Proving the Business Case for the Internet of Things

Asset-tracking focus boosts M2M revenues at Novatel

Iain Morris
May 14, 2014
 
Hardware specialist Novatel Wireless has reported strong growth in revenues from its M2M activities in the first quarter, on the back of major contract wins in the fleet-management and vehicle-tracking sectors.

Revenues from the M2M business rose by 17.3%, to $12.1 million, compared with the same period of 2013.

During the quarter, Telogis (Aliso Viejo, CA, USA) – which develops cloud-based asset-tracking services – became one of Novatel’s (San Diego, CA, USA) top ten M2M customers and a “meaningful contributor to growth”, according to Peter Leparulo, Novatel’s chief executive.

The device maker also signed a deal with fleet-management player FleetMatics (Tallaght, Ireland), to which it expects to start shipping products in the second quarter.

Another contract wins came through AirIQ (Toronto, Canada), whose technology allows fleet and car rental customers to monitor vehicles in real time.

Novatel has also been working on integrating its devices with services developed by telematics player DigiCore (Pretoria, South Africa), and expects these efforts to bear fruit from mid-2014 onwards.

The recent quarter also saw Novatel register its first revenue contributions from the usage-based insurance (UBI) market, where it claims to be laying the groundwork for “meaningful growth”.

Major partners in that particular area include the RAC (Walsall, UK), a motoring organization in the UK, and Himex (Scottsdale, AZ, USA), which specializes in developing UBI services.

Novatel is currently in the midst of a major restructuring aimed at building its presence in M2M and “retrenching” some of its activities in the mobile computing market.

As a result, overall revenues at the company fell to $45.3 million, from $85.9 million in the first quarter of 2013.

Even so, Novatel managed to reduce its net loss from $9.12 million to $8.98 million over the same period.

“As we move through 2014, we have a substantial, growing pipeline of opportunities in M2M,” said Leparulo. “We will be expanding our partner relationships as we deepen our presence in our targeted verticals.”

“In mobile computing … certain products currently in the channel will come to the end or the long-tail of their planned life cycle,” he added. “We will continue to evaluate our cost structure, commensurate with our opportunities, and remain focused on returning to profitability.”
 
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