I was over at the M2M Alliance event in Dusseldorf on Wednesday. A great event (if a tiring day trip from London!). On the same day there was a very important, but not much heralded, announcement that Huawei was launching its M2M business in Europe. More details here. While, of course, Huawei modules have been finding their way into "M2M" devices for ages, this demonstrates a new intent from the manufacturer.
Of course what everyone fears is that Huawei (and ZTE) will completely dominate the M2M market in the same way that they did with the USB modem market, obliterating competition from the traditional vendors such as Option. That is certain the threat. However, neither of the Chinese players is in the same position to apply the same degree of scale to M2M as it has to mobile broadband. The M2M market is so fragmented and requirements so diverse that, to an extent, the benefits of scale will be somewhat hard to realise.
The traditional vendors (e.g. Cinterion, Sierra and Telit) have a role to play, but it is an inescapable fact that they will be challenged massively by Huawei on price. And let's not forget this is a market where ASPs are dropping already. How do they compete with Huawei? The simple answer is flexibility and customisation. The more complicated answer will wait for the upcoming reports that we at Machina Research are planning on the module market for October.
Of course what everyone fears is that Huawei (and ZTE) will completely dominate the M2M market in the same way that they did with the USB modem market, obliterating competition from the traditional vendors such as Option. That is certain the threat. However, neither of the Chinese players is in the same position to apply the same degree of scale to M2M as it has to mobile broadband. The M2M market is so fragmented and requirements so diverse that, to an extent, the benefits of scale will be somewhat hard to realise.
The traditional vendors (e.g. Cinterion, Sierra and Telit) have a role to play, but it is an inescapable fact that they will be challenged massively by Huawei on price. And let's not forget this is a market where ASPs are dropping already. How do they compete with Huawei? The simple answer is flexibility and customisation. The more complicated answer will wait for the upcoming reports that we at Machina Research are planning on the module market for October.
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