Some may think that a brand change could not have happened at a worse time in the context of the past year’s prevailing global economic conditions, but all signs show that, far from merely weathering the storm, Cinterion Wireless Modules has in fact grown from strength to strength. The company spun off from Siemens last summer after a leveraged buyout by the private equity investor Granville Baird and the T-Mobile Venture Fund. Now, Cinterion has announced that it maintained its worldwide leadership for cellular wireless modules with a market share of 33%, nearly twice as much of the pie as its nearest competitor, and achieved record-breaking sales of more than 200 million Euros.
Cinterion grew its presence to more than 20 countries worldwide and shipped more than 5,5 million modules in its first year in business. And these were not the only milestones the company achieved. It also earned and maintained an impressive 95 out of 100 point Dun and Bradstreet rating and achieved sales in excess of $100 million for the newly formed Cinterion Americas region. Ten new products were also launched to span a range of vertical industries and technologies.
“Ours has been an extremely successful transition to independence,” stated Norbert Muhrer, Cinterion’s CEO. “We built Cinterion as a lean, flexible company allowing a faster response to market needs and customer requirements. We have not only maintained our strong relationships with leading customers around the world, but we have expanded our penetration in new growth vertical markets including health care, environmental technology and the automotive industry. Our market strength and sustainable, cash positive business puts us in the leading position to continue gaining market share while driving M2M technology adoption to help a wide range of industries operate more efficiently.”
A local perspective
According to Brian Scott, who heads up Cinterion in South Africa, the brand change was an unequivocally positive move, and the unfortunate timing may in fact have been a blessing in disguise. This is because, as an independent, leaner and meaner enterprise than was the case under the giant Siemens umbrella, Cinterion is now in a better position to respond quickly to market conditions and adapt accordingly.
The past year certainly has not been a walk in the park though. “We have invested a lot of effort to assure the marketplace that although our name has changed, we are still the same company, with the same people, the same positive attitude, the same drive and energy, the same technology, the same intellectual property and the same products,” said Scott. “Being independent has forced us to watch the pennies more carefully and to become a leaner and more cost efficient operation. It has been a year of very hard work, but the positive results speak for themselves.”
Key to Cinterion’s success in the past year is that the company, globally and on every level, has made a conscious effort not to fall victim to a knee jerk reaction, but to focus on the long game, with the unwavering confidence that the company’s core philosophies of having the right people and the right products would see them through challenging times. In this way, Cinterion has stayed on track with the roadmap the company established for itself upon its split from Siemens, which has established a powerful springboard for the next 10 years of growth. This has been done by establishing and maintaining strong relationships with customers such as mobile network operators, finding out what their requirements are and what their future developments are, rather than just following the trends and buzz words of the day.
Cinterion is the biggest player in the global wireless M2M (machine to machine) market, with customers and applications in all of the significant market verticals, including metering, security, tracking and tracing, payment (point of sale), remote maintenance and control, automotive and electronic toll, wireless routers and gateways, industrial computing, health care and environmental monitoring.
Of course, given South Africa’s socio-economic climate, track and trace is a big market here, with some local companies being global leaders in these sectors. What would really spur the local market, according to Scott, is government legislation such as that introduced in other regions, such as the eCall initiative in Europe which aims to employ a hardware black box installed in vehicles that will wirelessly send airbag deployment and impact sensor information, as well as GPS coordinates to local emergency agencies in the event of an accident. Underlining its commitment to cover every potential market opportunity, Cinterion recently developed what are said to be the first eCall ready modules on the market. The local track and trace market, on the other hand, has been driven by insurance companies, which does not help establish a common, coherent technical standard, but rather it becomes a cost driven exercise, instead of addressing issues such as long-term reliability and availability.
One area where standardising activities are playing a part is smart metering, where municipalities and Eskom are coming up with requirements for demand side management. Although not yet at a price point where most consumers can justify the expense of such systems, they are seeing an uptake amongst large corporations that can justify it by watching the bottom line on a monthly basis. Given recent historical problems with Eskom’s electricity supply, the benefits are now being explored of having a system that is capable not only of metering, but also demand side management.
Smart metering down to the domestic level is being led by certain Scandinavian countries such as Norway and Sweden, and according to Cinterion, it is far and away the leading supplier into these markets. This existing experience will undoubtedly stand Cinterion in good stead when and if the local market for these applications starts to gather momentum.
Looking ahead
With Cinterion having come through its first year in operation with flying colours, Scott sees more of the same for the future. “The past year’s success can be attributed to us sticking to our guns in the face of tough economic conditions. What has enabled us to do this is our core focus on addressing our customers’ needs, be it with documentation or technical and development support, both locally and from our head offices in Europe. Cinterion has a policy of personal dedication, where each technical salesperson is encouraged to become a living, breathing part of their customers’ projects. If we maintain these values, there is no reason why we cannot continue to grow into the future.
“Although it would be an exaggeration to say that we are seeing the beginnings of an upturn yet, there are signs of renewed life. Some of the bigger players are looking towards more investment in research and development, in an attempt to position themselves at the crest of the wave come the inevitable upturn. In this regard, we expect the rest of 2009 and 2010 to pay dividends for the groundwork we have done over the past year.”
For more information contact Brian Scott, Cinterion, +27 (0)11 589 8011, [email protected], www.cinterion.com
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