According to Berg Insight, a market researcher in the telecommunications field, the number of cellular M2M connections in the retail industry surpassed 18 million worldwide in 2013. That includes POS terminals, ATMs and vending machines located where fixed line connections are unavailable or impractical.
While POS terminals account for almost 90% of the cellular M2M device market right now, vending machines, according to Berg Insight, represent "the largest untapped market for wireless M2M in the retail industry."
For those not familiar with M2M, it stands for machine-to-machine, and it refers to the use of cellular data cards or embedded cellular gateways to connect machines to a host network.
It's sort of like giving a machine a cellphone to "phone home." That connection enables processing transactions for machines that accept credit cards, sending inventory details so the owner knows when the machine needs to be refilled, allowing remote access to adjust pricing, or even running remote diagnostics in the case of a malfunctioning machine.
According to Berg Insight, only 7.4% of the 6 million vending machines in North America are currently connected. However, that number is expected to almost triple to 1.14 million by 2018, and will continue to increase.
Of course, one factor that limits the effectiveness of any M2M-enabled machine is one we can all relate to: cell reception. Despite what the network carriers tell us, strong cell reception is never a given, especially inside buildings where many vending machines are located.
"Vending machines are commonly located in areas where cell service is marginal," said Matt Bauman, business development manager for 3Gstore.com, a provider of connectivity solutions. "Sometimes the machines can be relocated, but often times they cannot."
There are many things that can impact cell reception. Proximity to a cell tower is the one people think of most often. But there are other factors, too, such as the steel and concrete used in constructing the building. These materials tend to be an effective barrier to cell signals, which is why in many metro areas you can look out your window and see a cell tower but still have no coverage inside the building.
This is particularly true in buildings that are now being built or retrofitted to be LEED certified. LEED, which stands for Leadership in Energy and Environmental Design, is a green building certification program that recognizes best-in-class building strategies and practices. Many of the materials being used to increase or ensure the energy efficiency of buildings, such as window films, only serve to make reception even worse.
Fortunately, vending machines can easily be outfitted with devices that solve the connection problem: cellular signal boosters.
Boosters work by capturing any existing signal, even a weak one, and boosting it so the machine can "hear" the incoming signal. They also then boost the outgoing signal so it has the power to reach back to the cell tower. So in situations where cell reception is poor or inconsistent, boosters become the logical solution.
"Anytime you're dealing with a vending system or M2M application, chances are you're eventually going to deal with signal-related issues," said Bauman. "Vending companies normally deal with hundreds, if not thousands, of site locations where equipment will be deployed. And it's unlikely you'll get adequate service at each and every location without some type of amplification. We routinely rely on boosters because they significantly increase the placement opportunities for our clients."
Boosters make sense for another reason, as well, said Bauman. Because vending companies often contract with one specific carrier to get special rates, installing a booster is easier and more cost efficient than negotiating a separate set of rates for lines from other carriers.
M2M boosters work for all carriers on the 2G and 3G frequencies, so there are no compatibility issues with which to be concerned. And for instances where 4G is needed, there are carrier-specific models available.
The vending business is just like any business today in that it is increasingly reliant on technology to remain efficient and competitive. And as vending machines have become more intelligent, cell signal boosters are proving to be an effective solution for keeping their lines of communication open and operational.
CURTIS BURKHART is director of sales and marketing for Fremont, CA-based SureCall, a maker of cellular signal boosters for use in machines, homes, vehicles and office buildings.
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NEED A BOOST? SureCall M2M booster pictured here is connected to an embedded cellular gateway and antenna that captures the incoming signal (downlink) and broadcasts the outgoing signal, or uplink, back to the cell tower.