco, California) is a privately held smart grid software developer founded in 2006 with funding from Intel Capital and GE and has under fifty employees. Grid Net offers a Network Management System (NMS) for the smart grid for both smart metering and DA applications. Grid Net calls its software platform PolicyNet. However, in the near term, the company is also providing its GE partner with hardware reference designs for a communication board for a WiMAX-based smart meter. GE also provides this communication board to Landis+Gyr, in addition to utilizing it in its own line of smart meters. The company also provides a WiMAX-based router box design that can be used to connect to a variety of DA equipment. Grid Net does not sell directly to utilities; rather it sells through its partners, such as GE. A key recent customer win for Grid Net/GE is the Australian utility SP AusNet, which announced in November 2009 a deployment of WiMAX-based smart meters in its service area in the state of Victoria.
5.1.8
GridPoint
GridPoint (Arlington, Virginia) is a privately held smart grid technology provider funded by Altira Group, Goldman Sachs, and New Enterprise Associates, among others. The company was founded in 2003 with the goal of helping to fuel the mass adoption of renewable energy and DR as a source of electricity. GridPoint currently has about 130 employees and $220 million in venture capital funding. The company has one of the more sophisticated offerings in the market, and has been selected as part of Xcel Energys SmartGridCity deployment in Boulder, Colorado. The company is focused on enabling utilities to enhance their dealings with customers allowing them to access a range of applications, such as DR management and load control, PHEV management, and renewable energy integration. At the heart of its offering is the GridPoint Platform, an enterprise-class, Java-based software program that enables utilities to provide a range of energy management applications and integrate a variety of third-party energy management-related end devices. In June 2009, GridPoint acquired Lixar, a home energy management software provider based in Ottawa, Canada. The Lixar acquisition brings to GridPoint an extensible, sophisticated, widgetbased consumer platform to enable utilities to better engage with their customers. Each utility will brand the platform according to its own needs, and, with integration with the GridPoint Platform back-end software, can extend its capabilities easily over time.
5.1.9
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traditional electromechanical meters, as well as solid-state electricity meters, gas, water, and heat meters, and claims to be one of the largest meter vendors in China, with 3,800 employees. HML produces a power line-based smart meter, and has developed ZigBee technology for use in HANs.
5.1.10
Itron Inc
Itron Inc (Liberty Lake, Washington) is a publicly listed US meter vendor that operates under the Itron name in North America and under the Actaris name elsewhere. The company is a leading vendor of electric, gas, and water meters, in addition to related products and services, such as meter data management software, energy forecasting and load research, and professional services. Itron was founded in 1977 and now has offices in eighty countries, with revenue said to be around $1.4 billion in 2007. The company has developed its own in-house smart metering technology, based on a fixed RF LAN architecture that it integrates into its Centron, Sentinel, and Quantum meters. In addition, the company integrates other smart metering vendors technology under glass into its meters.
5.1.11
Landis+Gyr
Landis+Gyr (Zug, Switzerland) is a global meter manufacturer with roughly a century of experience. In 1998, the company became a part of Siemens AG as Siemens Metering and was sold to the Bayard Group, an Australian private equity firm, in 2004. Bayard also acquired a number of other metering companies around the globe, including Enermet, Cellnet+Hunt, AMPY Email Metering, and StatsSignal. In May 2008, Bayard chose Landis+Gyr as the overall operating brand for the group and is in the process of integrating the products and operations of the constituent companies. Landis+Gyr is currently a private firm The company has approximately 5,000 employees and is active in thirty countries around the globe. The firm offers meters and smart meters to its utility customers and is also active in turnkey meter deployment and management services, as well as consumer energy management devices, with its EcoMeter line of products.
5.1.12
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Maestros off-the-shelf modem lines include the 100 Series, Industrial Series, and Heritage Series. These products are differentiated by specific features and functionality, with some functioning as modems/terminals and others serving as gateway/router devices. Strategically, the company is seeking to offer increasingly more specialized terminal devices, focused on the vertical market applications areas of: Health, Vehicle Remote Management, Automated Meter Reading, Monitoring and Control, Sales and Payment, and Home and Security.
5.1.13
5.1.14
SmartSynch
SmartSynch (Jackson, Mississippi) is a privately held company founded in 1999 as XP Technology Inc in Calgary, Alberta, Canada. Its customer base is primarily in the United States and Canada. The company focuses on smart metering technology for electrical utilities, mainly utilizing public networks, such as ReFLEX, and GRPS in direct, one-tier architectures. SmartSynch announced a Wi-Fi-enabled product deployment with Burbank Water & Power in October 2007 for a predominately C+I smart metering network in Burbank, California. The companys SmartMeter System comprises modules that are embedded under glass with meter vendors such as Itron, Elster, and GE, and the Transaction Management System (TMS) at the utilitys head-end.
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Telenor Cinclus (Fornebu, Norway) is a division of Nordic MNO Telenor, focused on managed services for utility smart metering deployments. The division was set up in 2003 to address the rapidly increasing Nordic smart metering market. It has approximately 190 employees. The company is most active in Sweden, Norway, and Denmark, although it also has activities in several other European countries including Hungary where its parent company, Telenor, has a presence. The firm also has a relationship with the Netherlands MNO KPN. Telenor Cinclus essentially manages utilities smart metering operations out of a network operations center in Lillehammer, Norway. The center collects meter data from assets in the field and transmits this data to the utilities back-end systems. The company is focused on open systems and can connect to a variety of third-party smart meters, either through its own communications modules or through third-party communications modules.
5.1.16
Trilliant Networks
Trilliant Networks (Redwood City, California) is a privately held smart metering technology vendor founded in the 1980s. The company recently merged with OZZ Corporation, a Canadian provider of metering and energy management services for North American utilities. Trilliant focuses on the North American market and is said to have approximately 100 utility customers, including many involved in the Ontario smart metering deployments. Roughly 3 million smart meters have been deployed. The company provides smart metering technology and MDM software as well as meter development tools and middleware. Trilliants smart metering solution comprises a fixed RF mesh network topology utilizing IEEE 802.15.4 ICs and a proprietary adaptation of 6loWPAN. In addition, the company supports a range of WAN connectivity types, including GSM/GPRS and CDMA, and has introduced a ZigBee-based HAN portal, called the Trilliant Energy Management System for Consumers, as well as the Trilliant Energy Valet, an iPhone app.
5.2
5.2.1
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telematics applications. AerCommand is a broadcast paging capability over the CDMA network targeted at utility applications needing low data rates at a low cost for a large number of end devices. Aeris is able to offer these services because it maintains its own network elements, rather than relying exclusively on its MNO partners.
5.2.2
AT&T Corporation
AT&T Corporation (Dallas, Texas) is the second largest MNO in the United States by number of subscribers. The company has been active in the M2M market for a number of years, but has been largely quiet about its efforts until recently. AT&T has not referred to its telematics and telemetry activities as M2M, although this may change in the future. The company has a fairly large staff working on M2M activities, although these are generally cross-functional employees who are not focused exclusively on the M2M market opportunity. For example, the same employees and business units that take fleet management or POS connection services to market also work on such Business-to-Business (B2B) service offerings as package delivery notification. The M2M business activities form part of AT&Ts Global Business Services division (that typically sells to large and medium-sized enterprises) with most subscriber metrics reported under AT&Ts unbranded services, which has the effect of keeping relatively low M2M ARPU subscribers separated from more traditional wireless service. AT&T has aggressively staked out a position in certifying specialized vertical devices, with over 200 devices certified to date. The company essentially has three go-to-market models. In a co-selling arrangement, AT&T and a partner engage in joint sales and market activities and customer support. AT&T bills for wireless services and the partner bills for the application and professional services. In a VAR arrangement, the partner resells AT&T Mobility data services, although in some cases, the customer has an existing agreement with AT&T for other services and the customer may prefer to source wireless connectivity directly from AT&T in a manner similar to the co-selling arrangement. Both co-selling and VARs are handled through AT&Ts Business Alliance program. AT&T also sells M2M connectivity directly to end customers along with applications that it sources from ASP partners. The company has a large direct sales force active in this area on a crossfunctional basis. In this third model, AT&T essentially sells end-to-end managed services to customers, consisting of third-party (ASP partner) software and devices along with AT&T wireless connectivity. AT&T bills the customer for the software, devices, and services. The ASP partner is compensated in various ways, which could entail licensing fees or revenue sharing. An integral part of AT&Ts M2M strategy is its self-service Enterprise on Demand (EoD) portal for customers. The portal was developed internally at AT&T more than ten years ago as a web services platform that can be accessed either through a web portal or tied directly into customers enterprise management and database software. The company says that the portal enables the customer to interact with AT&T in an efficient manner. For example, the customer may buy additional SIMs or manage many service attributes directly, related to provisioning and billing. With its tight IT-network integration, and available web services integration, AT&T says that EoD enables operational efficiency and low management costs for all parties, which is critical for serving the low ARPU M2M market. As a complement to the EoD portal, AT&T and Jasper Wireless announced a partnership in May 2009, in which the Jasper Wireless service platform will be made available as an option to AT&T customers. AT&T is focused on a number of application verticals, many with M2M components. It has traditionally been most involved in fleet management, with OEM telematics, alarm monitoring, and POS also as key segments. (The company now has BMW as a client in terms of OEM telematics.) New segments include Healthcare, Industrial Monitoring, and Utilities. AT&T recently announced a co-sell agreement with Itron, a key utility meter vendor and smart metering services application provider.
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CrossBridge Solutions (Lincolnshire, Illinois) is a privately held MVNO founded in 1993. The company was originally created as the ARDIS DataTAC network, in collaboration with Motorola and IBM, to enable connectivity for IBM field service technicians. The company later changed its name to Motient and became CrossBridge Solutions after its 2006 acquisition by GeoLogic Solutions. GeoLogic Solutions was a leading provider of 18 wheeler for hire fleet management solutions and had been Motients major customer. In 2004, Motient announced that it was shutting down its DataTAC network and negotiated master reseller deals with Sprint and the original AT&T Wireless to become an M2M-focused MVNO. GeoLogic decided to gain more control over this transition by purchasing the remaining DataTAC towers, and the iMotient MVNO portion of Motient, subsequently changed the name of this entity to CrossBridge Solutions. In January 2008, in a consolidation in the fleet management industry, XATA Corporation, a leading provider of private fleet management solutions to companies such as Safeway Foods and SYSCO Foods acquired GeoLogic Solutions. CrossBridge Solutions is currently a master reseller of the Sprint, AT&T Mobility, and Orbcomm (satellite service) networks. The company is run as a separate division within XATA Corporation. In addition to its direct focus on remote monitoring, asset tracking, AVL, and medical applications, it provides network connectivity for XATA Corporations acquired public fleet management solutions (the former GeoLogic Solutions business). However, XATA Corporations original private fleet management solutions business has a separate connectivity deal negotiated directly with Sprint. CrossBridge Solutions focuses on the US market, though its devices are able to roam onto networks in Canada and Mexico.
5.2.4
Jasper Wireless
Jasper Wireless (Sunnyvale, California) is a privately held MMO founded in 2004 with venture capital from Sequoia and Benchmark. Jasper Wireless is currently active in more than sixty countries and is expanding at a rate of five countries per quarter. The company focuses on traditional M2M applications, such as vehicle telematics as well as adjacent markets including navigation and embedded CE devices. Jasper Wireless has significantly changed its strategy over the course of 2008 and 2009. Originally, the company offered connectivity services directly to application provider customers and focused on differentiating its offering through a global SIM that supplied roaming connectivity at local rates as well as the sophistication of its service delivery platform, in providing such functionality as flexible rate shaping. Now, the company focuses on offering its platform as a turnkey service to MNO partners that want to enter the M2M market quickly without a great deal of internal development work. With this offering, Jasper Wireless provides technology, marketing, and subject matter expertise to its MNO partners. Currently, the company has announced partnerships with KPN in Europe and AT&T in the United States.
5.2.5
KORE Telematics
KORE Telematics (Reston, Virginia) is a privately held MVNO serving the North American GSM/GPRS (including SMS, EDGE, and HSPA) and CDMA markets with what it says is reliable, fully digital, standards-based wireless connectivity for data, video, and voice. KORE works with AT&T Mobility and Verizon Wireless in the United States and Rogers Communications in Canada, and has a global reach in over 200 countries. The company is currently serving more than 550 ASPs, and targets the key M2M segments of telematics, security, asset tracking, EPOS, vending, and AMI, with special expertise developed in the vertical markets of government, security, and utilities (with more vertical market specialization areas to come).
