The company, whose origins lie in Israel but is now seeking headquarters in the UK, sees its core skill as the design and sale of mobile communications hardware. It has targeted two markets; machine to machine (m2m) communications and the provision of non-branded handsets to carriers.
Certainly its financial record shows it is targeting profitable sectors. In the year to December 31, 2004 it turned a net loss of GBP 7.45m ($9.6m) into income of 8.6m euros ($11m) on revenue that tripled to 75.3m euros ($94.3m).
Data products only accounted for 11.6m euros ($14.9m) last year but have enormous growth potential in applications such as vending machines reporting back when they need replenishing to utility meters that record usage rates. Telit believes that the technology can create new business models such as pay as you drive automobile insurance tariffs.
The company quotes m2m consultancy E-principles that forecasts that by 2011 the number of m2m connections will exceed the number of conventional wireless subscribers in North America, Europe and Japan.
With annual growth in m2m connections that market analysts predict will grow at 47% a year, Telit believes it is up against major competitors in Siemens and Wavecom, together with players from the handset business such as Nokia, Motorola, Sagem and Sony Ericsson.
After being in the market for just over two years, it reckoned it help a 1.5% share last year which it aims to build up to 5% by the end of 2006.
In handsets, while the market is currently dominated by six cellular brands, Telit quotes analysts as predicting that non-brands will grow from 16% at the end of 2003 to 30% by 2007. It sources products from OEMs and ODMs, mainly in South Korea and Taiwan, brands them and sells through distribution channels and the carriers.
The company says its CDMA products entered the Israeli market in 2001 and held a 36% share by 2004. It plans to replicate this achievement in other target markets.
