Are GNSS tracker still a good business?

The GNSS Industry in other’s opinion:

A friend in Taiwan wrote the following sentence when he learned that I made tracker tracker after leaving the communication module company where I worked for 8 years 

"Buddy , it is a bloody market"

GNSS market is not only the red market, and even the bloody market. You can judge from what he said GNSS market is full of fierce competition.

 My View on GNSS Industry

1. Before I decided to work in this tracker industry, I spent some time investigating: which industries the global communication modules were sold to and what the top 10 industries are?  As a result of working in the module industry, these data are relatively easy to obtain and analyze. 

2. Communication module industry is like a duck in the spring river. It is a relatively basic component of the whole Internet of Things industry, such as smart meter reading, shared bikes, shared charging banks, mobile payment and Internet of vehicles, which are reflected in the rise and decline of module shipments.  Modules are called portals for IoT applications. 

3. Thanks to his former employer's share in the whole module market, his data are very reliable and scientifically based.  At that time, the main sales of modules came from meters, sharing, mobile payment and Internet of vehicles.  Meter industry, state grid power industry is special, very strong industry attributes and policy attributes, not suitable;  Sharing industry, players are basically from the Internet, financing and money burning mode, can not play;  Mobile payment industry, the industry of head players, small businesses can not do;  The Internet of vehicles industry can be divided into the pre-installation market and the post-installation market. Entrepreneurial enterprises cannot do the pre-installation market. The development cycle, qualification and capital return are all limited. 

Key Players in GNSS Industry

1. The vast majority of global locator manufacturers have used our communication module, which helps us to obtain the overall situation of the type selection, design, target market and target market shipment of these locator manufacturers from another side. 

2. From the domestic perspective, they are generally distributed in South China, and their advantages are supply chain and their own factories. The order of advantages is supply chain production > service > R&D.  Shipments of JT808 public protocol devcies, auto finance suppliers accounted for a relatively large proportion.  Most of the supplier market is domestic, while a few focus only on the overseas market, mainly distributed in auto insurance, fleet management applications. 

3. From overseas, most manufacturers are located in Taiwan and Lithuania and the United States. The United States has a very mature fleet management system, and Latin America and Europe have a huge demand for auto insurance applications.  Some of them will be in Taiwan, mainland China to complete production. 

4. The world's TOP GPS tracker manufacturer

Traditional Players:

Teltonika Lithuania 

2200+ employees, revenue in 2021 is 320 million US dollars. Main market: European countries, Device Type: Vehicle tracking device.

Camlap  U.S.

1000+ employees, revenue in 2021 is 350 million US dollars. Main market:

America, device type: vehicle tracking device.

Queclink China

400+ employees, avenue in 2021 is 143 million US dollars. Main market:

EU and America. Device type: vehicle tracking device.

Concox China

300+ emplyees, avenue in 2021 is 63 million US dollars. Main market:

China and Southeast Asia. Device type: vehicle tracking device.

Emerging Players:

Samsara U.S. 

In 2015, it was established in California, the United States, with sales of 2 billion YUAN in 2021 and market value of 80 billion yuan in 2022.  Vehicle positioning monitoring hardware equipment to collect data and provide a platform for logistics and fleet management subscription services. 

The G7 China 

Founded in 2011 in Beijing, it provides a digital logistics platform similar to Samsara.  In February 2022, a round of G financing of us $200 million was raised. 

RoamBee U.S. 

Established in California in 2013, it focuses on asset location and status information monitoring, and its products are only for goods, not involving vehicle management.  Round B financing of about RMB 100 million was completed. 

Tive U.S. 

Founded in Boston, THE United States in 2015, the product is only for the monitoring of cargo transportation scenarios, not involving vehicle management.  In April 2022, round B financing of usd 54 million will be completed. 

By contrast, traditional and established manufacturers pay more attention to the development of hardware equipment to earn one-time profits of hardware.  Emerging manufacturers are more likely to provide digital solutions through cloud platform services, and get the usual annual service fees. 

GNSS Tracking Industry Status

1. In the domestic market, it will be difficult for manufacturers with only hardware equipment supply capacity. 

To the locator manufacturers concentrated in Shenzhen, for example, most of the locator manufacturers are more manufacturers, they will assign outsourcing companies to software services. The factory only need to have a few layout and structural engineers for production services.  This is the advantage of Shenzhen, pipeline-type product development and production. 

2. Instead, project integrators and industry solution providers earn most of the profits.  Take auto finance as an example, hardware manufacturers sell to industry solution providers at a price of dozens of US dollars, and solution providers integrate software platforms and hardware devices for the application of auto finance industry, and sell to 4S stores nationwide at a price of more than 100 US dollars per unit.  The scheme integrator has a large number of hardware equipment suppliers and has full power of discourse and bargaining.  As a result, hardware manufacturers end up competing with each other in the supply chain to gain marginal profits. 

3. 

Production-oriented manufacturers: maximize costs and improve production efficiency through the scale advantage of the supply chain.  Achieve industry competitive advantage in cost and efficiency.  The product line is very complete. 

R & D manufacturer: the group that usually provides hardware and software solutions to the manufacturer above.  Also known as ODM Solutions.  The scale of such manufacturers is usually small because the solution products are not reproducible.  There are also some R & D benchmarking manufacturers, focusing on the wearable devcies, high-precision positioning, indoor positioning and other segmented industries.  Product lines do less but better. 

Solution manufacturers: For such project-based and industry-based solutions, we should do two things: first, find senior industry experts and consultants, and second, develop platforms that are in line with the industry.  As for the locator products and research and development.  The product line is narrow and deep. 

4. The old local locators in Europe and America companies are increasingly prominent in the disadvantage of cost competition. Some of them gradually reduce the proportion of hardware to transform into services, so that there will be a considerable part of the hardware design and production opportunities delivered to domestic manufacturers.  What we need to do is how to let these old European and American manufacturers know us, find us and are willing to deliver to us. 

5. Many domestic locators manufacturers are trying to develop overseas markets, but the proportion of manufacturers in China is still very small in Europe and the United States.  Most of the domestic locators are white or pasted. Is this a sustainable way of development?

Where are the opportunities for new players?

1. The whole industry, vehicle positioning applications accounted for nearly 70%, asset positioning 20%.  Vehicle applications are relatively concentrated, and some people question whether the on-board locator will still be valuable after 3-5 years when GPS and 5G communications are factory-installed . 

A significant proportion of the 70% are in fleet management and auto insurance and financial leasing.  They collect data from onboard locator devices and upload it to the platform for monitoring and data analysis.  What is highlighted here is the "upload platform", whose platform is it, of course, not the platform of the car manufacturer, but their own business platform.  So even though the vehicle has been installed with GPS and communications, the data is only collected and sent to the vehicle manufacturer's platform, they don't transfer the data to the third party fleet management, auto insurance company.  Therefore, in the future, vehicle positioning equipment will still be the largest proportion, and the competition will continue to be fierce. 

2. Different from vehicle positioning applications, Roambee and Tive focus more on asset monitoring and cargo supervision in transportation to reduce asset management risks and improve transportation efficiency.  With the development of Internet of Things network [2G to 4G] and the reduction of related supporting costs such as data flow, the penetration rate will be higher and higher, and the trend of asset networking will be more and more obvious. 

3. Provide services for vertical industries in the form of software and hardware solutions in China;  We will do a good job in overseas products and technical services and increase investment in overseas markets.  This investment is not only the online e-commerce of Alibaba, not only the white label products service and ODM service.

Follow us, next time we will talk about how to promote GNSS devices to foreign market.