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Although the companys core area of operations is in North America, KORE Telematics does have multinational customers operating worldwide. The company is a founding member of the m2mGlobal Alliance, which was launched in 2008 to offer global coverage, with local support, for multinational M2M applications. The alliance focuses on offering native (Tier One) connectivity in major markets including North America, Europe (including the United Kingdom), and Australasia. Roaming connectivity is provided in secondary markets, from the Tier One base, for access to all regional operators, and to ensure secure, long-term roaming capabilities when not in native connectivity mode. The company offers a web-based self-management gateway platform to its partners called PRISM, and has implemented redundant network service centers in the United States and Canada for what it says is highly reliable service delivery. KORE Telematics is the only M2M provider that is a voting member of the PCS Type Certification Review Board (PTCRB) and is working to influence and educate this important mobile device certification body on the specific needs of M2M device certification. In addition, the company is able to self-certify devices on Rogers network in Canada. KORE Telematics has introduced a number of innovative service offerings including low cost tariff models for exception-based applications where the tariff is spread across the data used by all of a customers remote devices as well as an ultra high use 3G offering for services such as video surveillance.
5.2.6
Mach Communications
Mach Communications (Kensington, Australia) is a specialist M2M connectivity service provider. The privately held company was founded in 2003 and launched into continuous service in 2006. The company provides services over the Vodafone Australia network, other networks in Australia, New Zealand, Asia, and the Orbcomm M2M satellite network and contends that it is the largest non-MNO M2M service provider in Australia. The company's key M2M application focus areas to date have been the health sector, utilities, asset tracking and courier dispatch, and security and asset monitoring. The Mach Communications strategy is tied to its founding membership in the m2mGlobal Alliance along with partners KORE Telematics and several other firms across the globe. The alliance enables its members to offer global services at local rates and with localized customer care.
5.2.7
NTT DoCoMo
NTT DoCoMo (Tokyo, Japan) is the Japanese incumbent mobile operator. It is directly involved in the Japanese M2M market and is active in certain international M2M markets through its investment in the MVNO Telargo. NTT DoCoMo entered the M2M market to expand beyond cellphone service, which is reaching saturation in Japan. Although the companys efforts span the organization, a dedicated M2M team resides in the corporate marketing division. The company offers direct M2M services to its customers in the areas of AMI, EPOS, vending, fleet management, remote monitoring, pet and personal tracking, and remote content delivery. NTT DoCoMo offers services over both its 3G FOMA (WCDMA) network and its 2G DoPa (PDC-P) network. The company supplies customers with its own modules that it calls ubiquitous and terminal equipment. The company provides integration and deployment support as well as aftersale service and support, in addition to its connectivity business.
5.2.8
Numerex Corporation
Numerex Corporation (Atlanta, Georgia) is a leading US-based communications provider for cellular M2M services, with about 140 employees. Like KORE Telematics and Wyless, Numerex resells radio network access from mobile operators to ASPs. However, the company is in the process of deploying its own network elements, making it an MMO, as opposed to an MVNO. Numerex has reorganized into three divisions: Networx, which offers GSM/GPRS, CDMA 1xRTT, and satellite connectivity; Techworx, which provides modules and modems along with other M2M
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components and equipment; and Flexworx, which provides consulting and support services as well as application-specific M2M service offerings, such as its Security Solutions Division (branded as Uplink), Satellite Solutions Division (branded as Orbit One), Asset Management Solutions (branded as FastTrack), and Mobile Solutions (for vehicle tracking). Numerex focuses on the North American market, although its satellite coverage is global. Unlike other MMOs and MVNOs, Numerex has directly entered some application markets. This is the case with the security vertical, where Numerex participates in the market with its Uplink solution. Uplink offers full-featured security including modem equipment and back-office support targeted mainly at independent security dealers who are served through a network of Uplink distributors. Uplink competes against Telular, Alarm.com, and Honeywells AlarmNet, although, in a sense, it also competes with Aeris, Jasper Wireless, and KORE Telematics when those companies pair up with security application providers.
5.2.9
5.2.10
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traditional data services. M2M can also give Rogers entry into new accounts for additional telecommunications services. In November 2009, Rogers announced a partnership with Jasper Wireless to use Jaspers platform to enable connected CE and M2M device come to market. Rogers is increasingly seeing the need to front its application provider partners with branding and support to reassure the end customers. Essentially, Rogers will work with two or three partners that it recommends in a given application area, providing network connectivity and marketing, while the application provider partner supplies the hardware, application software, and expertise to enable the application. Rogers is currently doing this with fleet management, under the mFleet brand, and may extend this strategy to telemetry applications. A crucial element is to develop a replicable turnkey solution with its partners to benefit multiple end customers by controlling their costs. In addition, the company currently works with a small number of MVNOs, but notes that the MVNO/master reseller model has not really gained traction in Canada, primarily since nationwide connectivity directly from the MNOs is already available.
5.2.11
Sprint
Sprint (Overland Park, Kansas) is one of the few MNOs to announce WiMAX as its 4G strategy, but believes 4G will be well-positioned to service the M2M market, with up to ten times the spectral efficiency of CDMA EV-DO. In 2008, Sprint transferred its WiMAX network infrastructure to Clearwire, in which Sprint is a major shareholder, along with Intel and others. Sprint WiMAX customers including those using M2M will be served through the Clearwire network. In July 2009, Sprint announced an outsourcing contract with Ericsson in which the latter company will assume day-to-day operation of the Sprint CDMA and iDEN networks. This deal is not expected to impact the M2M business in any material way. It should be noted that Sprint does not set aside specific hardware network elements to service its M2M traffic; all M2M traffic runs over and through the core voice/data network infrastructure. In October 2009, Sprint announced its new Emerging Solutions business unit. The company serves the M2M market through four separate channel strategies: open, wholesale, indirect, and direct. In the open approach, Sprint will quickly certify a device to the network, with no further partnering with the device or application vendor. In the wholesale model, MVNOs and larger corporate clients (application developers) partner with Sprint to offer their own branded services in which Sprint is completely transparent to the end customer; all marketing, sales, service, and support are derived from the partner, with only the underlying network connectivity provided by Sprint. In the indirect model, a reseller/application provider resells Sprints data services to its customers, activates services on behalf of the customers, and monthly bills come from Sprint. In the direct model, Sprints sales force co-sells and co-markets services in conjunction with partners, and searches for opportunities for those partners. Sprint bills customers directly for services, while the partner bills for hardware, software, and any related consultative support. The direct model is the highest priced option, because the Sprint sales force receives commissions for actively bringing in new business. Sprint identifies and works with specific partners for particular vertical market opportunities. Currently, more than 50% of the companys M2M sales are generated by direct sales.
5.2.12
Swisscom
Swisscom (Bern, Switzerland) is the incumbent fixed-line and MNO in Switzerland. The company provides mobile service to approximately 4,300,000 out of a total of 6,500,000 Swiss mobile subscribers. Primarily active in the Swiss market, the firm has some ancillary businesses in Italy (via its acquisition of broadband services provider FastWeb) as well as Southeast and Eastern Europe and the United States.
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Swisscom had a fairly conservative approach to M2M until late 2007; prior to this time, the company mainly confined its M2M business to selling SIM cards with special data rate pricing plans. However, in 2007, the company decided to enter the market more aggressively and now has a dedicated M2M organization within the corporate B2B unit that has a mandate to build an M2M service to provide customers with more value than a simple data pricing plan. The companys main areas of focus are transport (trucking), utilities, and vending machines. (A separate group within Swisscom provides cellular connectivity for POS terminals.) The company believes it can create a profitable business in data management and data hosting of customers globally distributed M2M devices.
5.2.13
Telefonica O2
Telefonica (Madrid, Spain) is a leading international fixed-line and mobile operator, active in Spain and twenty-four other countries in Europe, Latin America, Asia, and Africa under the Telefonica, movistar and O2 brands. The company is organized into three main groups to address each of these areas: Telefonica Espana, Telefonica Europe, and Telefonica Latinoamerica. The firms M2M activities are centered within the Telefonica Espana organization, although Telefonica Europe is involved in automotive and fleet management services in the Czech Republic and Slovakia. It is important to note that Telefonica has employees dedicated to M2M marketing and sales in all of its operational regions, not just in Spain. The company is primarily active in security alarms, AMI, EPOS, elevators, and e-Health, among other areas. Telefonicas M2M offering is marketed under the Mundo Maquina (Machine World) brand. The company is one of the most directly involved MNOs in the M2M market. Telefonica provides a turnkey one-stop shop solution designed to provide customers with everything from the module/modem and a global SIM to the application. Customers connect to the Mundo Maquina service either directly through Access Point Name (APN) gateways in an offering called Easy M2M or indirectly through a web services interface to a Telefonica Smart M2M platform server, in an offering called Smart M2M. The company enables M2M connectivity through either fixed-line or wireless connections and supports multiple wireless technologies, in addition to cellular including ZigBee, Wi-Fi, satellite, and Near Field Communication (NFC). The company has also simplified its tariffs for M2M, bundling connectivity and applications into a single fee based on usage. These profiles and rates include M2M Basic, M2M Medium, M2M Plus, and M2M Night. In addition, the company offers M2M-dedicated test laboratories and a Global Center of Excellence Program for partners.
5.2.14
Telenor Group
Telenor Group (Oslo, Norway) is a mobile operator active in thirteen countries in Europe and the Asia-Pacific region. The company entered the M2M market in 2000 with its Telenor Sweden business unit acting as the telematics and M2M competence center for the Group. However, most of the market growth has been since 2006. At first, Telenor Sweden sought to offer customers a great deal of vertical specialization, but more recently, changed its focus to a more horizontal strategy, targeted on optimizing the underlying communications networks for M2M. The key aspects include a single global embeddable SIM card optimized for M2M; automated provisioning with charges starting when the SIM cards are actually used in-field; service-level agreements; the Telenor M2M Platform as a management console; a dedicated M2M testing facility; and around-the-clock support service. Telenors M2M efforts have undergone a more radical strategic shift since October 2008, when Telenor Connexion, a wholly owned subsidiary, was established to pursue large-scale multinational M2M opportunities as well as to serve as the Groups new M2M competence center. Most Telenor Sweden M2M employees have been transferred to the Telenor Connexion.
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Individual Telenor business units will continue to pursue their own localized M2M deals with the assistance of Telenor Connexion technical support. Telenor Connexion will have its own dedicated network elements for M2M connectivity. The companys key M2M market segments are smart metering, security, automotive telematics, and remote monitoring. Telenor is starting to see strong growth in fleet management and asset tracking. In addition, the Group has a majority interest, along with Norwegian power grid company, Skagerak Energi, in Telenor Cinclus, a smart metering ASP that offers turnkey AMI data management for utilities and utilizes the Telenor network. In June 2009, the Group established Telenor Objects as a wholly owned subsidiary to focus on developing an application middleware platform above the communication layer to facilitate M2M application management across cellular as well as other types of network infrastructure, such as RFID.
5.2.15
TELUS
TELUS (Vancouver, British Columbia, Canada) is the incumbent telecommunications service provider in Western Canada, formed in 1999 by the merger of two telcos. The company has a roaming agreement with fellow CDMA operator Bell Canadas wireless infrastructure, and provides services across Canada and internationally, competing most directly against Bell Canada and Rogers Communications. TELUS has approximately 35,000 employees and 5,600,000 wireless subscribers. The company has decided to deploy an HSPA network in advance of a planned upgrade to LTE as its 4G technology choice. TELUS has publicly stated that it will maintain its existing CDMA network infrastructure at least through 2013. TELUS plans to use the HSPA network extensively for M2M and embedded CE device connectivity. TELUS has launched an M2M initiative, under the direction of a newly appointed National Program Manager Wireless M2M. Although the company had limited M2M activities prior to the launch, these were specific custom engagements with enterprise customers, focused on the oil and gas sector in Alberta, Canada, as opposed to ongoing programs. Under the wireless M2M program, TELUS is utilizing two channel strategies. In the first, the company works with dedicated ASP partners to bring applications to market. This is similar to the approach of many other telcos. In the second, TELUS wants to work with large end customers (typically utilities for AMI applications) to directly provide connectivity. TELUS does not have current agreements to supply connectivity to MVNOs directly, but it is exploring this option; it does have roaming agreements with some M2M-focused service providers.
