- Wireless Communications
- Market Transformation
Semtech Targets IoT Growth with Sierra Wireless Acquisition
Semtech Corporation has agreed to acquire Canadian Internet of Things (IoT) solutions provider Sierra Wireless in a deal worth $1.2 billion. With this acquisition, Semtech, a manufacturer of analog and mixed-signal semiconductors, aims to increase its addressable market for IoT projects by merging Sierra’s expertise in cellular IoT with its own long range (LoRa) technology for a full end-to-end platform that is adaptable to the needs of clients in multiple industries.
Clients Have Been Asking for Cellular plus LoRa
In a call with analysts to discuss the deal, Semtech emphasized that combining the capabilities of LoRa with cellular backhaul in the form of LTE Category M (LTE-M) would help address the needs of customers in industries such as utilities, citing submetering as an example. Merging LoRa solutions with cellular-based gateways will also allow Semtech to target higher end and more data-intensive markets such as fleet management. Semtech said that it had already seen a large demand for solutions combining cellular and LoRa.
The company also emphasized that its LoRa Cloud services would be a good fit for those from Sierra Wireless, enabling Sierra to provide improved provisioning, security, device management, and geolocation services. As another advantage, Sierra’s AirVantage cloud platform is flexible because it is open to non-Sierra devices—Semtech noted that three-quarters of devices on the platform are third-party devices.
Globally, this deal potentially allows Semtech to position its LoRa wide area network (LoRaWAN) protocol as an alternative to Narrowband-IoT (NB-IoT), which is a global technology but is more prevalent among Chinese vendors and use cases. Moreover, it could also call on Sierra’s expertise in LTE-M as another alternative technology to NB-IoT, boasting better battery life and lower costs. Semtech mentions the following high growth industries as areas the enlarged company would be well-positioned to serve:
- Supply chain, logistics, and asset management
- Utilities, including water, gas, and electric metering
- Smart cities and buildings, including air quality monitoring and public safety
- Smart agriculture and species protection
On the call, Semtech mentioned that the uptake of IoT has not kept pace with the more optimistic forecasts that stakeholders have made since the technology emerged. Certainly merging the two sets of expertise, in LoRa and cellular technology, should provide a more flexible tool for developers to create IoT solutions appropriate to their industries.
For more on the wider context of the industries highlighted, please see the following Guidehouse Insights reports: