Swiss wireless communications company U-Blox is scrapping its cellular business after failing in an attempt to sell it.

The company provides positioning and wireless communication technologies and services. It has decided to focus on its locate products and phase out its cellular business.

By focusing on the locate business, U-Blox believes it will be better positioned to drive innovation, leverage its technology assets, and address expanding opportunities within the global positioning market, including autonomous vehicles, industrial IoT and tracking applications.

After evaluation, U-Blox concluded that phasing out the cellular business was the most viable course of action to ensure the company’s long-term focus and operational efficiency. The cellular business has more than 200 employees and generated revenue of CHF27m and adjusted EBIT loss in excess of CHF15m in the first half of 2024.

In its review, U-Blox decided to continue to improve the performance of its short-range business, which comprises wifi and Bluetooth modules.

“This strategic shift will enable us to unlock even greater potential within the positioning technology market and accelerate the development of cutting-edge solutions for our customers,” said Stephan Zizala, CEO of U-Blox. “Our efforts to find a viable path forward for the cellular business did not pan out, including exploring a potential sale, leading us to the decision to phase out this business. We will do our utmost to support our employees, customers and partners impacted by this decision.”

The company says it will work closely with affected stakeholders to reduce disruptions and to ensure a smooth and responsible phase out process. It will initiate the transition immediately. Most of the cost reduction actions are expected to be executed in 2025.

This it believes will eliminate at least CHF30m EBIT annual losses. There will be a one-time negative EBIT impact of around CHF65m in the first quarter of this year from restructuring, of which around 40 per cent is cash. There will also be a one-time non-cash negative EBIT impact of CHF31m in the fourth quarter of 2024 from intangible assets impairment.

U-Blox has confirms its previously communicated guidance for Q4 2024. It expects revenue of CHF60-70m, and EBIT margin (adjusted) of -25% to -15%.

As of December 2024, U-Blox (www.u-blox.com) achieved the completion of a CHF20m cost optimisation programme. The first savings will be reflected in the P&L in the second half of 2024, while the full effect is expected in the first half of 2025.