Sierra Wireless Inc. (SWIR), a leading provider of embedded modules for mobile computing, is quickly expanding its related business vertical of industrial solutions or machine-to-machine (M2M) wireless communications services, a rapidly growing market opportunity. This new business model is emerging as a potential source of massive revenues to several wireless network operators and equipment manufacturers. According to various industry sources, globally M2M connections may exceed 200 million by 2014 with a total market valuation of approximately $57 billion.
Yesterday, Sierra entered into business collaboration with Atos Worldline, a division of Atos Origin, to provide M2M wireless solutions to the power, facilities management, retail, health, transport and manufacturing industry sectors. Atos Origin is a leading global IT services company. With this alliance, Atos and Sierra will integrate their respective M2M services platforms of Worldline M2M and M2MOperatingPortal to offer a single global product for the M2M market.
In September, Sierra signed an agreement with Orbcomm Inc. (ORBC), a leading provider of satellite messaging services, to form a joint venture to provide M2M solutions. This new venture will combine M2MOperatingPortal with ORBCOMM’s web services portal. ORBCOMM’s web services portal is expected to get underway commercially in the first quarter of 2010, and will provide comprehensive subscriber management functions with many innovative capabilities for device management.
Last July, T-Mobile, the mobile communications division of Deutsche Telekom AG (DT), and Sierra signed a Memorandum of Understanding to form a joint venture to provide M2M solutions across several market segments. T-Mobile is a leading worldwide wireless service provider with more than 148 million subscribers. This service will offer innovative solutions for the fleet, automotive, navigation, utility, and security markets.
The M2M wireless communications technology has become a major driving force for the next-generation mobile messaging system. In June 2009, Sierra acquired Wavecom S.A., a leading provider of embedded wireless technology for M2M communications. This acquisition has significantly diversified Sierra’s business verticals into the high-margin M2M segment. Wavecom has a dominant market share in the European and Asia-Pacific regions. The combined entity now offers the most comprehensive wireless data product portfolio that includes PC adapters, 2G & 3G embedded modules, M2M terminals, and related software. We believe the acquisition of Wavecom will become a major long-term catalyst for Sierra.
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