This represents a compound annual growth rate of 24 percent, which would yield a market size of $20 billion in 2009 and nearly $25 billion in 2010. This is a much more modest CAGR figure than that of 37.9 percent for the period 2008 to 2012, given by Berg Insights for connection growth (see below).

Strategy Analytics did not say whether its prediction represents the value of equipment, software or services, or some subset. Despite the strong long-term growth prospects Strategy Analytics said there are five barriers to growth in the global M2M market. These are:

Lack of a low cost local access media that can be implemented on a global basis;

The fragmented nature of both the technology vendors and the solutions they provide;

Lack of any single killer application that can consolidate the market and drive demand forward;

The complex nature of M2M solutions increases associated development and integration costs;

Managements inability to express the benefits of M2M in anything other than cost savings, rather than exploiting and encouraging the service enablement capacity of mobile M2M.

"Historically, the mobile M2M market has struggled due to complexity and fragmentation. Strategy Analytics believes that increasing consolidation, falling technology costs, lower network charges and regulatory compliance from 2010 onwards, represent significant opportunities for network operators and service providers," said Andrew Brown, director of wireless enterprise strategies at Strategy Analytics, in a statement.

"Several sectors will benefit from regulatory changes, with automotive and AMR [automatic meter reading] the clear winners. Home and office security also represent a major opportunity over the forecast period," added David Kerr, vice president of global wireless practice in the same statement.