Verizon Communications Friday agreed to acquire Hughes Telematics for $612 million.
Verizon said it plans to extend Hughes Telematics' wireless communications technology for vehicles and fleet management to the asset tracking, mobile health and home automation areas.
Hughes Telematics will operate as a subsidiary of Verizon and be run by its current Atlanta-based management team once the deal closes in the third quarter, the companies said in a statement.
The Hughes Telematics technology relies upon fast-growing machine-to-machine (M2M) wireless technology that can be used to monitor and control a variety of devices ranging from home thermostats to heart monitors.
John Stratton, president of Verizon Enterprise Solutions, said Verizon plans to combine its global IP network, cloud, mobility and security systems with Hughes wireless service delivery technology.
Hughes owns a majority stake in Lifecomm, also in Atlanta, which is developing a wearable device for one-touch access to emergency assistance.
Steve Hilton, an analyst at Analysis Mason, said Verizon's acquisition of Hughes "is exactly what a carrier should be doing to better position itself in the M2M sector."
Hughes has good M2M technology that is fairly comprehensive and integrates well with other technologies, Hilton said.
Also, he said, Hughes has extensive relationships with business customers that integrate and buy M2M products.
ABI Research has projected that M2M wireless connections will quadruple over the next six years, from 110 million in 2011 to 453 million in 2017. ABI expects the M2M market will be valued at $3.85 billion in 2017.
Several large wireless carriers, including AT&T, Vodafone and Telefonica, have built M2M software platforms for connecting devices wirelessly, while others are expected to ready-made platforms built by other third parties, ABI said.
Some M2M application developers will also offload core functions, such as data modeling, to third parties.
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed . His e-mail address is firstname.lastname@example.org.