U-blox repositions concentration towards Global Navigation Satellite System (GNSS) solutions, discards cellular operations
Swiss technology company u-blox has announced a strategic shift, aiming to reinforce its position as a premier provider of world-class location solutions. The company will be phasing out its Cellular business and focusing on its Locate business, which comprises Wi-Fi and Bluetooth modules.
The decision to divest the Cellular business is based on aligning u-blox with high-growth markets driven by precise positioning technologies, particularly in automotive, industrial IoT, and tracking applications. This shift reflects a deliberate prioritization of segments where u-blox sees stronger long-term growth potential and technological leadership.
u-blox has completed a CHF 20 million cost optimisation program as of December 2024, with the majority of the cost reduction actions expected to be executed in 2025. The first savings from this program will be reflected in the P&L in H2 2024.
The company anticipates an EBIT margin (adjusted) of -25% to -15% for Q4 2024, and expects revenue of CHF 60-70 million for the same period. This strategic move is expected to significantly improve u-blox's financial performance, with the company aiming to eliminate at least CHF 30 million EBIT annual losses.
To discuss the phase out of its Cellular business, u-blox will host a Q&A session on 14 January 2025 at 14:00 CET. To register for the Q&A session, visit the webcast registration page.
The Locate business currently has over 200 employees, and u-blox expects the full effect of the cost optimisation program in H1 2025. The company also anticipates a one-time negative EBIT impact of around CHF 65 million in Q1 2025 from restructuring, of which around 40% is cash.
The market for automotive GNSS chips, an important component of u-blox’s Locate business, is projected to grow from $3.2 billion in 2025 to $5.2 billion by 2035. This growth is driven by regulatory mandates for vehicle tracking and the expansion of advanced driver-assistance systems (ADAS), highlighting consistent demand for positioning solutions.
The CEO of u-blox highlighted "the future is in automated driving and mobile robotics," signaling a strategic bet on high-value, technologically advanced segments. This focus on positioning solutions aligns with global trends toward automation, connectivity, and smart infrastructure.
The strategic refocus has boosted investor confidence, evidenced by Advent International’s $1.3 billion acquisition offer at a 53% premium. Advent’s interest underscores strong market faith in u-blox’s core markets and technologies, especially in automated vehicles and industrial smart devices.
In summary, u-blox's strategic shift to focus on the Locate segment offers both technological differentiation and robust financial upside. The company's improved financial results and the imminent Advent acquisition highlight confidence in this focused path forward.
Business and finance are at the forefront of u-blox's strategic decisions, as the company prepares to augment its technological leadership in the high-growth markets of automotive, industrial IoT, and tracking applications by focusing on its Locate business. This shift is anticipated to significantly improve u-blox's financial performance, with the goal of eliminating at least CHF 30 million EBIT annual losses.
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