Did Sierra Wireless Just Fire a Warning Shot on the Internet of Things?
Summary
However, flat outlook for 2019 -- including a new cost-cutting initiative thats usually reserved for companies exiting high-growth mode -- would indicate alls not well for the IoT specialist or the sand box it plays in. That was a good move as the gross margin on services (52.3% on the year) is better than Sierras average and helps broaden the companys reach. However, Sierra is still posting growth in its newest and highest-profit segments, and reducing expenses is signaling a shift in focus rather than problems with the IoT industry. Thexton said Sierras total addressable market should grow to $10 billion a year by 2021, and investing in research will be key to keeping up. Plus, Thexton said the connected auto segment is slowing, and profit margins are thinner than average, masking stronger performance in the companys network IoT business.
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