Western companies levelling the playing field with more consolidation against dominant Chinese players
Telit has recently announced to acquire Thales IoT portfolio of cellular wireless modules, gateways, and data cards (modems) – ranging from NB-IoT, LTE-M to 5G. The new entity will be rebranded as Telit Cinterion focussing on IIoT with security as its core proposition (with Thales/Gemalto’s strong expertise in security and identity management). Telit has decided to spun-off its Automotive IoT division to become a separate business than Telit Cinterion.
Consolidation is not new to the IoT module market and is an ongoing phenomenon especially due to growing demand of secure IoT module solutions and cellular connectivity. Some of the notable cellular IoT technologies proliferating the space and seeing significant adoption are – LPWA (LTE-M, NB-IoT), LTE Cat 1, LTE Cat 1 bis to 5G and upcoming 5G Redcap.
The Chinese vendors like Quectel (SIMCom+LongSung), Fibocom, Sunsea AIoT are dominating the IoT module market with Quectel leading the market with most shipments across the globe. Some of the significant Western counterparts, including Sierra Wireless, Telit Communications, Thales and U-Blox, are giving some good competition to unbeatable Chinese vendors.
Strategy Analytics is tracking the IoT modules and gateways market since the M2M era and frequently reporting market shares and consolidation of different vendors in the IoT module landscape. Let us look back at some of the major mergers and acquisitions (M&As), in this space which has shaped the IoT module market as of today.
Note: This is a selected list of M&As in IoT module market consolidation; there are lot more not listed here
Some other notable M&As in the IoT Module sector:
- Wavecom was acquired by Sierra Wireless in March 2009
- Gemalto acquired Cinterion Wireless Modules in June 2010
- Telit acquired Motorola M2M modules business in January 2011
- Sierra Wireless acquired Sagemcom in August 2012
- Telit acquired NXP ATOP Business in December 2013
- Huawei acquired Neul for LPWA technology in September 2014
- Sierra Wireless acquired Accel Networks in June 2015
One of the significant M&A which has changed the overall IoT module market should be highlighted here – it happened in 2017 when Sunsea AIoT acquired SIMCom and LongSung Tech, which helped Sunsea AIoT capturing the 2nd biggest vendor spot in the Global IoT module market by volume (after integration of SIMCom and LongSung Tech). Now the tables will be turned again in coming months and years.
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Year
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Top 3 Vendors
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Market Share (%)
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2017
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43%
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2020
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61%
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Source: Strategy Analytics IoT Strategies
Telit acquisition of Thales IoT Module BU will see a major shift in the market share dynamics in near future upon closing and ensuing integration periods. We at Strategy Analytics firmly believes that there is more consolidation to happen in next 6-12 months.
SA plans to publish this year update on IoT Module vendor market share in Q42022, where we would be including the impact of M&As in the overall IoT module market apart from the effect of Russian-Ukraine war and aftermath of Covid-19. More to come, watch this space.