Cavli Wireless and GCT Semiconductor Target the Underserved Indian Module Market

Internet of Things (IoT) module manufacturer Cavli Wireless has announced a new range of cellular modules designed in, developed for, and to be manufactured domestically in India. Cavli claims it is the first module vendor to try to do so and will be using cellular modem chipsets supplied by GCT Semiconductor. Cavli Wireless is a relatively new entrant to the IoT module market, being formed in 2017, and is headquartered in California, alongside its new strategic partner GCT. Cavli’s modules are almost exclusively targeted at low-cost, low-bandwidth IoT applications with all but one of its C-series of models offering some combination of Long Term Evolution (LTE) Cat-1, Cat-M, and Narrowband-IoT (NB-IoT). Its P-Series modules are also Low Power Wide Area (LPWA) centric, but incorporate an application processor for edge computing.

Unlike most vendors, all of Cavli’s modules have an Integrated Subscriber Identity Module (iSIM) with Embedded SIM (eSIM) functionality to enable global connectivity. Cavli’s module product portfolio has been designed from the outset on the premise of the problem-solving abilities afforded by “uninterrupted global connectivity.” Cavli operates a cloud-based connectivity platform called Hubble, the vendor’s network of carrier partners purportedly providing customers with access to more than 60 carriers worldwide, 26 of which support NB-IoT and 17 of which support Cat-M. Cavli will also sell plastic SIM cards, as well as socketed and soldered eSIM chips to connect non-Cavli module-based devices to its international Virtual RAN (vRAN).

Cavli’s partner GCT is a fabless semiconductor manufacturer established in 1998 that currently offers seven cellular modem chipsets, one of which, the GDM7243i, is targeted at the IoT. Launched in 2017, the GDM7243i is built on GCT’s founding competency in software-defined radio and supports Cat-M, NB-IoT, and 2G. At launch, the GDM7243i was notable for supporting Sigfox, too, and remains the only cellular LPWA chipset to do so. The GDM7243i was chosen by Cavli Wireless for its C42GM module, which is the newest addition to Cavli’s product line, and is the first to use a GCT chipset. All previous Cavli modules were labeled as “Designed in California” and either “Made in China” or “Assembled in China,” but the C42GM is the first to be labeled as “Assembled in India” with mass production expected to occur in 1Q 2021.

Cavli wants to supply the Indian IoT device ecosystem, to steal a lead on the under-developed Indian IoT market, and gain an advantage in a potentially valuable geography that is not yet well served by established module vendors. If successful, this initiative would give Cavli and its partner GCT a big boost. Cavli Wireless is one of more than 50 cellular module vendors tracked by ABI Research, and the IoT module market has never been more competitive or more volatile, with mergers between vendors, acquisitions by larger wider-reaching businesses, and divestures of entire business units and product lines by some vendors occurring in the last few years. At a time of repositioning and upheaval for long-standing participants it is not easy to be a new entrant, especially one starting out from a Western base like Cavli.

SIMCom International’s sale of SIMCom Wireless Modules to Sunsea AIOT was due to the perception that barriers to entry were becoming too low, the threat of competition too high, and the cost of inventory too much of a risk to carry. While in the case of Telit and Sierra Wireless’ sale of their automotive divisions, the level of customized development was so high that even in a proven vertical with high Average Revenue Per Unit (ARPU), the margins were still not strong enough; especially with so many new vendors competing to sell to this prestigious sector. u-blox and Sunsea AIOT both competed for SIMCom, while rival Fibocom purchased Sierra Wireless’ automotive business, and Thales Group acquired Machine-to-Machine (M2M) module market originator Gemalto (née Cinterion, née Siemens). In a market this dynamic, any new player needs a distinct strategy and business model to make waves.

The biggest disruptor to the cellular module market in recent years has been Chinese vendor Quectel, dominating the worldwide market for cellular module shipments and turnover in 2019 and 2020, achieving notable success in 2G, and NB-IoT domestically, and in the Cat-1 market globally. But even Quectel has not broken into India as successfully as it would like to; India has taken longer to develop a demand for IoT modules, yet all economic indicators suggest that it is only a matter of time before India represents a substantial opportunity. Cavli Wireless has hopes that India will become a global manufacturing hub for export, in the same way that China is today and wants to be in the best possible position to capitalize on that when it happens. Cavli Wireless has stated that, in the long term, it will manufacture LPWA, LTE, and 5G modules in India through its partnership with GCT.

An important component of Cavli’s aspirations in India may be its Hubble99 plan, which helps improve the affordability of embedding connectivity into electronic devices. Hubble99 provides subsidized module hardware in return for a US$0.99 per month connectivity fee, per device, billable in advance annually. The viability of this model would be aided by the reasonable cost of manufacturing modules in India, and the elimination of distribution costs thanks to the modules not needing to be imported. Cavli’s integrated eSIM prevents its modules from being connected to any other network than its own, and modules would only continue to function and have a valid warranty for as long as a data plan is being paid for. The Hubble99 tariff plan was launched in June 2020 and is one of several available from Cavli.

It is hard to compete with the low price of cellular modules offered by Chinese vendors, especially when it comes to Cat-1, Cat-M, and NB-IoT. But because low bandwidth devices with predictable data usage are the ones most suitable for use with a fixed rate data plan like Hubble99, Cavli may gain a competitive advantage. Cavli’s go-to-market strategy means that service provider choice on the part of the device OEM would be lost. And that long-term device viability would be dependent on the continuation of Cavli’s service, although because its network is virtual ownership of the business, relationships that underpin it could be passed to another party. Lastly, what Cavli is attempting strongly suggests that at the low end of the module market, hardware needs to become so commoditized as to have no intrinsic value. Its value exists only in terms of what is possible for as long it has an active connection.

The GDM7243i from GCT does not represent the latest technology, being launched during the first flurry of cellular LPWA chipset activity. It is not the smallest or the most power-efficient chipset, but it does feature heavy Radio Frequency (RF) integration, making it theoretically very versatile. As a lesser known semiconductor manufacturer, GCT’s design stands to be a good choice for Cavli Wireless to license. It will give Cavli’s modules some differentiation and allow the vendor to take greater control of the manufacturing and assembly process, for the sake of actively targeting the price-sensitive developing market of connected electronics manufacturing in India. Every cellular module vendor needs to innovate and develop a “smart” angle these days, so success for Cavli in India and beyond will hinge entirely on its integrated eSIM strategy, and the palatability and profitability of its tariff plans.