5.2.16
Verizon Wireless
Verizon Wireless (Basking Ridge, New Jersey) is the largest MNO in the United States and is a JV between US-based wireline carrier Verizon Communications and Vodafone. Verizon Wireless has been involved in the M2M market for over a decade, providing the cellular networking enabling the GM OnStar consumer telematics service. However, for most of this time, the company has tended to have a relatively arms-length approach to the market serving as a wholesale connectivity provider to third-party aggregators, such as MVNOs and master VARs, or else directly serving only the largest corporate customers, such as GM. Starting in 2007, Verizon Wireless made two significant moves to enter the M2M market more directly and comprehensively. First, the company announced its Open Development Initiative (ODI), which enables device developers to rapidly certify their products on the Verizon Wireless network, shortening what would normally be a twelve-to-eighteen-month process down to four weeks or less. While the ODI program is open to all device developers, many of the initial devices certified through the program have been intended for M2M applications. Additionally, ODI introduces several new business relationship models for Verizon Wireless to work with partners.
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In a retail model, the partner markets and distributes a product and Verizon Wireless activates services and develops a billing relationship with the partners customer, in addition to assisting with network customer support. In a wholesale model, the partner certifies the device, either through Verizon Wireless directly or through a third-party certification house, buys wholesale connectivity from Verizon Wireless, and develops its own distribution, activation, billing, and support relationship with the customer, with some network support assistance from Verizon Wireless. Essentially, the retail model enables the partner to make a margin on the device itself, while the wholesale model enables the partner to also become part of the service value chain, making a margin on the connectivity. ODI enables a custom option for additional flexibility in developing a business model as well. In July 2009, Verizon Wireless and Qualcomm announced a fifty-fifty joint venture to transform the Qualcomm Enterprise Services (QES) into a separate M2M platform and professional services company. The JV (still unnamed as of this writing) will not be tied to either Qualcomm devices or Verizon Wireless connectivity, but will be free to pursue other partnerships. The JV has its heritage in the acquisition of nPhase by Qualcomm in 2006. nPhase developed a robust platform for provisioning and managing devices on cellular and wired networks, as well as a professional services capability to help partners bring applications to market. The nPhase/QES unit worked both as an MVNO and Mobile Virtual Network Enabler (MVNE) in regards to network connectivity. For example, it provided connectivity directly to CardioNet for that companys cardiac monitoring solution. With Amazons Kindle product, nPhase/QES provided network enablement services, while Amazon contracted directly with Sprint for connectivity. Since the acquisition by Qualcomm, the nPhase/QES business unit has integrated network elements, such as Home Location Registers (HLR) and Smart Mixed-Signal Connectivity (SMSC), directly into its infrastructure. In its relationship with Verizon Wireless and other MNO partners, the JV will essentially act as an enablement platform and professional services unit.
5.2.17
T-Mobile USA
T-Mobile USA (Bellevue, Washington) is the US operating entity of T-Mobile International AG & Co, the mobile communications subsidiary of Deutsche Telekom AG & Co. Deutsche Telekom is the incumbent German carrier and one of the largest global telecommunications companies, claiming 80 million customers worldwide. T-Mobile USAs M2M activities were formerly conducted by its VAR Group, whose principal focus was M2M, but these activities are now managed by a dedicated T-Mobile M2M group within the firm (T M2M). The head of T M2M is in close contact with counterparts at five or six other T-Mobile country-level M2M organizations, but each is independent and charting its own market strategy. T M2M is focused on gaining rapid traction in the M2M market and becoming the easiest MNO to work with for M2M application providers. T-Mobile is actively striving to create standards for M2M and has developed its own embedded SIM that it is proposing for ETSI standards consideration. The company is also working with other MNOs to create better M2M roaming rates. The company has traditionally worked through MVNOs and master resellers, such as RACO Wireless. However, with the change to the T M2M organizational structure, T-Mobile USA is now also serving M2M ASPs directly. The three areas the company sees as most promising are telematics, asset monitoring, and home security.
5.2.18
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operations active for several years, and now is offering global M2M services through the companys Global Enterprises division, which oversees the firms relationships with multinational corporations and customers with large scale opportunities. Vodafone has set aside dedicated network elements for the M2M business and created a global M2M service platform. The company is seeing significant opportunity in smart metering, telematics, and product-to-service offerings by large OEMs, although the company is also active in a range of other M2M application areas. However, Vodafone focuses on the network connectivity aspect including professional services to aid the customer in planning and launching services, rather than on the applications directly.
5.2.19
Wyless PLC
Wyless PLC (Uxbridge, United Kingdom) is a privately held M2M alternative connectivity service provider that bills itself as an M2M Global Network Enabler. The company was founded in 2003 and currently has about forty employees. Wyless maintains offices in the United States, Sweden, Spain, Israel, and Pakistan in addition to its UK headquarters. In 2Q 2009, the company announced its eighth consecutive quarter-on-quarter revenue growth. Wyless core focus is providing a connectivity management platform and professional services on top of globally available connectivity for its M2M ASP and end-customer clients. The company works in partnership with the T-Mobile Group and the Telefonica/O2 Group to provide cellular connectivity and value-added services to over 500 customers in more than 120 countries. The company connects to its carrier partners networks through APN gateways, while maintaining its own RADIUS servers. In addition to GSM/GPRS connectivity, the company also enables fixedline and satellite connectivity. Customers access the Wyless network through the Porthos portal, a web services portal that can be accessed as a web site or integrated into the customers own back-end reporting systems. Wyless offers both a global roaming SIM as well as fixed SIMs at local rates. The company is looking into offering embedded SIMs. The firms key end application services include fleet management, remote monitoring, ATM/POS, retail worker mobility using PDAs, and digital road signage, among others. The company is examining the possibility of offering its software as a service to MNOs.
5.3
5.3.1
Module Vendors
AnyDATA
AnyDATA (Irvine, California) is a privately held embedded cellular module and device vendor with offices in the Asia-Pacific region and Latin America and approximately 350 employees. The companys products include smartphones, modems, modules and routers, and tracking devices. AnyDATA has been making embedded cellular modules for about ten years, using Qualcomm as its sole chipset supplier. When Qualcomm introduced WCDMA/HSPA products, AnyDATA introduced such products as well. The companys modules are standardized on the MiniCard form factor. AnyDATA is selective about its customers and targets high volume opportunities. AnyDATA has no present plans to integrate SRW functionality into its modules. The company has seen significant gains with its tracking products.
5.3.2
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module market share leader on both a unit shipment and revenue basis every year since 2003, when ABI Research first started tracking the market. This trend continued in 2008, when the company represented approximately 27% of total industry unit shipments. Cinterion provides modules using the GSM/GPRS, EDGE, and WCDMA/HSPA air standards and targets virtually all M2M application areas including telematics, ATM/POS, tracking and tracing, home security, remote monitoring, and telemedicine along with industrial PCs and PDAs and cellular-enabled routers and gateways. The company organizes its modules into four product families: Evolution, Focus, Verticals, and Terminals. Evolution is the newest product family and includes LGA form factor modules introduced in 2009. The Focus family includes older generations of connected HSPA, GSM/GPRS, and EDGE modules. The Verticals family comprises environmentally hardened modules suitable for automotive and tracking applications. Finally, Cinterion also offers a line of modems in its Terminal family. Two key announcements in 2009 included the October introduction of a UMTS-only module, the EU3. The EU3 works on the newly opened 900 MHz UMTS band in Europe and is targeted at utility applications. Second, a partnership agreement with module vendor Novatel Wireless, announced in November, offered both GSM family (Cinterion) and CDMA family (Novatel Wireless) embedded modules using the same form factor to ease the development burden on OEMs using both partners modules.
5.3.3
Enfora
Enfora (Richardson, Texas) is a privately held company created in 1999 as a spinoff of the wireless division of iNet Technologies. Enfora operates primarily in North America, Latin America, and Europe, although the company has also established a presence in Asia-Pacific and the Middle East and Africa. The company has exclusively sourced cellular baseband ICs from Texas Instruments in the past, and has a contractual supply agreement with TI through 2012 and options to extend beyond then. Enfora offers three module families: the Enabler II, Enabler III Low Power, and Enabler III. The Enabler II comprises GSM/GPRS or EDGE devices. The Enabler III Low Power consists of a GSM/GPRS module that integrates GPS functionality and draws less than 10 mA in an idle state. Finally, the Enabler III comprises GSM/GPRS/EDGE devices that come in either connected or BGA form factors. Strategically, the company is increasingly moving its focus away from pure module sales to integrated platforms, services, and middleware. Enforas integrated platforms include modem and router equipment that the company builds using its own embedded modules and software. Examples of these include the Spider and MT platforms used in vehicle and assettracking applications. Additionally, Enfora can help vertical OEMs get to market quickly through the companys custom design and integration services, in which Enfora designs integrated systems for the OEM customer using its own components and then either manages manufacturing directly or turns the designs over to the customer to manage. Finally, Enfora offers gateway software that enables customers to abstract the underlying cellular network from their enterprise back-end infrastructure.
5.3.4
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the M2M embedded cellular module market and quickly gained significant traction, claiming slightly over 1 million modules shipped in M2M applications in that year. Indeed, other module vendors and other members of the M2M value chain have indicated to ABI Research that they view Huawei as one of the most significant new factors in the market, with the potential for radically reducing the overall pricing structure of the M2M module industry. The majority of Huaweis M2M module sales to date are in China, although the company has also seen success internationally, in Japan with NTT DoCoMo, and in Australia with Telstra. The company is focusing on Europe and North America as well. Huawei provides products using the GSM/GPRS, WCDMA/HSPA, and CDMA air standards, and is targeting modules for all M2M application areas.
5.3.5
iWOW Technology
iWOW Technology (Singapore) is a privately held company founded in 1999. iWOW is organized as a holding company (iWOW Technology) that owns two business units: iWOW Communications and iWOW Connections. iWOW Communications is a design house that primarily assists handset OEMs with the design of mobile handsets, in terms of hardware, software, and firmware. iWOW Connections is a product OEM organization and is the center of iWOWs M2M business, with about thirty-five employees. The company focuses on GSM/GPRS, EDGE, and WCDMA/HSPA air standard technologies and currently uses TI as its sole supplier, though the company has a transition plan in place for the time that TI finally closes down its cellular baseband IC business in approximately three years. All of iWOWs modules are connected at present, although the company is investigating various surface mount form factors. In addition, the company is developing ZigBee-based products. iWOWs strategy is essentially to be a fast follower it works with technologies already established in the market place. Most of the companys modules are sold in the Asia-Pacific region (China and India, primarily), as well as in Europe and South Africa. The company focuses on AMI, defense and homeland security, home security, vehicle tracking, ATM/POS, and SCADAtype remote monitoring. In the future, the company will increasingly target AMI, governmentrelated projects, and automotive OEM telematics. The company, overall, is fairly selective in its client base and seeks to work closely with a smaller number of customers, rather than sell through distribution channels or compete on price.
5.3.6
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Sierra Wireless (Richmond, British Columbia, Canada) was founded in 1993 and became a publicly traded company in 1999. The firm is primarily a vendor of CDMA EV-DO and WCDMA PC Cards, USB modems, and embedded modules for notebook PCs. However, Sierra Wireless is increasingly seeking to leverage its notebook PC 3G connectivity experience to serve the M2M market. The company acquired AirLink Mobile in 2007 to enter the M2M terminal/modem market and in February 2009, the company successfully completed its acquisition of Wavecom. The addition of Wavecom expands Sierra Wireless activities in the M2M space into the broader 2.5G segment of the market and, consequently, expands the range of M2M applications that the company now serves. While previously, Sierra Wireless had been focused on niche high data rate applications, such as remote digital signage, the company now serves other markets, such as AMI and remote monitoring. In addition, although Wavecom had a difficult 2008, it was still the second largest player in the M2M module industry, behind Cinterion, and in 2007, was nearly the same size as Cinterion, in terms of unit sales. Consequently, the acquisition greatly expands the sheer size of Sierra Wireless activities in the M2M market. The combined company benefits from a number of factors. Wavecom brings Sierra Wireless a greater international M2M distribution channel, while Sierra Wireless can leverage its traditionally stronger mobile operator relationships in promoting its expanded M2M business. The larger company benefits from expanded sales volumes by combining both M2M and the traditional PC connectivity business to drive down supply costs. Also, both companies were oriented toward a differentiation strategy that leads to a good cultural fit. Sierra Wireless brings advanced 3G technology, while Wavecom brings its Anyware Technology software development arm, the inSim embedded SIM technology, IDS, and Star Service offerings. Both parts of the company boast a heritage of equipment design and development services. A key challenge will remain for the new Sierra Wireless: the same large multinational vendors Huawei, Ericsson, and Qualcomm that led Sierra Wireless to seek relief in the more and more competitive PC connectivity market are now increasingly entering the M2M market.
