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Switzerland's u-blox said it couldn't sell its cellular IoT business and so instead will shut it down. The development is the latest upheaval in the industry.
Switzerland's u-blox said it will exit the market for cellular IoT modules in the sector's latest shakeout.
In a release, u-blox said its cellular "phase out" will allow it to focus on its satellite location products for vehicles and other gadgets, as well as its Wi-Fi and Bluetooth module businesses.
"Our efforts to find a viable path forward for the cellular business did not pan out, including exploring a potential sale, leading us to the decision to phase out this business," said Stephan Zizala, CEO of u-blox, in a release.
U-blox’s cellular business comprises 200 employees. It generated revenues of $29.5 million on a $16.4 million loss in the first half of 2024.
U-blox said it expects a one-time $71 million impact from its cellular exit. The company said it continues to expect total fourth quarter revenues of between $65 million and $76 million.
U-blox's modules supported a wide range of cellular IoT standards including NB-IoT, LTE-M, LTE Cat 1, 3G and 2G, offering slow-speed connections to alarms, connected cars, utilities and other IoT devices.
The company is one of the smaller players in the cellular IoT module market, behind the likes of Quectel, Telit and Fibocom.
Another one bites the dust
U-blox's exit is the latest upheaval in a market of turmoil.
Counterpoint Research recently reported that the global cellular IoT module market suffered its first-ever annual decline in shipments in 2023.
That slowdown coincides with a spate of M&A across the sector. In recent years, Kore purchased Twilio's IoT business, Ericsson sold its IoT Accelerator and Connected Vehicle Cloud businesses to Aeris, Telit acquired Thales' cellular IoT business, and Semtech bought IoT vendor Sierra Wireless. Meanwhile, Japan's Renesas Electronics dropped its $249 million plan to acquire Sequans.
On the networking side, AT&T joined Docomo and Orange in announcing plans to decommission its NB-IoT network.
The reason for all this upheaval isn't complex: The cellular IoT market thrives on cheap modules and slow connections, making high-speed consolidation almost inevitable. Low-cost Chinese vendors are gobbling up market share in the IoT module space, while Chinese operators oversee most of the globe's cellular IoT connections.
But some still have hope for the sector on a global basis. For example, analyst Joe Madden of Mobile Experts continues to predict growth in cellular IoT device shipments, from around 500 million in 2024 to more than 4 billion in 2034. But he cautioned the industry to stop developing new IoT standards and stick with the existing ones it has.
Counterpoint has a similar outlook: The firm reported that global cellular IoT connections surged 24% in 2023 to surpass 3.3 billion, a figure it expects to grow to 6.2 billion by 2030. China, though, remained dominant with 70% of all connections in 2023.
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