Why u-blox Has Exited the Cellular Module Market and What It Means for Other Vendors

In January 2025, u-blox made the surprise announcement that it was to phase out its Cellular business. This constitutes u-blox’s UBX-R52 series of LTE-M and Narrowband-Internet of Things (NB-IoT) chipsets, plus its portfolio of Low-Power Wide Area (LPWA), and Long Term Evolution (LTE) Cat-1 and Cat-4 cellular modules. u-blox has been a stalwart of the cellular IoT module market since entering it in 2009 with its acquisitions of Italian 2G and 3G device reference design firm NeonSeven for US$12 million. At that time, NeonSeven had annual revenue of just US$ 5.9 million (€4.4 million), Intellectual Property (IP) that u-blox transformed into a cellular module line of business that it grew to a high-water mark value of over US$200 million in 2022.

NeonSeven’s focal markets of consumer, automotive, and industrial device Original Equipment Manufacturers (OEMs) laid the foundations for a path that u-blox has followed until this day, with the bulk of the cellular modules it manufactures having been consistently sold into the wearables, fleet management, and Industrial IoT (IIoT) markets. u-blox made a prescient decision in the wake of Sierra Wireless (now Semtech) acquiring Wavecom, and Cinterion Wireless Modules being spun out from Siemens in a management buyout, to become part of the original core of cellular IoT module vendors, alongside Telit. Between the four of them, they pioneered the US$5.6 billion market that exists today.

The company announced that it “has concluded that phasing out the Cellular business is the most viable course of action to ensure the company’s long-term strategic focus and operational efficiency,” specifically so that u-blox can “continue to improve the performance of its Short-Range business, which comprises Wi-Fi and Bluetooth modules.” Chief Executive Officer (CEO) Stephan Zizala then summarized that “Our efforts to find a viable path forward for the Cellular business did not pan out, including exploring a potential sale, leading us to the decision to phase out this business.” This would begin immediately with the goal of completion during 2025.

u-blox’s cellular module business has faced three challenges: 1) price pressure, 2) customers overordering, and 3) a limited effective customer base. The same issues exist for all cellular IoT module vendors. But smaller vendors, which have other lines of business that cannot afford to be held back, while waiting/hoping for the cellular market to rebalance, have to make a decision about what to continue to support and what to let go of.

1. u-blox’s cellular products are focused on the lower-throughput Cat-1 and LPWA (Cat-M and NB-IoT) markets. Cat-1 and LPWA face huge price competition from Chinese vendors, making the profit margins slim. Cat-1 has been boosted in relevance by Cat-1bis, but has taken a huge hit in value. Cat-1bis modules are half the price of Cat-1, so one needs to sell twice as many just to keep the same turnover, albeit with less profit. Investment in Cat-1bis is a necessary evil to achieve market position in anticipation of eRedCap. But for u-blox, the eRedCap opportunity is too far off to make staying in cellular worthwhile.
2. In the face of the chipset crisis of the last few years, and in the wake of the need to shore up supply chains post COVID-19, cellular module customers overordered in 2021 and 2022. Those customers are still working their way through their stocks of module inventory, causing a decline in sales for vendors in the years since, especially during 2024. That initial spike created a dip that we have yet to come out of. And for some vendors that do not have higher-value automotive or Mobile Broadband (MBB) markets to tide them over, it is just not practicable to wait any longer.
3. Lastly, cellular IoT module vendors are largely competing for business from the same pool of device OEM customers. And most vendors owe the majority of their module sales to relatively few customers. In 2023, multi-billion dollar market leader Quectel’s top five customers accounted for 22% of its annual sales, and for smaller vendors, that percentage is often much higher. A dip in demand, the loss of a customer to a competitor, or a customer exiting the market even temporarily can cause catastrophic instability and loss of revenue for a vendor.

u-blox has made some huge statements in cellular. u-blox developed its own LPWA chipset to own all of the value obtainable from that market by minimizing payouts to suppliers. But chipset development is expensive, and the cellular LPWA market did not take off as hoped, especially with regard to NB-IoT outside of China. u-blox was also one of the first cellular module vendors to experience legitimate success with Cat-M, especially in North America, beating out most of its competition in 2022, despite the company’s smaller size. u-blox’s cellular products are highly regarded by its customers, and any wind down of its cellular business is in no way due to an uncompetitive or inferior product. For some folks, the economics of the market just don’t make sense anymore.

But what does it mean for the other Western cellular vendors experiencing the same macro challenges? Like u-blox, Semtech and Telit Cinterion have other lines of business. Telit is a Mobile Virtual Network Operator (MVNO), with accompanying connectivity and subscription management (Embedded Subscriber Identity Module (eSIM)) platforms, and licenses its longstanding and well-recognized deviceWISE and secureWISE device and security management platforms. Telit also has a line of Wi-Fi and Bluetooth® modules. While Semtech also sells routers and gateways, it is an MVNO, too, and licenses its full suite of AirVantage IoT management platforms. Additionally, Semtech owns the LoRa radio technology, selling a wide array of hardware developed from a series of diversified, strategic acquisitions.

With Semtech anticipated to have turnover close to US$1 billion for the 2024 to 2025 financial year, its brand has the stronger financial backing, supported by independently growing lines of business. Telit is in the more precarious situation, once public but now privately owned again, and purportedly seeking an Initial Public Offering (IPO). But a ray of light exists in the form of the last-minute acquisition of u-blox's cellular division by Trasna, in March 2025. The value of u-blox’s products, its proprietary IP, and most crucially, its existing device OEM customer base was too great to be lost. It takes time and effort to build a reputation, but Trasna can now take a shortcut by buying u-blox’s hard-won list of clients, who had been puzzling over whom to now go to, and where to find long-term product support. The same would surely be true for a brand as strong as Telit’s.