5.3.8
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develop connectivity solutions on their own. The parent company ships a vast number of handsets on an ODM basis, giving the company great leverage in its sourcing and supply chain, which it positions to the advantage of its customers.
5.3.9
Telit Communications
Telit Communications (Trieste, Italy) is a publicly traded wireless module vendor that operates three wholly owned Telit Wireless Solutions regional operating companies in North America, Latin America, and Asia-Pacific, in addition to the companys business in Europe. The company provides GSM/GPRS, WCDMA, and CDMA 1xRTT modules, and also has a WCDMA module that is backwards-compatible with EDGE, although EDGE has never been a strong focus for Telit, which believes that the market will shift from GSM/GPRS directly to 3G technologies. In addition, the company focuses heavily on highly integrated modules that combine complementary technologies like GPS, and will increasingly incorporate other functionality, such as ZigBee and Wi-Fi. While the company strives to keep form factors stable across product families for the benefit of the customer, this has not stopped product innovation, and Telit has launched a BGA form factor module in addition to its connected products. In Europe, Telit targets the automotive, telematics, AMI, POS, personal tracking, and security segments, followed by niche fixed-telemetry applications. In North America, Telit focuses on telematics (particularly fleet management), AMR), and security. In the Asia-Pacific region, Telit is concentrates on telematics, OEM automotive, POS, and embedded laptop connectivity. Most recently, the company has introduced its Infinita offering, which essentially seeks to offload module device management functionality from customers and offer it as a managed service.
5.4
5.4.1
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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4Home is targeting four main application service areas: home monitoring, media management, energy management, and farther in the future home health care. Home monitoring, particularly intersecting security, is where the company sees the most traction right now. The firm also sees a major driver in the commoditization of triple play broadband services and believes that in 2008 every major telco broadband service provider was testing managed home automation services. The company is currently working with about twentyfive service providers, including Telstra in Australia and Chungwha Telecom in Taiwan. At CES 2009, the company introduced 4HomeEnergy, the adaptation of its platform for specific use as HAN technology. SENSUS Metering Systems, a major electricity meter vendor, is the first announced licensee of the technology.
5.4.2
AlertMe
AlertMe (Cambridge, United Kingdom) is a privately held provider of home monitoring and energy management technology, which closed an 8M round of funding in 2009 to focus on smart energy. The company was founded in 2007 and has approximately thirty employees. AlertMe has a small direct-to-consumer channel, where consumers purchase technology from the AlertMe web site. However, this is more for AlertMes product development benefit: to have a base of customers with whom it is closely tied as it rolls out its technology. More central to the companys strategy is its reliance on telco and broadband service-provider partners to offer AlertMe technology as part of their own service bundles. In addition, utilities are also becoming important channel partners as the company develops its energy management platform offering. Both the home monitoring and home energy platforms are designed to be turnkey hardware/software systems (eventually the hardware will be licensed to others) meant to be easy and intuitive for consumers to use. The systems communicate to partners back-end systems through the consumers broadband connections or through GPRS connections embedded in the platform controller.
5.4.3
Ambient Devices
Ambient Devices (Cambridge, Massachusetts) is a privately held company founded in 2001 to commercialize patent-pending technologies developed by the MIT Media Laboratory. Ambient focuses on developing systems and components that can be integrated into third-party OEM devices. The company has a particular emphasis on what it calls "polite" or "glanceable" technology that can be integrated into users lives in a way that does not feel overwhelming. In essence, the company provides a way for OEMs to integrate data from the Internet, such as weather information, sports, or energy-pricing into their devices or service offerings. The key components of Ambient Devices offerings include the Ambient Information Network and the AMB-4001-W1 datacast decoder chip. The Ambient Information Network is a back-end service delivery infrastructure and wireless network that uses a nationwide pager network to provide constantly updated data to Ambient-enabled devices. The company bundles wireless service connectivity with its devices with no monthly charge. Examples of Ambient-enabled products include umbrellas with handles that glow when rain is forecast, as well as displays that show seven-day weather forecasts, stock market performance, and sports scores. In addition, LG has introduced a refrigerator that embeds an Ambient-enabled panel to provide weather data. The company has two energy-related products: the Energy Joule is a small plug-in display that uses color codes and simple digital display information to advise consumers on current energy pricing. The Ambient Orb alters color to reflect changes in energy pricing. PG&E is piloting the Ambient Orb in a Demand Response program in California.
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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Arcadian Networks Inc (Valhalla, New York) is a privately held network services provider backed by Gila Ventures and Goldman Sachs. The company has deployed a private wireless WAN network on licensed 700 MHz spectrum that is now available in twenty-three US states. Arcadian Networks focuses on providing connectivity for companies with dispersed assets in rural areas. This comprises utilities for infrastructure, including meters, distributed generation, and substations. The company can provide roughly T1 level of bandwidth with SLAs and low latency. Arcadian Networks essentially offers an alternative between utilities building their own private networks or using public cellular networks for connectivity.
5.4.5
5.4.6
Control4
Control4 (Salt Lake City, Utah) is a privately held whole-home automation system vendor. The company provides both hardware and software components. The software is the cornerstone of the system and, starting in 2008, became available on equipment from other vendors. However, Control4 believes that having its own equipment has been essential to expanding its business. The hardware components include controllers, keypads, touch screens, smart thermostats, AV devices, such as receivers and amplifiers, dimmers and switches, and universal remote controls. Customers also have access to the 4Sight subscription home monitoring service that is available through dealer-installers. Control4 is working to have this accessible through other types of service providers as well. The 4Sight service offers both remote home monitoring and control to customers; the ability for dealer-installers to remotely service systems; and e-mail alerts that can be sent to customer on the basis of user-defined rules. The company has a multitude of drivers, such as security panels, to enable other subsystems to be connected to the Control4 home automation solution. Control4 uses ZigBee and ZigBee PRO as its low power wireless connectivity technology, and provided technical input in the development of the ZigBee PRO stack. In addition, the companys systems can be bridged to Z-Wave and INSTEON. Control4 expects that all automation communications will migrate to wireless from structured wiring, while multimedia communications will remain on structured wiring.
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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Control4 systems are sold mainly through AV dealer-installers, although the companys systems are also available in retail stores, such as Best Buy. In addition, the company is working with home builders. The firm is primarily active in the United States, but has sales in thirteen other countries. The company sees four main entry points in home automation deployment: home theaters in which the customer adds home automation elements; whole-home audio deployments in which the customer adds home automation elements; deployments that start as whole-home automation systems; and, energy management systems. This is reflected in the companys family of controllers: some are oriented towards home theaters systems, some towards wholehome audio, some are purely for whole-home automation solutions, while, most recently, the company has introduced a Home Energy Manager platform.
5.4.7
Current Cost
Current Cost (Andover, United Kingdom) is a privately held company founded in 2004. The company's main focus is providing In-Home Displays (IHD) that connect to standard utility meters. The companys system uses a transmitter that clamps to the meter and sends household consumption data to the IHD over proprietary 433 MHz short-range wireless technology. Energy consumption data can be can be viewed not only on the IHD, but also can be downloaded to PCs, as well, to be graphed and viewed in a variety of formats. So far, the company has introduced three generations of IHDs. The first, known as The Classic, simply displayed overall energy consumption in the home. The second and third generations are able to provide more granular visibility into the energy consumption of individual appliances in the home. Current Cost also provides smaller displays for use around the home to provide snapshots of power use and are meant to be used in conjunction with the main IHD. The company will soon be introducing individual appliance monitors. The company claims to have shipped over 600,000 IHDs starting with a 5,000 device pilot project with UK utility Scottish and Southern Electric (SSE).
5.4.8
5.4.9
CURRENT Group
CURRENT Group (Germantown, Maryland) is a privately held smart grid company founded in 2000 with global operations and offices in the United States and Switzerland. The company has
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approximately 200 employees. CURRENT has completed smart grid projects in the European Union, in Latin America, and in the United States most prominently as part of utility Xcel Energys smart grid/smart metering project in Boulder, Colorado. The company is also working with Spanish utility Iberdrola on its PRIME project to develop an open standards-based PLC technology for smart grid/smart metering applications. CURRENTs smart grid technology is centered on networking and automating Transmission and Distribution (T&D) infrastructure, rather than on smart metering specifically, although the companys technology can form a part of a utilitys overall smart metering infrastructure. The system comprises sensors and analytical software that interoperates with a variety of communication technologies and exchanges information with third-party Meter Data Management (MDM) systems through Service-Oriented Architecture (SOA) technology. The company typically goes to market as part of a consortium of firms that brings a total smart grid/smart metering solution to the utility.
5.4.10
ecobee Inc
ecobee Inc (Toronto, Ontario, Canada) is a privately held maker of smart thermostats (also known as programmable communicating thermostats), with sales in Canada and the United States. The companys thermostats provide a sophisticated touch-screen interface to program a variety of modes and functions related to the control of air conditioners, humidifiers, and other climate control systems. Users can also register their thermostats and have access to customized web portals to view and control the thermostats with even greater precision than with the touch-screen interface. While the thermostat is primarily meant to be used as a standalone system, it can also be used in conjunction with utility DR programs. For instance, the thermostat can receive utility pricing event data, emergency event data, as well as enable the customer to override utility DR actions. In addition, the consumers individualized web portal can be integrated with utility billing information. The thermostat is web-enabled through a Wi-Fi connection to the consumer's broadband Internet connection and also has optional ZigBee expansion slots. The company plans to eventually make its thermostats controllable via smartphones. The thermostats comply with the ZigBee Smart Energy profile.
5.4.11
Ember Corporation
Ember Corporation (Boston, Massachusetts) is a privately held company founded in 2001, based on research work done at MIT in the 1990s on low power wireless mesh networking. The company is a leading provider of IEEE 802.15.4 ICs using its EmberZNet ZigBee protocol software stack. Embers two chip products are the EM250 System-on-Chip (Soc) and the EM260 co-processor. The EM250 integrates a 16-bit microcontroller MCU, Flash, RAM, and IEEE 802.15.4 RFIC. The EM260 integrates an IEEE 802.15.4 RFIC, Flash, and RAM, but minimizes the MCU resources, which runs only the EmberZNet ZigBee stack, while the customer uses its own MCU for application processing. The EM250 is for customers who want the most tightly integrated solutions, while the EM260 is for those who prefer to have their own MCUs for application processing. The company is now shipping the EmberZNet PRO ZigBee PRO stack. In addition, the firm has developed AT Builder, a point-and-click tool for home automation developers to use in creating their applications. Ember says that developers can cut the time for fully interoperable solutions down to a matter of days or a week. Ember is active in the markets for smart metering, commercial building automation, and home automation. In addition, the company operates in the industrial automation, asset management, and defense markets.
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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eMeter Inc (San Mateo, California) is a privately held MDM vendor. The company has approximately 160 employees with offices in Sydney, Australia, and London, United Kingdom, in addition to its California headquarters. eMeter competes against five MDM vendors as well as custom-developed MDM systems built for specific utilities by their system integrators. MDM software is a relatively new product category in the utility space, and serves as enterprise middleware between the smart metering technology system and the utilities back-end enterprise architecture. eMeters MDM system is called EnergyIP and uses a SOA approach to interconnect with other utility infrastructure. The company is part of the Siemens Smart Grid group and generally goes to market in partnership with a large Tier One systems integrator or smart grid technology vendor. eMeter derives revenue through a per-meter standard perpetual licensing plus maintenance model. The company launched the Energy Engage customer engagement software offering in June 2009.
