Astaire believes Telit Communications well-placed in M2M market

In a comment on full-year results from privately-owned Cinterion Wireless Modules and the broader machine-to-machine (M2M) market, Astaire Securities said that pressured average sales prices will favour the larger operators and those with low cost manufacturing centres, such as Telit Communications (AIM: TCM).

The un-listed Cinterion is the largest manufacturer of M2M modules, based on market-share, and its has reported 40% revenue growth in 2009. Furthermore the company is targeting, and is on-track for, more than 10% growth in 2010.

Astaire believes that the Cinterion results and its positive outlook support the view that the global M2M market has returned to growth with initiatives across a number of industries, including Telit’s primary sectors such as smart metering and telematics.

Indeed in its own results, earlier this month, Telit said the future looks promising through the rest of 2010 and beyond. Following the heavy investments made during 2009, Telit believes it is well positioned to take advantage of the opportunities ahead.

“We successfully transferred our production to China in order to increase efficiency and are confident in our ability to continue our leading performance in the M2M industry and increase our rate of growth in 2010”, Telit chief executive Oozi Cats stated previously.

In a previous note, Astaire noted the M2M markets growth prospects and that Telit is set to benefit from a number of design wins coming on stream and the relocation of manufacturing. The broker believes that Telit will benefit from an approximate 20% reduction in production costs and an increase in capacity.

http://www.proactiveinvestors.co.uk/companies/news/14797/astaire-believes-telit-communications-well-placed-in-m2m-market-14797.html