Market Outlook
(Updated August 4, 2023)
(Updated August 4, 2023)
Bittium's customers operate in various industries, each having its own industry-specific factors driving the demand. A common factor creating demand among the whole customer base is the growing need for higher quality and secure data transfer. Due to the technology competencies accrued over time and the long history of developing mobile communication solutions, Bittium is in a good position to offer customized connectivity solutions to its customers. Over thirty years of experience and extensive competence in measuring biosignals also act as a basis for medical technology solutions.
The global disruption in the availability of electronic components that followed the pandemic has had a slowing effect on the development of the company's business and sales during the years 2021, 2022, and 2023. The market is slowly recovering, and the company believes that the component shortage will recede during 2023. The world's geopolitical situation, problems in logistics chains, inflation and deteriorating economic development create uncertainty in the market outlook.
Read more information about other risks and uncertainties here.
The factors affecting the demand for Bittium's products and services are described below:
In the defense market´s tactical communications sector, the governments´ defense forces and other authorities need networks that troops, who are more and more constantly on the move, can use and transfer growing amounts of data securely. This creates demand for Bittium Tactical Wireless IP Network™ (TAC WIN) broadband network, Bittium Tough SDR™ handheld and vehicular radios, and for other Bittium´s IP-based (Internet Protocol) tactical communication solutions that fulfill the needs of data transfer of moving troops and individual soldiers.
Russia's war of aggression against Ukraine has also increased the defense budgets of various countries and has had a favorable effect on demand in the defense market. In the first phase, the increased defense appropriations have been allocated mainly to consumables. In the future, the increased budgets will also be aimed at the modernization and development projects of the defense forces of different countries, which may have a positive effect on the demand for Bittium's tactical communication solutions.
Finland's NATO membership is expected to have a positive effect on the demand for Bittium's defense and official products.
Bittium continues its efforts to export tactical data transfer products to international markets and aims to get new international customers during 2023. The development of sales is moderate due to the long sales cycles of the defense industry.
The use of LTE technology, smartphones, and applications continue to increase in special verticals, such as public safety, creating demand for Bittium Tough Mobile™ secure LTE smartphone and other customized special terminals based on Bittium´s own product platform. The awareness of mobile security risks is growing, and the interest in secure mobile devices is increasing. The sales of secure terminal products are expected to develop moderately according to the nature of public safety markets.
The global component shortage affects the availability of various components used in products, which affects the company's ability to deliver products to its customers on the agreed schedule. The component shortage is expected to recede within 2023.
In mobile telecommunications, the implementation of 5G is accelerating. Investments in developing new features continue and the importance of software development in the 5G network development expands. This creates demand for Bittium´s R&D services. There is a wide range of frequencies allocated for the 5G technology, thus creating the need to develop multiple products to cover the market and creating demand for R&D services for the development of product variants. Different needs for satellite communication solutions increase the demand for Bittium's product development know-how with the addition of new players to the traditional supplier network. The demand for Bittium's R&D services is also increased by the need to develop new devices utilizing 5G technology.
As digitalization evolves, secure IoT (Internet of Things) has become a significant development area in almost every industry. The increasing need for companies to digitalize their operations, collect data wirelessly, and transfer it to the internet and cloud services generate a need for Bittium´s services and customized solutions. To this end, the market needs secure devices, for both demanding industrial and leisure applications, which collect information from the sensors used by the device and create a reliable wireless connection to the Internet and cloud services. The deployment of 5G technology is expanding and the number of digitalized devices increases continuously. The devices will also feature new and more advanced features that will create demand for design services. Therefore, the integration of different systems and technologies plays an important role in enabling complete digitalization services. There are several learning systems and devices under development that use different kinds of artificial intelligence (AI) technologies to ease and speed up the processing of large data amounts.
Technological development and new innovations enable the development of new devices and applications for monitoring health and well-being, which increases the demand for Bittium's product development service expertise. Bittium's experience in medical devices, sports applications, and wearable devices, combined with wireless connectivity expertise, enables competitiveness also in providing design services for health, well-being, and sports equipment.
The goal of Western companies is to shift the focus of design and manufacturing to an increasing extent, e.g., in Europe can be seen as an increase in demand for Bittium's product development services, especially in terms of device design.
The medical technology market is undergoing significant development in patient care, especially outside hospitals. There is an increasing focus on the prevention of diseases and health problems through early diagnosis and the discharge of patients at an earlier stage to reduce hospital and treatment days. These actions significantly increase efficiency in health care processes and lower costs.
A prerequisite for early hospital discharge is the enabling of accurate and precise follow-up and measurement opportunities in home conditions, which would be enabled through remote monitoring. Remote monitoring and remote diagnostics also enable specialists´ diagnoses regardless of time and place. Also, evolving artificial intelligence-based algorithms become more common in supporting physicians in making diagnoses. Remote monitoring and remote diagnostics make it possible and faster to obtain more accurate diagnoses, which, in turn, speeds up the start of the right kind of treatment. The market change will enable several new providers to join the overall care service chain, without compromising the quality of specialist services.
For measuring biosignals, as well as remote monitoring and diagnostics, Bittium provides its Bittium Faros™ product family for remote ECG monitoring, Bittium BrainStatus™ for measuring the electrical activity of the brain, home sleep apnea test solution Bittium Respiro™, and different kinds of diagnostics software offered by Bittium.
The global component shortage affects the availability of various components used in the products, which affects the company's ability to deliver products to its customers on the agreed schedule. The component shortage is expected to ease by the end of 2023.
Regulation by the authorities has a strong role in bringing medical devices to the market. The requirements vary for different countries, and the processes are long-term. Bittium has achieved a new MDR standard level medical device approval in the EU region for the Bittium Respiro™ product family that measures sleep apnea. The company has also applied for a medical device 510k clearance by the US Food and Drug Administration (FDA) for the Respiro product family, and currently estimates that it will receive the license in 2024. However, the schedule may be affected by possible additional investigations determined by the FDA authority. Bittium has several medical device approvals in progress in different countries.