5.4.13
Energate Inc
Energate Inc (Ottawa, Ontario, Canada) is a privately held HAN technology vendor founded in 2004 by a team with many years of experience in the programmable thermostat market. The company had approximately fifty employees at the end of 2008 but claims to be growing rapidly. Energate is directly active in the North American market, but some of its partners have used Energate technology in deployments in Europe and the Asia-Pacific region. The companys business model is to directly target utilities with HAN technology, but Energate also works with AMI and home automation technology partners who incorporate Energate technology into their own systems for utilities and other customers. In some cases, the utility puts together a consortium that enables DR deployment; in other cases, the utility expects Energate to organize the consortium. In some instances, the utility has an AMI partner that creates the consortium. Energate's Home Energy Management Platform is the companys offer in the HAN space and comprises hardware and software centered on a Programmable Communicating Thermostat (PCT) and load control switches.
5.4.14
EnergyHub Inc
EnergyHub Inc (Brooklyn, New York) is a privately held maker of home energy management systems founded in 2007. The EnergyHub system comprises a starter kit containing a touch screen dashboard and temperature control unit. The basic system can provide the functionality of a programmable communicating thermostat and also communicates with wirelessly enabled smart meters to monitor whole home energy usage. With the addition of optional wall sockets and wall strips, the system can also monitor and control the consumption of energy by individual appliances. Different components of the system converse using ZigBee short-range wireless technology. The system can work on a standalone basis to enable consumers to monitor their own energy consumption, or can be used in conjunction with utility DR programs. In the context of utility DR programs, the system can receive DR signals from the utility and enable the consumer to respond in either automated or manual fashion. In addition, EnergyHub posts micro-sites for the utilities to enable them to communicate with their customers, and enable the customers to better visualize their energy consumption. The hosted micro-sites also enable consumers to measure their energy consumption relative to that of their neighbors. It is important to note that EnergyHub is working to enable its system to interact with one-way communicating AMI meters as well as more modern two-way communicating smart meters. EnergyHub's first announced utility partnership is with New York-based Con Edison, for a pilot project in Queens, New York, revealed in September 2009.
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EnerNOC Inc (Boston, Massachusetts) is a publicly traded DR aggregator focused on industrial and commercial end users of energy, rather than the residential market. The company was founded in 2001 and went public in 2003 and now has approximately 370 employees. EnerNOC has focused on the North American market to date, although it recently entered the United Kingdom as well. EnerNOC says its value proposition to the utilities and grid operators who are its primary customers is that it enables DR capabilities in a streamlined turnkey fashion. The company receives a recurring revenue stream from its customers to provide DR (and related services). The company pays its industrial and commercial DR program participants an ongoing fee to be part of the program and an additional fee to respond to a DR event. There is no cost or risk to the end user of energy to participate; there are no penalties if the end user cannot meet a specific DR event.
5.4.16
EnOcean Alliance
The EnOcean Alliance is an industry organization promoting the development and adoption of the EnOcean energy-harvesting SRW technology. The alliance currently has over 120 member companies and is in the initial stages of becoming formally ratified as an international standard by the IEC. The first alliance-produced EnOcean specification was announced in October 2009 and while virtually identical to the EnOcean technology produced by the vendor EnOcean GmbH, is now controlled by the member companies. Essentially, EnOcean GmbHs relationship to the technology will be as a component vendor as well as IPR licensor, similarly to the model Qualcomm uses for CDMA technology.
5.4.17
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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Freescale Semiconductor (Austin, Texas) is a global provider in the design and manufacture of embedded semiconductors for the automotive, consumer, industrial, networking and wireless markets. The privately held company has design, research and development, manufacturing and sales operations in more than thirty countries. Freescale is one of the world's largest semiconductor companies with 2007 sales of $5.7 billion. Freescale's Simple MAC (SMAC) provides a straightforward and cost-effective solution for wireless networking. Based on the 802.15.4 PHY, it supplies commands to create simple pointto-point and star networks. The small code size allows the use of a low cost MCU combined with the MC13201 RF transceiver, creating the ideal platform for applications looking to "cut the cord." In addition, features such as repeaters and over-the-air updates help to create a feature-rich protocol in a small package. Freescale's Synkro Protocol is a lightweight networking stack built on top of the IEEE 802.15.4 standard. The protocol was created to control, monitor, and automate consumer electronic products including televisions, DVD players and recorders, set-top boxes, audio video receivers, remote controls and much more. Synkro overcomes the growing technology challenges that todays consumer electronic products face with thirty-year-old Infrared (IR) technology by removing the line of sight and field of vision issues while providing a fast bidirectional link to enhance the user experience. Freescale's Synkro starts with 802.15.4, but incorporates improvements to avoid interference by adding channel agility and low latency transmissions to address the specific needs of consumer electronics. There are two ways to develop a Synkro application: the Synkro API and Synkro BlackBox. The Synkro API allows application development using the embedded processor running the Synkro Protocol. This is the lowest cost solution. The Synkro BlackBox provides access to the complete Synkro API through a serial command set. This alternative allows application development on a separate processor that enables a more flexible system definition to meet the specific needs of end products.
5.4.19
Google
Google (Mountain View, California) announced its PowerMeter energy management dashboard in February 2009. PowerMeter, which should be available in early 2010, monitors household energy consumption data obtained from smart meters as well as from in-home energy management devices. The graphical user interface comprises a Google gadget that shows up on users iGoogle home pages. Similar to other Google gadgets, PowerMeter tracks historical data and can extrapolate future consumption trends. PowerMeter is intended to be a free opt-in service for which consumers will need to sign up. Google has announced a partnership with smart meter maker Itron, which will enable its meters to communicate with the PowerMeter service. In addition, Google has announced partnerships with a number of utilities: San Diego Gas & Electric in California, TXU Energy in Texas, JEA in Florida, Wisconsin Public Service Corporation in Wisconsin, White River Valley Electric Cooperative in Missouri, Glasgow EPB in Kentucky, Toronto Hydro-Electric System Limited in Canada, and Reliance Energy in India.
5.4.20
GreenWare
GreenWare (Hong Kong, China) is a privately held company founded as a partnership between Asia-based M2M modem OEM Fargo Telecom and investment firm SustainAsia. GreenWare will focus on energy efficiency applications ranging from the smart grid to more generalized remote monitoring to cut pollution and waste by businesses. The core value offering is a web-based software platform married to Fargo Telecom hardware. GreenWare will hire its own staff,
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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focusing on system architecture, with additional hardware support from Fargo Telecom. Geographically, the company will start operations in Hong Kong, Vietnam, and Shanghai. Fundamentally, the goal is to provide a solution for medium-scale customers that may not find the need for a complex, large-scale enterprise system from IBM or SAP, but are too large for simple custom solutions from local integrators.
5.4.21
5.4.22
5.4.23
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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Security 2.O is a turnkey platform for service providers comprising the hosted backend infrastructure that is branded to the partners specifications, and includes branded customer support, billing, and fulfillment. The customer premise equipment consists of the iHub gateway, which can either be a standalone device or technology integrated into the service providers broadband CPE device or security panel. The system provides home monitoring sensors, web cams, and traditional security alarm systems. Information from the home is accessible via touch screens, the web, and smartphones and additional control functionality is enabled through thirdparty devices. The platform communicates over both ZigBee and Z-Wave technology.
5.4.24
Intamac Systems
Intamac Systems (Northampton, United Kingdom) is a privately held provider of web-based home control and monitoring systems founded in 2001. Intamac has offices in Australia, Canada, and South Korea, and has about thirty-five employees. The company focuses on multiple home control applications areas, including energy monitoring and management, home security, telehealth, as well as traditional home automation functionality (control of lights, blinds, and so on) The company supplies service provider partner companies with a managed service offering that enables consumers to remotely monitor and control the devices, systems, and appliances in their homes. Intamac has seen success partnering with large service provider organizations: the companys Home Manager service forms the technology behind the BT Home Monitor VP1000 offering, as well as the Bell Home Monitoring product kit. The company has also partnered with other energy management firms, such as UK-based Current Cost. Intamac secured funding in 2009 to introduce a range of ZigBee-controlled consumer devices that will connect to and be controlled by the Home Manager platform.
5.4.25
Lagotek Corporation
Lagotek Corporation (Bellevue, Washington) is a privately held vendor of whole home automation system technology, founded in 2005 by a group of former Microsoft employees. The company says its focus is on making the whole home automation technology easy to install, affordable, and reliable, with the goal of having automation a common feature in mainstream homes. Two key aspects of this strategy are the distributed intelligence of Lagoteks architecture, and the companys emphasis on wireless technology. The company operates primarily in North America, with customers in the United States, Canada, and Mexico, as well as South Africa. The company system is distributed and software-based, essentially comprising brains that can control the overall solution and act as backup in case an element of the system is unavailable. This eliminates single points of failure and enables control from a range of devices, such as a traditional touch panel, PC, or smartphone. A customer could control the entire system from a single smartphone. As part of its distributed control system, the company uses the concepts of modes and rules to instill a high degree of control flexibility. Modes are essentially scenes, but are capable of being mapped to any and all of the connected devices in the home. Wolves are pre-set commands that trigger system actions in response to specific events. Lagotek points out that controlling a whole home automation system from a smartphone device would be time-consuming, but would be simplified with the use of modes.
5.4.26
Microsoft Corporation
Microsoft Corporation (Redmond, Washington) announced its Hohm online energy management application in June 2009. The application is designed to enable consumers to monitor their energy consumption and access recommendations on how to increase their overall energy
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efficiency. While Microsoft has licensed algorithms from Lawrence Berkeley National Laboratory and the US Department of Energy to provide consumers with personalized energy-saving recommendations, the functionality of the current beta release is relatively limited, requiring users to enter their energy consumption data manually, unless their utility has partnered with Microsoft, in which case the data can be downloaded to the application automatically. However, it is still unclear how much granularity of energy consumption usage will be available, or if Microsoft will enable connections to other devices within the home, as most other home energy management systems do today. At present, Hohm is more of a recommendation engine than a true energy management portal. Microsoft has announced a number of utility partnerships for its Hohm application, including Seattle City Light, Sacramento Municipal Utility District (SMUD), Xcel Energy, and Puget Sound Energy. In addition, the company has announced two smart meter vendor partnerships, with Itron, and Landis+Gyr.
5.4.27
OpenPeak Inc
OpenPeak Inc (Boca Raton, Florida) is a closely held vendor of multimedia IP phones. The company closed $30 million in funding in 2007. The company's main products are the OpenFrame introduced in 2008 and the ProFrame introduced in January 2009. The OpenFrame is essentially a multimedia update to the traditional fixed-line home phone. Using a large 7-inch touch screen, home users can access not only their phones, but other common apps as well including music files, photos, and local weather and news. The ProFrame platform extends the functionality of OpenFrame to corporate users. In June 2009, the company announced its Home Energy Management Solution. Built upon the OpenFrame platform, this solution enables access to real-time pricing and energy usage data. The platform also provides a centralized user interface for thermostats and for DR notifications by utilities to their customers. The platform supports common communication technologies, such as ZigBee and Wi-Fi. In September 2009, the company announced that smart meter maker Itron would be the first meter vendor to support the Home Energy Management Solution platform, connecting the platform to Itrons OpenWay smart meter platform.
5.4.28
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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Smart Meters for Smart Grids 5.4.29 Portus Singapore Pte Ltd
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Portus Singapore Pte Ltd is a privately held company founded in Australia in 2000 that has been headquartered in Singapore since 2003. Portus is a developer of a managed home automation system platform, called DIAS. DIAS enables home control, home monitoring, home security, and home energy management. It comprises software combined with broadband CPE devices. The solution uses DSL and Ethernet as the uplink to the service provider, and Z-Wave for interconnection to other sensor devices throughout the home. (The company is fairly agnostic to short-range communication technologies, however). The gateway uses the Open System Gateway initiative (OSGi) standard to enable remote management of the device and services by the service provider, and can work with providers in custom-building back-end server software platforms. While the company targets both broadband service providers and utilities, it is finding more traction with utilities around the world and deploying the DIAS system as an energy management/HAN platform.
