Monday, November 16, 2009
Confronting the price war in the M2M market
Oct 29, 2009 (M2 PRESSWIRE via COMTEX) -- Telit Communications PLC (AIM: TCM), an international leader in machine-to-machine (M2M) communications, is concentrating on innovation and added value in the M2M market. Telit believes that maintaining high industrial standards is the only way for module manufacturers to meet complex customer requirements. In a discussion with analysis and consulting firm Beecham Research, which specialises in the M2M market, Oozi Cats, CEO of Telit Communications PLC, spoke of his company's pioneering role as an innovation leader in the M2M market in spite of the ever tougher price war.
Since 2008 the total volume of the M2M market has shrunk from EUR750 million to around EUR500 million. In some cases M2M modules have experienced price decreases of up to 30 per cent. According to Cats, this trend is a worrying one and, in the current economic crisis, sends out the wrong signals to the industry as a whole. In a video interview with Robin Duke-Woolley, CEO of Beecham Research, he explained why in the face of the economic crisis Telit has opted for a different approach by consistently focusing on innovation.
"Modules and applications aren't developed overnight; they usually need up to three years to be market-ready," says Cats. "Modules are currently being marketed at very low prices, which make it harder and harder for manufacturers to maintain their R&D activities at a consistently necessary high level." This, he believes, makes it all the more important in the current climate for customers to be able to count on long-term development partnerships with their module providers and high product quality.
Long-term investment the key to growth Telit is the only major M2M company to have bucked the trend and grown by around 20 per cent in each of the last two years, and also significantly increased module sales in the first six months of 2009. It is also the only M2M company anywhere in the world to offer wireless M2M modules for both cellular and short-range technologies. At Telit, R&D is given top priority. As a technical innovation leader the company invests massively in research and development capacities, and its global workforce of 350 includes 260 engineers working at its four R&D centres in Trieste, Sardinia, Seouland Sophia Antipolis.
Telit is currently involved in over 2,000 new product design processes. "Naturally that ties up significant R&D resources, because our development engineers collaborate intensively with customers over a long period to develop new M2M applications," explains Cats. "But it also highlights the necessity of investing in long-term research and development, especially in the current economic environment. Failing to do this would be throwing away growth opportunities as soon as the market recovers again." Watch the full discussion between industry experts Oozi Cats and Robin Duke-Woolley (CEO, Beecham Research) at www.telit.com.
Telit Wireless Solutions is an internationally leading specialist in wireless machine-to-machine (M2M) technology. Telit is the only company worldwide to offer communications modules for all of the various wireless technologies: it develops, produces and markets modules for GSM/GPRS, UMTS/WEDGE/HSDPA, CDMA/EVDO and Short-Range RF applications. M2M applications rationalise business processes by enabling machines, equipment and vehicles to communicate with each other via mobile networks.
Telit products are used all over the world and marketed via Telit's offices in Brazil, China, Denmark, France, Germany, Israel, Italy, Korea, Spain, the Republic of South Africa, Taiwan, Turkey, the UK and the USA. Telit's global distributor network comprises specialists in wireless technologies and enhances the customer experience in over 56 countries worldwide. Telit Communications PLC is listed on AIM (ticker: TCM).
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