Sierra Wireless moves to M2M with Wavecom buy

M2M, particularly wireless, is a growth sector as carriers and manufacturers seek to embed connectivity in an array of consumer electronics. In the manufacturing process, the return on investments begins to decline after a certain number of sensors are added to the business automation process. With wireless, the often high cost of running a wire to a sensor and back to the control or automation equipment goes away entirely.

“That suddenly gives you a significant change in the [return on investment],” Miklovic said. “You can add two, three, four sensors to get more information and exercise better control of your process at a more affordable rate. The companies in the manufacturing space that make pressure sensors, temperature or flow meters, are going completely insane about wireless because they look at it as a way to double, triple, even quadruple their business in the next three or four years because they give that additional information. As the economy tightens, the price is going to be the point [on which] you can differentiate your product, as well as the quality and speed of response.”

According to Sierra, the M2M and mobile computing markets are expected to grow to more than 200 million units by 2012, and this acquisition will put it at the forefront of the growth. Post-merger, its wireless data product portfolio will include PC adapters, 2G, 3G and multi-mode embedded modules, M2M terminals and software. Through Wavecom, Sierra will also have expanded reach into the European and Asian marketplaces. Sierra’s data card business won’t disappear entirely, either, even as its growth rate is slowing, Miklovic added. Machines are an important aspect of information-gathering, but a place for people will remain. Mobile-enabled workers will still need access to all information to make informed decisions, he said. Through the acquisition, Sierra will now have both.

“Given the reaction to the Gemalto offer, the fact that they went out and found a white knight was not unexpected,” Miklovic said. “It should work out from a geography and technology perspective.”