5.4.30
5.4.31
RWE AG
RWE AG (Essen, Germany) is a large integrated Investor-Owned Utility (IOU) with operations in Central Europe and the United Kingdom. As an integrated utility, RWE has mining and generation operations, in addition to T&D and retail utility (electricity and gas) operations. RWE launched a smart metering initiative in the Germany city of Mulheim in July 2008 and, to date, has deployed roughly 100,000 smart meters. Over a number of years, RWE plans to install approximately 9 million smart electricity meters, and about 1 million smart gas meters. This is partly in response to a German law stipulating that all new and renovated homes and apartments must have smart meters installed starting in 2010. However, RWE will be collecting data only on a monthly basis, not fifteen-minute intervals. The deployment will use a combination of PLC and cellular technologies. Although RWE is mainly interested in automating its meter reading operations, as opposed to instituting DR programs, it has announced a collaborative effort with Nokia to deploy various smart home services. This effort is in the earliest stages, so the eventual services that may actually be deployed are still unknown.
5.4.32
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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Through this type of closed system, Sequentric believes it can offer its utility customers an inexpensive HAN platform that has carrier-class reliability and security. The company is targeting installation costs at less than $150 per home. Another key component of the system is server software residing in the utilitys NOC. The Sequentric solution is meant to provide the utilities with highly granular visibility and control over a plethora of load centers in the home, from large systems that have their own circuit breakers that are monitored and controlled at the circuit box, to smaller devices that are monitored and controlled via smart wall plug adapters. Using Sequentric-derived algorithms, the utility can balance the load profile in an individual home and across its rate base, dramatically reducing its reliance on peak generating capacity.
5.4.33
Tendril Networks
Tendril Networks (Lafayette, Colorado) is a privately held provider of home energy management system technology. The companys EMS is the Tendril Residential Energy Ecosystem (TREE), comprising both in-home software as well as utility back-end HAN/DR management software. Tendril has enabled the TREE platform with a number of UI options, including: in-home displays, web portals, mobile devices, and smart thermostats. The in-home software interfaces with other devices to provide consumers with energy consumption data. In July 2009, GE announced that it is working to integrate the TREE software to work with GEs upcoming line of smart appliances. The utility back-end software enables utilities and energy retailers to manage million of customer DSM systems and communicate directly with customers on service issues. The TREE platform provides consumers with real-time energy consumption data, cost information, and estimated monthly bills. In March 2009, Tendril announced a device to receive the wireless signal from one-way AMR meters, which are more widely deployed than the two-way communicating smart meters, and using the data in the home EMS as well as transmitting the data to the utility.
5.4.34
uControl Inc
uControl Inc (Austin, Texas) is a privately held provider of advanced home monitoring and home security solutions. Like iControl and Xanboo, the company is now focusing on managed turnkey solutions for telco and broadband service providers, as well as traditional security services providers. This is a recent change for the company, as uControl originally went to market with a directto-consumer model. uControls Security, Monitoring, and Automation (SMA) solution comes in either dual connect or triple connect versions, with dual connect comprising traditional phone lines along with a broadband link back to uControls network operations center. The triple connect option integrates cellular connectivity with the other two backhaul technologies. The company is expanding its capabilities to offer managed automation services. Currently, uControl equipment is compatible with Z-Wave, ZigBee, and INSTEON.
5.4.35
Xanboo Inc
Xanboo Inc (New York, New York) is a privately held vendor founded in 2000. The company is principally focused on home monitoring applications, although it is increasingly becoming involved in small business monitoring, as well. Screening freezers or general temperatures is an application seeing traction in the small business market. AT&T is a key partner; Xanboo technology powers AT&Ts Home Monitor service, as well as the newer Remote Monitor service targeting small businesses that AT&T introduced in November 2007. Other announced service provider customers include Mediacom and Telecom Italia. The company is primarily active in North America although it is seeing some business in Latin America and Europe.
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The company focuses on sales through service provider channels, but has also developed a partnership with a firm that will enable it to target thousands of small security dealerships. The partner will be responsible for maintaining relationships with the dealers, and will be the brand for the service. The partner will look like any other service provider to Xanboo. Xanboo is seeing interest from the security industry for integrating home monitoring functionality. Security companies can integrate Xanboos turnkey service to a desired degree; the service can essentially run in parallel with traditional security offerings. Xanboos product line essentially consists of a variety of sensor devices using the 400 MHz RF spectrum (although the company is agnostic about radio standards and its system can incorporate Z-Wave, ZigBee, and so on), and a gateway device that links through the homes broadband Internet connection. Xanboo hosts servers that maintain the connections between subscribers cellphones or remote PCs and their homes. The company basically provides packaged services that other firms can resell to their subscribers.
5.4.36
ZigBee Alliance
The ZigBee Alliance is an open industry organization comprising more than 150 companies focused on bringing low power, low data rate wireless mesh technology to market for a variety of monitoring and control applications. In addition to home automation, the alliance is focused on energy management, industrial automation, and building automation. The ZigBee protocol addresses the networking, security, and application layers of the mesh network, utilizing 802.15.4 ICs at the physical layer. In addition to defining the protocol itself, the alliance manages interoperability testing, protocol evolution, and branding and marketing of the ZigBee protocol.
5.4.37
Z-Wave Alliance
The Z-Wave Alliance is an industry organization founded in 2005 by Zensys the developer of Z-Wave technology and a group of other equipment vendors and service providers. The alliance numbers more than 160 members and serves them as an interoperability testing, certification, and marketing organization. The key members include Zensys, Intel, Monster Cable, Intermatic, Leviton, Universal Electronics, Wayne-Dalton, Danfoss, and Cooper Lighting Devices.
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Section 6.
COMPANY DIRECTORY
4Home Inc www.4home.com Accenture www.accenture.com Aclara Power Line Systems Inc aclaratech.com Aeris Communications www.aeris.net/ AlertMe www.alertme.com Ambient Devices www.ambientdevices.com AnyDATA www.anydata.com Arcadian Networks Inc www,arcadiannetworks.com AT&T Corporation www.att.com Atos Origin www.atosorigin.com Blue Line Innovations Inc www.bluelineinnovations.com CalAmp Corporation www.calamp.com Cinterion Wireless Modules www.cinterion.com Cisco Systems Inc www.cisco.com Control4 www.control4.com Coronis Systems www.coronis.com
CrossBridge Solutions www.crossbridgesolutions.com Current Cost www.currentcost.com Digital Home Alliance www.digitalhome.com Digi International www.digi.com/ Echelon www.lonworks.echelon.com ecobee Inc www.ecobee.com Eka Systems Inc http://www.ekasystems.com/ Elster Integrated Solutions www.elsterelectricity.com/ Ember Corporation www.ember.com eMeter Inc www.emeter.com/ Energate Inc www.energateinc.com/ EnergyHub www.energyhub.net EnerNOC Inc www.enernoc.com Enfora www.enfora.com EnOcean Alliance www.enocean-alliance.org ESCO Technologies Inc www.escotechnologies.com
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iWOW Technology www.iwow.com.sg Jasper Wireless www.jasperwireless.com KMX Association www.knx.org KPN Group www.kpn.com KORE Telematics www.korewireless.com Lagotek Corporation www.lagotek.com Landis & Gyr www.landisgyr.com Mach Communications www.machcommunications.com.au Maestro Wireless Solutions Co Ltd www.maestro-wireless.com Microsoft Corporation www.microsoft.com Motorola Inc www.motorola.com m2mGlobal Alliance www.m2mglobal.cm NTT DoCoMo www.nttdocomo.com Numerex Corporation www.numerex.com NURI Telecom www.nuritelcom.co OpenPeak Inc www.openpeak.com Orange Business Services www.business.orange.co.uk
Exceptional Innovation LLC www.exceptionalinnovation.com FreeMove Alliance www.freemoveallince.com Freescale Semiconductor www.freescale.com GE Energy www.gepower.com Google www.google.com Grid Net www.grid-net.com GridPoint www.gridpoint.com/ GridWise Alliance Inc www.gridwise.org HomePlug Powerline Alliance www.homeplug.org Huawei Technologies Co Ltd www.huawei.com Holley Metering Ltd www.hollymetering.com/en IBM Corporation www.ibm.com iControl Networks Inc www.icontrol.com Infineon Technologies AG www.infineon.com Intamac Systems www.intamac.com IPSO Alliance www.ipso-alliance.org Iskraemeco www.iskraemeco.si Itron Inc http://www.itron.com/
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Telenor Cinclus www.telenorcinclus.com/uk Telenor Group www.telenor.com Telit Communications www.telis.com TELUS www.telus.com Telvent www.telvent.com Tendril Networks www.tendrilinc.com T-Mobile USA www.t-mobile.com Trilliant Networks www.TrilliantNetworks.com uControl Inc www.ucontrol.com U-SNAP Alliance www.usnap.org Verizon Wireless: USA www.verizonwireless.com Vodafone Group Public Ltd Company (HC) www.vodafone.com Wyless PLC www.wyless.com Xanboo Inc www.xanboo.com XATA Corporation www.xata.com ZigBee Alliance www.zigbee.org Z-Wave Alliance www.z-wave alliance.org
Pacific Gas & Electric Co www.pge.com Portus Singapore Pte Ltd www.portus.com.au PowerHouse Dynamics llc www.powerhousedynamics.com Qualcomm Inc www.qualcomm.com Rogers Communications Inc www.rogerscommunications.com RWE AG www.rwe.com Sensus Metering Systems www.sensus.com Sequentric Energy Systems LLC www.sequentric.com Sierra Wireless www.sierrawireless.com Silver Spring Networks www.silverspringnetworks.com SIMCom Wireless Solutions www.sim.com/wm SmartLabs Inc www.smartlabsinc.com SmartSynch www.smartsynch.com Southern California Edison\ www.SCE.com Sprint www.sprint.com Swisscom www.swisscom.ch Tantalus Systems Corporation www.tantalus.com Telefnica www.telefonica.com
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Section 7.
