Growth in M2M embedded module market disappoints industry

M2M embedded module market’s performance was less than anticipated for 2011,
with the module industry as a whole earning only about $500 million in the
first half of the year. This less than stellar revenue is largely due to an
increase in the speed of ASP decline in the industry.

market consolidation is primarily occurring due to a number of factors
revolving around steep price reductions and the resulting challenge in deriving
revenue from pure module sales.

module pricing, particularly for WCDMA and CDMA EV-DO, fell sharply, with WCDMA
declining 46 percent and CDMA EV-DO declining 26 percent,” said Sam Lucero,
practice director, M2M connectivity.

principal causes for decline are the increased competition from Chinese module
vendors and new programs from certain mobile operators to supply customers with
very cost-optimized 3G modules, such as AT&T’s -3G Connect’ program,”
Lucero added.

string of mergers and acquisitions has also taken the M2M embedded module
market by storm, with the most recent being u-blox’s acquisition of Fusion
Wireless. This acquisition brings together Thalwil, Switzerland-based u-blox’s
GSM-family module business with Fusion Wireless’ CDMA-family module offerings.

recent mergers and acquisitions over the past few years include Sierra Wireless
acquiring Wavecom in 2009, Gemalto’s acquisition of Cinterion Wireless Modules
in June 2010, and Enfora obtaining Novatel Wireless in November 2010.

By Team
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