The 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.
“3G module pricing, particularly for WCDMA and CDMA EV-DO, fell sharply, with WCDMA declining 46% and CDMA EV-DO declining 26%,” says Sam Lucero, practice director, M2M connectivity. "Other 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.”
A 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. Other 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 Novatel Wireless obtaining Enfora in November 2010.
This 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. “The widespread perception among module customers that modules are commoditized, interchangeable parts, and the threat of dis-intermediation by chipset vendors as devices using embedded modules reach large shipment volumes and application developers seek to reduce variable expenses, are two of the primary forces driving market consolidation,” says Lucero.
ABI Research’s new market data, “M2M Market Data,” tracks the M2M market on the basis of wireless WAN embedded modules and product revenue, as well as wireless WAN active nodes and service revenue. Shipments, connections, and revenue are segmented on the basis of region, application, and air interface standard. Furthermore, M2M embedded module vendor annual market shares, for the calendar year prior to that in which the forecast database is published, are provided on a total unit shipment basis.
It is part of ABI Research’s M2M Research Service.
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