ACRONYMS
1xRTT AEC AES AMCO AMI AMPS AMR AMS ANSI API APN ARPU ARRA ASHRAE ASP ASP AV AVL B2B BGA BOM BPL C&I
One Times Radio Transmission Technology (CDMA 2000) Advanced Energy Control (Z-Wave) Advanced Encryption Standard American Meter Company Advanced Metering Infrastructure Advanced Mobile Phone System (Cellular System) Automated or Advanced Meter Reads Advanced Metering System(s) American National Standards Institute Application Programming Interface Access Point Name Average Revenue per User American Recovery and Reinvestment Act of 2009 American Society of Heating, Refrigeration, and Air-Conditioning Engineers Average Selling Price Authorized Service Provider Audiovisual Automatic Vehicle Location Business to Business Ball Grid Array Bill of Materials Broadband over Power Line Commercial and Industrial
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Compound Annual Average Growth Rate Command and Control (HomePlug Powerline Alliance) Code Division Multiple Access Consumer Electronics Comit Europen Standardization) de Normalisation (French: European Committee for
CAGR CC CDMA CE
CEN
CENELEC CES CIP CPE CPP CPUC CSCTG DA DHA DIY DLC
Comit Europen de Normalisation lectrotechnique (European Committee for Electrotechnical Standardization) Consumer Electronics Show Critical Infrastructure Protection Customer Premises Equipment (home telecommunications equipment) Critical Peak Pricing California Public Utility Commission Cyber Security Coordination Task Group (NIST) Distribution Automation Digital Home Alliance Do It Yourself Distribution Line Communications Device Language Message Specification/Companion Specification for Energy Metering DoCoMo Packet Transmission Demand Response Digital Subscriber Line Demand Side Management Enterprise on Demand (AT&T) European Commission Elliptical Curve Cryptography
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lectricit de France Enhanced Data for GSM Environment Energy Independence and Security Act of 2007 (US) Energy Management System Energy Policy Act of 2005 (US) Electronic Point of Sale Energy Services Directive (Europe) European Telecommunications Standards Institute (France) European Union Evolution Data Optimized (aka Evolution Data Only) Federal Energy Regulatory Commission FreeMove Alliance Freedom of Mobile Multimedia Access (NTT DoCoMo; Japan) Fixed Wireless Terminal(s) Green PHY (HomePlug Powerline Alliance) General Radio Packet System Global System for Mobile Communications/ General Packet Radio Service Home Area Network(s) Home Energy Management Systems Home Location Register Holley Metering Ltd (China) High Speed Packet Access Heating, Ventilating, and Air Conditioning Integrated Digital Enhanced Network (Motorola variant of TDMA wireless) International Electrotechnical Commission Institute of Electrical & Electronics Engineers Inc
EDF EDGE EISA EMS EPAct EPOS ESD ETSI EU EV-DO FERC FMA FOMA FWT GP GRPS GSM/GPRS HAN HEMS HLR HML HSPA HVAC iDEN IEC IEEE
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Internet Engineering Task Force In-Home Display(s) International M2M Center (France Telecom) Investor-Owned Utilities Internet Protocol Intellectual Property Rights IP for Smart Objects Alliance Internet Protocol Version 6 Infrared Interoperable Self-Installation (Echelon LonWorks) International Standards Organization Independent System Operators/Regional Transmission Organizations Joint Venture Kilobytes Compaa de Luz y Fuerza del Centro (Mexico) Land-Grid-Array Long Term Evolution (3GPP 4G technology) Machine to Machine Milliampere Media Access Control Metering Automation Server (Elster Integrated Solutions) Multipoint Control Unit Meter Data Management Megahertz Massachusetts Institute of Technology M2M Mobile Operator
IETF IHD IMC IOU IP IPR IPSO IPv6 IR ISI ISO ISO/RTO JV KB LFC LGA LTE M2M mA MAC MAS MCU MDM MHz MIT MMO
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Mobile Network Operator (wireless telecommunications) Mobile Virtual Network Enabler Mobile Virtual Network Operator Neighborhood Area Network(s) North American Electric Reliability Council Networked Energy Services (Echelon) Near Field Communication National Institute of Standards and Technology (US) Network Management System Network Operations Center Open Development Initiative (technological project) Original Design Manufacturer Original Equipment Manufacturer Open Public Extended Network Open System Gateway initiative Personal Communication Services Programmable Communication Thermostat Personal Digital Assistant Packet Data Convergence Protocol (3GPP) Pacific Gas & Electric Plug-In Hybrid Electric Vehicle(s) Physical Layer Device Power Line Communication Phasor Measurement Unit Point of Sale Powerline-Related Intelligent Metering Evolution
MNO MVNE MVNO NAN NERC NES NFC NIST NMS NOC ODI ODM OEM OPEN OSGi PCS PCT PDA PDC-P PG&E PHEV PHY PLC PMU POS PRIME
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Public Service Commission(s) PCS Type Certification Review Board Qualcomm Enterprise Services Random Access Memory Retail Energy Providers Radio Frequency Routing over Low Power and Lossy (IETF) Standardization Administration of China Supervisory Control and Data Acquisition Southern California Edison San Diego Gas & Electric Standards Development Organization(s) Smart Energy Profile (ZigBee Alliance) Smart Grid Interoperability Panel Subscriber Identity Module (ETSI GSM technical specification) Service Level Agreement(s) Security, Monitoring, and Automation Simple MAC (Freescale Semiconductor) Short Message Service Smart Mixed-Signal Connectivity Sacramento Municipal Utility District Service-Oriented Architecture System-on-Chip Search and Retrieve via the Web Scottish and Southern Electric Smart Utility Network
PSC PTCRB QES RAM REP RF ROLL SAC SCADA SCE SDG&E SDO SEP SGIP SIM SLA SMA SMAC SMS SMSC SMUD SOA SoC SRW SSE SUN
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Quality of Service Transmission and Distribution Total Available Market Transmission Control Protocol/Internet Protocol Time Division Multiple Access Texas Instruments Transaction Management System Time of Use Tendril Residential Energy Ecosystem Tantalus Utility Network Two-Way Automatic Communication System Utility Communications Architecture User Interface Universal Metering Interface Universal Mobile Telecommunications System Universal Serial Bus Value-Added Reseller (usually of technology products) Wide Area Network Hertz (formerly cycles per second) Wideband Code Division Multiple Access Wireless Fidelity Worldwide Interoperability for Microwave Access, Inc. (group promoting IEEE 802.16 wireless broadband standard) Wireless Local Loop Web Services for Devices Extensible Markup Language
QoS T&D TAM TCP/IP TDMA TI TMS TOU TREE TUNet TWACS UCA UI UMI UMTS USB VAR WAN Hz WCDMA Wi-Fi
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Table of Contents
Section 1. ........................................................................................................................................ 2 Executive Summary ....................................................................................................................... 2 1.1 Making the Electrical Grid Smart .......................................................................................... 2 1.2 The Evolving Smart Grid Value Chain/Competitive Landscape ............................................. 3 1.3 Forecasting the Smart Grid..................................................................................................... 4 Section 2. ........................................................................................................................................ 5 Market Issues ................................................................................................................................. 5 2.1 Introduction to the Smart Grid................................................................................................. 5 2.1.1 The Market Landscape ........................................................................................................ 5 2.1.2 The Benefits of a Smart Grid ............................................................................................... 6 2.1.2.1 Automated Meter Reads ................................................................................................... 6 2.1.2.2 Demand Response, Time of Use, and Critical Peak Pricing ............................................ 6 2.1.2.3 Remote Connect/Disconnect ............................................................................................ 6 2.1.2.4 Remote Fault Detection .................................................................................................... 6 2.1.2.5 Net Metering...................................................................................................................... 7 2.1.3 Smart Grid Market Drivers ................................................................................................... 7 2.1.3.1 Regulatory Mandates ........................................................................................................ 7 2.1.3.2 Energy Efficiency and Reliability....................................................................................... 7 2.1.3.3 Operational Efficiency ....................................................................................................... 7 2.1.3.4 Environmental Concerns................................................................................................... 7 2.1.3.5 Improved Customer Service ............................................................................................. 8 2.1.3.6 Reduction of Energy Theft ................................................................................................ 8 2.1.3.7 Energy Market Competition .............................................................................................. 8 2.1.4 Smart Grid Market Challenges............................................................................................. 8 2.1.4.1 Evolving Standards Landscape ........................................................................................ 8 2.1.4.2 Project Complexity ............................................................................................................ 9 2.1.4.3 Business Case Complexity ............................................................................................... 9 2.1.4.4 Project Costs..................................................................................................................... 9 2.1.4.5 Consumer Acceptance.................................................................................................... 10 2.2 Value Chain and Competitive Landscape Trends ................................................................ 10 2.2.1 Utility Landscape................................................................................................................ 11 2.2.2 Smart Meter and AMI Technology Vendors....................................................................... 12 2.2.3 HAN/DR Vendors ............................................................................................................... 13 2.2.3.1 Platform Plays ................................................................................................................. 14 2.2.3.2 Consolidation Trends ...................................................................................................... 14 2.2.3.3 The Impact of Google and Microsoft............................................................................... 15 2.2.4 Smart Grid Communication Services Providers ................................................................ 15 2.2.4.1 Cellular Connectivity Providers ....................................................................................... 15 2.2.4.2 Turnkey Managed Service Providers.............................................................................. 16 2.3 Regional Trends.................................................................................................................... 17 2.3.1 North America .................................................................................................................... 17 2.3.2 Europe................................................................................................................................ 18 2.3.3 Asia-Pacific ........................................................................................................................ 19 2.3.4 Latin America ..................................................................................................................... 19 2.3.5 Middle East and Africa ....................................................................................................... 20 2.4 Legislative and Regulatory Impact Analysis ......................................................................... 20 2.4.1 North America .................................................................................................................... 21 2.4.1.1 Energy Policy Act of 2005............................................................................................... 21 2.4.1.2 Energy Independence and Security Act of 2007 ............................................................ 22
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2.4.1.3 California Smart Metering Largely Results from a Mandate for Energy Efficiency and Reliability ........................................................................................................................................ 22 2.4.1.4 Texas Smart Metering Driven both by Regulatory Mandate and Retail Competition ..... 23 2.4.2 Europe................................................................................................................................ 23 2.4.2.1 European Directive 2003/54/EC ..................................................................................... 24 2.4.2.2 European Directive 2006/32/EC ..................................................................................... 24 2.4.2.3 Third Energy Package .................................................................................................... 24 Section 3. ...................................................................................................................................... 25 Technology Issues....................................................................................................................... 25 3.1 The Drive towards a Smart Grid ........................................................................................... 25 3.2 Key Smart Grid Standardization Efforts ................................................................................ 26 3.2.1 International Standards...................................................................................................... 26 3.2.2 Government Mandates ...................................................................................................... 27 3.2.2.1 The NIST Framework...................................................................................................... 27 3.2.2.2 EC Mandate M/441 and the OPEN Meter Project .......................................................... 28 3.2.3 Utility-specific Efforts.......................................................................................................... 28 3.3 Cyber Security for the Smart Grid......................................................................................... 29 3.4 Wide Area Networking in the Smart Grid .............................................................................. 30 3.4.1 US Market Landscape ....................................................................................................... 30 3.4.2 International Market Landscape......................................................................................... 30 3.5 The Impact of the Shift to 3G Cellular Infrastructure on the Smart Meter ............................ 31 3.5.1 Concerns Regarding 2G Network Longevity ..................................................................... 31 3.5.2 Reasons for and against the Shift to 3G in Smart Grid Communications.......................... 32 3.6 Distribution Automation Issues ............................................................................................. 32 3.7 Neighborhood Area Networks............................................................................................... 33 3.7.1 Power Line Communications in Smart Metering................................................................ 33 3.7.2 Fixed RF in Smart Metering ............................................................................................... 34 3.8 Home Area Networks and No-New-Wire Communication Technologies ........................... 35 3.8.1 ZigBee Smart Energy......................................................................................................... 35 3.8.2 HomePlug Green PHY....................................................................................................... 35 3.8.3 Z-Wave Advanced Energy Control Framework ................................................................. 36 3.8.4 6loWPAN............................................................................................................................ 36 3.8.5 Wireless M-Bus .................................................................................................................. 36 3.8.6 EnOcean ............................................................................................................................ 37 3.8.7 LonWorks ISI...................................................................................................................... 37 3.8.8 INSTEON ........................................................................................................................... 37 3.8.9 KNX.................................................................................................................................... 38 3.9 U-SNAP and the Universal Metering Interface ..................................................................... 38 Section 4. ...................................................................................................................................... 39 Market Forecasts.......................................................................................................................... 39 4.1 Forecast Methodology........................................................................................................... 39 4.2 Smart Meter Forecasts.......................................................................................................... 40 4.3 Smart Meter NAN Connectivity Forecasts ............................................................................ 42 4.4 Smart Meter WAN Connectivity Forecasts ........................................................................... 43 4.5 Smart Meter Cellular Connection Forecasts......................................................................... 43 4.6 Smart Meter Cellular Embedded Module Forecasts............................................................. 47 Section 5. ...................................................................................................................................... 52 Select Industry Players................................................................................................................ 52 5.1 Meter and Smart Metering Technology Vendors .................................................................. 52 5.1.1 CalAmp .............................................................................................................................. 52
