SCOTTSDALE, AZ--(BUSINESS WIRE)--Wavecom, a leading M2M wireless module vendor, recently announced a partnership with M2M mobile operator Jasper Wireless to offer Wavecom's "StarService" on Jasper Wireless' global service platform. StarService, which enables customers to obtain the WM50 module from Wavecom for free with the remote device management service, is an interesting approach toward ameliorating the commoditization pressures facing the wireless module industry. These pressures include tightening gross margins in the short term, and anxiety over possible obsolescence of modules in the M2M value chain over the longer term, as wireless connectivity potentially becomes directly integrated into end-equipment.
ABI Research senior analyst Sam Lucero explains, "Commoditization pressure derives from several sources. First, many module customers appear to regard the wireless module as essentially a generic 'bit pipe.' They base purchase decisions largely on the price that module vendors are willing to offer. This price sensitivity is exacerbated by the fact that the end-equipment in many M2M applications is itself relatively low-priced, and therefore requires the connectivity component to be as low-cost as possible to lessen impact on the module customers' own gross margins. This encourages module customers to negotiate hard for lower module pricing."
These pressures and market trends are discussed in detail within ABI Research's recent study, The Cellular M2M Module Market.
Lucero continues, "The threat to wireless module vendors is two-fold. On the one hand, they could be displaced in the value chain by baseband IC vendors directly entering the cellular M2M market, or by downstream value chain participants—an OEM or solution provider, for example—reaching up past the module vendor to work directly with a semiconductor supplier. On the other hand, the threat of obsolescence will continue to place tremendous strain on wireless module vendors' gross margins."
The Cellular M2M Module Market
The study discusses market forces, analyzes cellular M2M module vendor strategic responses, provides vendor market share data, and forecasts cellular M2M module shipment and revenue growth for the period 2006 through 2012, segmented by region, application, and air interface standard. It forms part of three ABI Research Services: M2M Research Service, Mobile Devices Research Service, and Mobile Operators Research Service, which include research reports, research briefs, market data, online databases, ABI vendor matrices, ABI insights, and analyst inquiry support.
Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in broadband and multimedia, RFID & contactless, M2M, wireless connectivity, mobile wireless, transportation, and emerging technologies. For information visit ABI's Web site or call 1-516-624-2500.