World News: More deals to come after the sale of Siemens Wireless Modules

World News:  More deals to come after the sale of Siemens Wireless Modules

As the 160 year-old German engineering conglomerate realigns its corporate structure for a new century, one of the world's largest suppliers of cellular wireless M2M modules is transformed into an independent entity.

Unlike their former colleagues of the now dismantled Benq Siemens handset unit, the 400 employees will not have to fear for their jobs. The buyers are the T-Mobile Ventures Fund (managed by T-Ventures – the venture capital entity of Deutsche Telekom) and the German private equity firm Granville Baird.

They are taking over what is presumed to be a profitable company that ranks as one of the largest players in a fast-growing global market.

It remains to be seen whether T-Mobile will seek to leverage the closer relationship with Siemens Wireless Modules to build a position as an international provider of wireless M2M network services.

The sale of Siemens Wireless Modules is the latest in a series of mergers and acquisitions in the M2M module industry in recent years.

Nokia exited the M2M market in 2005, transferring the existing product range to the Finnish mobile data communication specialist, Aplicom.

Sony Ericsson followed suit in 2006 with the sale of its modules business to Wavecom.

Other handset manufacturers, such as Motorola, Sagem and Kyocera Wireless, however, still hang on to the M2M market segment. The chances are slim, though, that they will replicate the transformation of Telit, which went from largely being a handset manufacturer to becoming a global supplier of wireless M2M modules with the acquisition of Bellware in South Korea and the establishment of a North American office in 2006.

There are many reasons to believe that the Siemens Wireless Modules deal will not be the only one of its kind this year.

Rumours have circulated that Enfora was preparing for an IPO in the beginning of 2008. If the owners decide that the timing is not right in the midst of financial turmoil, other possible options would include a merger or acquisition with another industry player. A potential partner could be Motorola's M2M business, which would hardly be unaffected by an expected sale of the group's handset division. Motorola has a strong position as a supplier of wireless modules to the automotive telematics segmentm which is likely to attract suitors.

There are also new entrants coming from the mobile broadband market who see the obvious synergies between embedded HSPA modules for notebook PCs and wireless M2M devices.

Sierra Wireless and Novatel Wireless are two examples of companies developing products for mobile broadband and wireless M2M under the same roof. Both companies supply embedded wireless data devices to for instance PC manufacturers and may evolve into future contenders in the wireless M2M space as well.

Author: Tobias Ryberg – Berg Insight


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