CTIA Report: Most M2M Module Vendors Resisting Standardization

In February at Mobile World Congress the GSMA announced “guidelines” for embedded cellular module form factors tailored to specific vertical markets, such as connected consumer electronics, healthcare, and automotive.The hope is that this will drive down module integrations costs and speed time to market for device makers and application providers.However, the entire effort may be DOA (dead on arrival).ABI Research canvassed the various module vendors at the Spring 2010 CTIA show in Las Vegas (in addition to separate, phone-based interviews), and we have yet to find a single module vendor supportive of the idea of a “standard” module.There may be one (or two) out there; but it’s clear the vendors as a whole are not welcoming the development of standards with open arms.

So, why the reticence? On the side of self-interest, module vendors are simply not interested in participating in any efforts to further commoditize their industry.The module segment of the cellular M2M market has faced ongoing and increasing commoditization pressure throughout its history, and the entrance of APAC vendors such as Huawei and ZTE, joining SIMcom, only adds to the challenge for European and North American players such as Cinterion and Sierra Wireless.Customization means differentiation, and differentiation is one defense against commoditization.

However, there is more than just self-interest: the vendors also point to the variegated and complex needs of their M2M OEM customers.Modules are tailored and fine-tuned for specific features and functionality, and the GSMA’s vertical market orientation of their “guidelines” notwithstanding, there’s a strong belief that no “standard” module is going to be optimal for all customers in a given market or class of devices.

Will we eventually see modules marketed as “GSMA xx Standard Compliant” (or some variation thereof)? Our bet is, no.