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5.1.2 Echelon Corporation .......................................................................................................... 52 5.1.3 Eka Systems Inc ................................................................................................................ 52 5.1.4 Elster Integrated Solutions................................................................................................. 53 5.1.5 ESCO Technologies Inc..................................................................................................... 53 5.1.6 GE Energy.......................................................................................................................... 54 5.1.7 Grid Net.............................................................................................................................. 54 5.1.8 GridPoint ............................................................................................................................ 54 5.1.9 Holley Metering Ltd ............................................................................................................ 54 5.1.10 Itron Inc ............................................................................................................................ 55 5.1.11 Landis+Gyr....................................................................................................................... 55 5.1.12 Maestro Wireless Solutions (Fargo Telecom Group)....................................................... 55 5.1.13 Silver Spring Networks..................................................................................................... 56 5.1.14 SmartSynch...................................................................................................................... 56 5.1.15 Telenor Cinclus ................................................................................................................ 57 5.1.16 Trilliant Networks.............................................................................................................. 57 5.2 Connectivity Service Providers ............................................................................................. 57 5.2.1 Aeris Communications ....................................................................................................... 57 5.2.2 AT&T Corporation .............................................................................................................. 58 5.2.3 CrossBridge Solutions ....................................................................................................... 59 5.2.4 Jasper Wireless.................................................................................................................. 59 5.2.5 KORE Telematics............................................................................................................... 59 5.2.6 Mach Communications ...................................................................................................... 60 5.2.7 NTT DoCoMo ..................................................................................................................... 60 5.2.8 Numerex Corporation......................................................................................................... 60 5.2.9 Orange Business Services................................................................................................. 61 5.2.10 Rogers Communications Inc............................................................................................ 61 5.2.11 Sprint................................................................................................................................ 62 5.2.12 Swisscom ......................................................................................................................... 62 5.2.13 Telefonica O2................................................................................................................... 63 5.2.14 Telenor Group .................................................................................................................. 63 5.2.15 TELUS.............................................................................................................................. 64 5.2.16 Verizon Wireless .............................................................................................................. 64 5.2.17 T-Mobile USA................................................................................................................... 65 5.2.18 Vodafone Group Public Ltd Co ........................................................................................ 65 5.2.19 Wyless PLC...................................................................................................................... 66 5.3 Module Vendors .................................................................................................................... 66 5.3.1 AnyDATA ........................................................................................................................... 66 5.3.2 Cinterion Wireless Modules ............................................................................................... 66 5.3.3 Enfora................................................................................................................................. 67 5.3.4 Huawei Technologies Co Ltd ............................................................................................. 67 5.3.5 iWOW Technology ............................................................................................................. 68 5.3.6 Motorola M2M Wireless Modules....................................................................................... 68 5.3.7 Sierra Wireless................................................................................................................... 69 5.3.8 SIMCom Wireless Solutions .............................................................................................. 69 5.3.9 Telit Communications ........................................................................................................ 70 5.4 Other Key Smart Metering Players ....................................................................................... 70 5.4.1 4Home Inc.......................................................................................................................... 70 5.4.2 AlertMe............................................................................................................................... 71 5.4.3 Ambient Devices ................................................................................................................ 71 5.4.4 Arcadian Networks Inc ....................................................................................................... 72 5.4.5 Blue Line Innovations Inc................................................................................................... 72 5.4.6 Control4.............................................................................................................................. 72 5.4.7 Current Cost....................................................................................................................... 73
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5.4.8 Coronis Systems, an Elster Group Company .................................................................... 73 5.4.9 CURRENT Group............................................................................................................... 73 5.4.10 ecobee Inc........................................................................................................................ 74 5.4.11 Ember Corporation........................................................................................................... 74 5.4.12 eMeter Inc ........................................................................................................................ 75 5.4.13 Energate Inc..................................................................................................................... 75 5.4.14 EnergyHub Inc ................................................................................................................. 75 5.4.15 EnerNOC Inc.................................................................................................................... 76 5.4.16 EnOcean Alliance............................................................................................................. 76 5.4.17 Exceptional Innovation LLC ............................................................................................. 76 5.4.18 Freescale Semiconductor ................................................................................................ 77 5.4.19 Google.............................................................................................................................. 77 5.4.20 GreenWare....................................................................................................................... 77 5.4.21 GridWise Alliance Inc ....................................................................................................... 78 5.4.22 HomePlug Powerline Alliance.......................................................................................... 78 5.4.23 iControl Networks Inc ....................................................................................................... 78 5.4.24 Intamac Systems.............................................................................................................. 79 5.4.25 Lagotek Corporation ........................................................................................................ 79 5.4.26 Microsoft Corporation....................................................................................................... 79 5.4.27 OpenPeak Inc .................................................................................................................. 80 5.4.28 Pacific Gas and Electric Company................................................................................... 80 5.4.29 Portus Singapore Pte Ltd................................................................................................. 81 5.4.30 PowerHouse Dynamics llc ............................................................................................... 81 5.4.31 RWE AG........................................................................................................................... 81 5.4.32 Sequentric Energy Systems LLC ..................................................................................... 81 5.4.33 Tendril Networks .............................................................................................................. 82 5.4.34 uControl Inc...................................................................................................................... 82 5.4.35 Xanboo Inc ....................................................................................................................... 82 5.4.36 ZigBee Alliance ................................................................................................................ 83 5.4.37 Z-Wave Alliance ............................................................................................................... 83 Section 6. ...................................................................................................................................... 84 Company Directory ...................................................................................................................... 84 Section 7. ...................................................................................................................................... 87 Acronyms...................................................................................................................................... 87 Scope of Study ........................................................................................................................... 101 Sources and Methodology ........................................................................................................ 101 Notes ........................................................................................................................................... 102
Please be aware that an Excel worksheet containing all market forecasts accompanies this document. When downloading this report as a PDF from the ABI Research web site, please check to see if the Excel worksheet is also available for download. If you have any questions regarding this, please contact our client relations department. TABLES Table 1-1. Total Utility Meter Market by Meter Type with Smart Meter Penetration, World Market, Forecast: 2007 to 2015 Table 1-2. Utility Meter Market by Meter Type with Smart Meter Penetration, North America, Forecast: 2007 to 2015
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Table 1-3. Utility Meter Market by Meter Type with Smart Meter Penetration, Europe, Forecast: 2007 to 2015 Table 1-4. Utility Meter Market by Meter Type with Smart Meter Penetration, Asia-Pacific, Forecast: 2007 to 2015 Table 1-5. Utility Meter Market by Meter Type with Smart Meter Penetration, Latin America, Forecast: 2007 to 2015 Table 1-6. Utility Meter Market by Meter Type with Smart Meter Penetration, Middle East & Africa, Forecast: 2007 to 2015 Table 1-7. Total Smart Meter Communication Technology Cumulative Shipments by Technology Type, World Market, Forecast: 2007 to 2015 Table 1-8. Smart Meter Communication Technology Cumulative Shipments by Technology Type, North America, Forecast: 2007 to 2015 Table 1-9. Smart Meter Communication Technology Cumulative Shipments by Technology Type, Europe, Forecast: 2007 to 2015 Table 1-10. Smart Meter Communication Technology Cumulative Shipments by Technology Type, Asia-Pacific, Forecast: 2007 to 2015 Table 1-11. Smart Meter Communication Technology Cumulative Shipments by Technology Type, Latin America, Forecast: 2007 to 2015 Table 1-12. Smart Meter Communication Technology Cumulative Shipments by Technology Type, Middle East & Africa, Forecast: 2007 to 2015 Table 1-13. Total Smart Meter Concentrator Communication Technology Cumulative Shipments by Technology Type, World Market, Forecast: 2007 to 2015 Table 1-14. Smart Meter Concentrator Communication Technology Cumulative Shipments by Technology Type, North America, Forecast: 2007 to 2015 Table 1-15. Smart Meter Concentrator Communication Technology Cumulative Shipments by Technology Type, Europe, Forecast: 2007 to 2015 Table 1-16. Smart Meter Concentrator Communication Technology Cumulative Shipments by Technology Type, Asia-Pacific, Forecast: 2007 to 2015 Table 1-17. Smart Meter Concentrator Communication Technology Cumulative Shipments by Technology Type, Latin America, Forecast: 2007 to 2015 Table 1-18. Smart Meter Concentrator Communication Technology Cumulative Shipments by Technology Type, Middle East & Africa, Forecast: 2007 to 2015 Table 2-1. Total Smart Meter Cellular Connections by Air Standard, World Market, Forecast: 2007 to 2015
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Table 2-2. Total Smart Meter Cellular Connectivity Revenue by Air Standard, World Market, Forecast: 2007 to 2015 Table 2-3. Total Smart Meter Cellular Connections by Region, World Market, Forecast: 2007 to 2015 Table 2-4. Total Smart Meter Cellular Connectivity Revenue by Region, World Market, Forecast: 2007 to 2015 Table 2-5. Smart Meter Cellular Connections by Air Standard, North America, Forecast: 2007 to 2015 Table 2-6. Smart Meter Cellular Connectivity Revenue by Air Standard, North America, Forecast: 2007 to 2015 Table 2-7. Smart Meter Cellular Connections by Air Standard, Europe, Forecast: 2007 to 2015 Table 2-8. Smart Meter Cellular Connectivity Revenue by Air Standard, Europe, Forecast: 2007 to 2015 Table 2-9. Smart Meter Cellular Connections by Air Standard, Asia-Pacific, Forecast: 2007 to 2015 Table 2-10. Smart Meter Cellular Connectivity Revenue by Air Standard, Asia-Pacific, Forecast: 2007 to 2015 Table 2-11. Smart Meter Cellular Connections by Air Standard, Latin America, Forecast: 2007 to 2015 Table 2-12. Smart Meter Cellular Connectivity Revenue by Air Standard, Latin America, Forecast: 2007 to 2015 Table 2-13. Smart Meter Cellular Connections by Air Standard, Middle East & Africa, Forecast: 2007 to 2015 Table 2-14. Smart Meter Cellular Connectivity Revenue by Air Standard, Middle East & Africa, Forecast: 2007 to 2015 Table 3-1. Total Smart Meter Cellular Module Shipments by Air Standard, World Market, Forecast: 2007 to 2015 Table 3-2. Total Smart Meter Cellular Module Revenue by Air Standard, World Market, Forecast: 2007 to 2015 Table 3-3. Total Smart Meter Cellular Module Shipments by Region, World Market, Forecast: 2007 to 2015 Table 3-4. Total Smart Meter Cellular Module Revenue by Region, World Market, Forecast: 2007 to 2015 Table 3-5. Smart Meter Cellular Module Shipments by Air Standard, North America, Forecast: 2007 to 2015
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Table 3-6. Smart Meter Cellular Module Revenue by Air Standard, North America, Forecast: 2007 to 2015 Table 3-7. Smart Meter Cellular Module Shipments by Air Standard, Europe, Forecast: 2007 to 2015 Table 3-8. Smart Meter Cellular Module Revenue by Air Standard, Europe, Forecast: 2007 to 2015 Table 3-9. Smart Meter Cellular Module Shipments by Air Standard, Asia-Pacific, Forecast: 2007 to 2015 Table 3-10. Smart Meter Cellular Module Revenue by Air Standard, Asia-Pacific, Forecast: 2007 to 2015 Table 3-11. Smart Meter Cellular Module Shipments by Air Standard, Latin America, Forecast: 2007 to 2015 Table 3-12. Smart Meter Cellular Module Revenue by Air Standard, Latin America, Forecast: 2007 to 2015 Table 3-13. Smart Meter Cellular Module Shipments by Air Standard, Middle East & Africa, Forecast: 2007 to 2015 Table 3-14. Smart Meter Cellular Module Revenue by Air Standard, Middle East & Africa, Forecast: 2007 to 2015
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SCOPE OF STUDY
Massive regulatory effort and business investment is currently underway around the world to upgrade various countries electrical grids with significant new capabilities, specifically in the areas of increased network communications, remote and automated management of network elements in the field, and new power management functionality (distributed generation and power storage, including support for Plug-In Hybrid Electric Vehicles (PHEVs)). A key aspect to this upgrade to a smart grid is the deployment of millions of new smart meters by utilities around the globe, but particularly in North America, Europe, and certain countries in the Asia-Pacific region, most notably Australia. It is important to keep in mind, though, that Distribution Automation (DA), and Home Area Networking/Demand Response (HAN/DR) are also key aspects of the evolving smart grid. This study examines the market for smart grid technology with a strong focus on the deployment of smart electricity meters and the various technological and topological choices to connect these meters to the utilities head-end systems. The key market adoption drivers and challenges are discussed, value chain and competitive landscape issues are analyzed, regional trends are outlined, and there is a particular focus on the key regulatory and legislative activity occurring in support of smart grid development. In addition, the standards and technology associated with the smart grid are extensively examined. Highly granular five-year forecasts are provided for both smart metering as well as the communication technology options used to connect smart meters. Finally, profiles are provided for a wide range of select players in the smart grid value chain. ABI Research estimates that the total installed base of smart electricity meters, capable of two-way communications, will rise from roughly 76 million in 2009 to approximately 212 million by 2015.
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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NOTES
CAGR refers to compound average annual growth rate, using the formula: CAGR = (End Year Value Start Year Value)(1/steps) 1. CAGRs presented in the tables are for the entire time frame in the title. Where data for fewer years are given, the CAGR is for the range presented. Where relevant, CAGRs for shorter time frames may be given as well. Figures are based on the best estimates available at the time of calculation. Annual revenues, shipments, and sales are based on end-of-year figures unless otherwise noted. All values are expressed in year 2009 US dollars unless otherwise noted. Percentages may not add up to 100 due to rounding.
2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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2010 ABI Research abiresearch.com The material contained herein is for the individual use of the purchasing Licensee and may not be distributed to any other person or entity by such Licensee including, without limitation, to persons within the same corporate or other entity as such Licensee, without the express written permission of Licensor.
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