Study: M2M vendors in ‘precarious position’

Machine-to-machine vendors face long- and short-term pressures that could affect their profitability, according to a new study from ABI Research.
“M2M module vendors are in a precarious position,” says ABI Research senior analyst Sam Lucero. “If their OEM customers bypass them to work directly with providers of cellular baseband ICs, who supply reference designs and related support, separate modules are no longer required and their reason for existing disappears.”
ABI noted that many application developers see M2M modules as commodities, Asia-Pacific vendors are driving prices down, and Qualcomm Inc. and NXP are already in the market with reference designs.
However, some of the same conditions that threaten M2M vendors could also help them, said ABI. The firm said most OEMs lack the radio design expertise to develop products without M2M vendors. In addition, the market is highly fragmented and characterized by complex applications. Those factors, said ABI, often make it easier for an application developer to purchase off-the-shelf modules than to hire radio design expertise, source chips directly and undergo certification alone.