Revenues generated by the sale of M2M modules failed to break the $1 billion mark last year, as the industry had hoped, but look set to exceed that figure in 2013, according to a new study from ABI Research.
The market-research company notes that 2G continues to be the dominant technology used in M2M modules, accounting for 70% of all shipments in 2012, which is partly responsible for the downward pressure on pricing.
“Cellular M2M module price competition was intense in 2012 driven by several factors,” said Dan Shey, a practice director at ABI Research.
“Europe was not the traditional M2M module bellwether market and continued to decline in share of module shipments; some Chinese vendors competed aggressively in the higher volume 2G led market segments; and operators pushed hard for lower module pricing to grow total cellular connections,” said Shey.
According to ABI Research, however, module vendors can insulate themselves from price-based competition if they target the right industry verticals and offer additional services.
Module pricing for the top vendors in the market ranged from $12 to $31 per unit, according to ABI Research.
Vendors reporting higher revenues have typically targeted application markets in need of 3G and 4G modules, such as fixed wireless teminals and OEM telematics.
They have also been addressing industry sectors where particular importance is attached module quality and additional services – such as product integration expertise and device management services.