Convention portends the future of wireless connectivity

That's not expensive in the context of some big-ticket items, like cars, which have been forerunners when it comes to nonphone wireless connections. General Motors Corp. started equipping cars with OnStar wireless calling and assistance services in the mid-90s. At the show, it announced it is updating the service for faster data connections, enabling services like remote engine diagnostics and upgrades to the control software. AT&T Inc., which has been aggressive about getting into the M2M business, is ousting Verizon Wireless as the network provider for OnStar.

Colao, the CEO of Vodafone, gave an example of another "smart" car application that might seem intrusive to some: The company has been trying out a service in Italy that lets an auto insurance company know how much a car is being used, and charges premiums accordingly. It can also score the driver based on his or her driving style, and give pointers on how to handle the car more safely.

The real money maker?

Once devices are connected, the next problem is getting them to talk to each other, and making sense of what they're saying. ABI's Shey says this is the real business opportunity in M2M, more valuable than making the modems or providing the wireless connections. He believes that's driving a behind-the-scenes scramble of deal-making at the show, as companies like AT&T seek to bolster their ability to support M2M by acquiring companies that provide a "middle layer" of software between the devices and their owners.