Huawei buys Neul for USD25m – Machina Research’s view

23 September 2014

Huawei’s acquisition of Cambridge-based Low Power Wide Area (LPWA) connectivity technology provider Neul for a reported $25m is a sign that the segment is growing up fast. Until a few years ago the sector was characterised by a few end-to-end suppliers who sold integrated solutions to a small number of industrial buyers with specialist monitoring requirements. The ballooning interest in Internet of Things applications, not all of which require the mobility management, bandwidth or performance characteristics that cellular networks can offer, has created an opportunity for the LPWA players to reposition their offers. Suddenly there were lots of them, with new players emerging every week. Some that no-one had heard of grandly declared that they had all along been operating in ‘stealth mode’.

In buying Neul, Huawei is confirming that the grown-ups of the network equipment sector believe that LPWA has potential. Neul is a good choice of acquisition, with a decent portfolio of solution components including a core network and IPR for devices and base stations, as well as some developing relationships with standards bodies and mainstream mobile network operators. Under CEO Stan Boland it has executed an elegant pivot away from the complex TV White Space proposition that it initially pursued and towards a long term approach that prioritised unlicensed spectrum in the short term with a planned transition to guard bands and standards.

Being bought out at this stage makes good sense for Neul too. LPWA is an interlocking nexus of competing technologies and business models, and the long term future of any one player is far from assured, even if several ultimately survive.

Nevertheless the potential market for LPWA solutions is considerable. Machina Research, the only analyst company to have published detailed forecasts for the market, estimates that the worldwide market potential for LPWA connections could be as many as 19 billion by 2023.

For more details on our forecasts please contact us.

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