Siemens M2M buyout could spur market

12 Mar 2008

Siemens has sold off its Wireless Modules business unit in a deal that could broaden the M2M market while spurring more M&As.

Siemens sold the unit to an investment consortium called the 'Joint Operations for Mobile Applications' (JOMA) and consisting of Deutsche Telecom's T-Mobile Venture Fund, as well as two private investment firms, for an undisclosed amount.

ABI Research senior analyst Sam Lucero called the deal "timely", but cautioned the impact on the M2M unit itself was uncertain, as it would carry on without Siemens' supply-chain and logistic economies of scale and vast distribution reach.

On the other hand, he added, the unit would be more free to pursue a broader set of market applications, though linking up with a trad carrier like T-Mobile wasn't necessarily a plus.

Still, Lucero said, 'The tie-up with T-Mobile certainly gives it a path to product/solution differentiation and avoiding the commoditization that appears to be creeping into the overall wireless modules segment.'

"The wireless module market itself, while growing rapidly, is also an exceptionally challenging environment in which to operate," said Lucero.

If nothing else, though, the deal could further raise the issue of wireless module commoditization and spur further M&A activity in M2M this year, Lucero said.

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