Lots of updates in the M2M SDP world over the last couple of days. First up were a couple of announcements about CSPs signing deals with platform providers. Hong Kong CSL has done a deal with Jasper. Perhaps it was inevitable given that parent company Telstra is already a Jasper partner, but kudos to Jasper for expanding their footprint again. It's an important one this, as CSL is in an excellent position to help companies get into China. I was chatting with CSL's Stephen Tang at Mobile Asia Congress last month and it seems like CSL can really act as a bridgehead as they understand the territory and benefit from superior roaming rates in China.
Second piece of news is about Swisscom. There has been a something-and-nothing news story around in the last couple of days about how they're planning on doing more business in M2M. There are a few mildly interesting datapoints about how they've seen 10% growth in demand for M2M SIMs in Q4 2011 and how they're expecting 100 million machines connected over their cellular network in the long term. Machina Research estimates that there will be about 10 million cellular M2M devices in Switzerland by 2020, up from about 300,000 at the end of 2010 (Source: Machina Research's Connected Intelligence Forecast Database, 2011). What's interesting is that this "news" comes at a time when there actually is something interesting for Swisscom to announce: the selection of an M2M device connection platform. I won't spoil the surprise by telling you who. I guess they weren't quite ready to make the announcement and had time booked with journos so they filled it. Anyway, the thing that wasn't reported is good news for the platform provider.
The other platform-type news was that Gemalto has agreed to acquire stricken SDP SensorLogic. This is another example of integration in the M2M value chain, in this case vertical. By acquiring SensorLogic, Gemalto will bolster its SIM, device management and modules (Cinterion) capabilities with a service delivery platform. The traditional M2M module vendors are keen to do this in order to add value and compete with the mass market manufacturers from the far east. Sierra Wireless, for instance, very much positions itself as more than simply a module manufacturer.
Machina Research has been predicting some substantial consolidation in the M2M value chain for some time. There are just too many SDPs and a bit of rationalisation is a natural development, particularly as they start to become more horizontalised. There is also the added competitive threat to the module providers such as Sierra, Telit, SimCom and Cinterion from the far east. This should create an environment where we'll see even more consolidation. It was interesting to note that Ericsson announced it was quitting the modules market. Perhaps no big surprise as the natural role for Ericsson is to move up the value chain into professional services and IT, rather than try to compete in the more commoditised devices market.