Market Outlook
Market Outlook
(Updated February 18, 2025)
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.
Bittium has identified several business, market, and finance-related risk factors and uncertainties that can affect the level of sales and profits. The global geopolitical instability has caused various risks related to demand and supply and increased uncertainty.
Read more information about risks and uncertainties here.
Defense & Security
Development of the Business during the Fourth Quarter and Market Outlook
The uncertainty created by the world’s political situation has led countries to increase their defense budgets, which has affected the demand for defense industry products and services. The increased defense budgets were in the first phase allocated mainly to consumables, but in the future, the budgets will also be aimed at the modernization and development projects of the defense forces of various countries. This has been reflected in increased interest in Bittium’s tactical communication solutions.
Finland’s NATO membership is seen to have a positive impact on the demand for Bittium’s defense and security products, especially in NATO countries. NATO membership has also enabled the wide exposure of Bittium’s products and systems in NATO exercises, which is expected to increase the awareness of the products in the international market.
Bittium’s products are being piloted in several international customer trials and competitions, where customers test products for their various tactical communication needs.
In the defense market, in tactical data transfer, national defense forces and other authorities need networks where increasingly more mobile network users can reliably and securely transfer increasing amounts of data. This creates demand for tactical IP-based Bittium Tactical Wireless IP Network (TAC WIN) communication system, Bittium Tough SDR tactical radios and other Bittium IP-based tactical communication solutions. The long sales cycles in the defense industry affect the development of sales and make it difficult to predict.
Cooperation with the Finnish Defense Forces strengthened further when Bittium Corporation’s subsidiary Bittium Wireless Oy and the Defense Forces signed a Partnership Agreement for the years 2025–2036. The Partnership Services to be purchased under the Agreement apply to the life-cycle setup and maintenance of the command-and-control systems manufactured by Bittium and used by the Finnish Defence Forces. These systems include tactical communication systems and related products (Bittium Tactical Wireless IP Network, Bittium Tough SDR, Bittium Tough VoIP), as well as their maintenance and further development.
The Partnership Agreement is an important achievement in Bittium’s growth strategy and provides a framework for purchasing Bittium’s products, software and services. Procurements will be planned together with the Finnish Defence Forces for each year, and the Finnish Defence Forces will place separate purchase orders for the products and services in several batches as agreed in the Partnership Agreement. The monetary value of the Partnership Agreement depends on the needs and funding of the Finnish Defence Forces’ various projects, as well as the agreed maintenance and development services for each year.
In November, the Finnish Defence Forces started serial procurement of Bittium Tough SDR™ military and vehicle radios and related equipment and placed an order for approximately EUR 25.6 million related to the additional purchase option included in the purchase agreement signed on December 12, 2018. This was the third additional purchase. The serial procurement enables expanding the usage of the new radios in all the military branches of the Finnish Defence Forces and the subordinate establishments operating under the Defence Command. Deliveries of the order began in 2024 and will be completed during 2025.
The strategic goal of the Defense & Security Business Segment is to grow in the international defense market and win new international customers. In 2024, Bittium announced new cooperation projects with global defense players. These cooperation projects with the world’s biggest defense players are significant steps in the company’s internationalization strategy and provide a good starting point for other potential cooperation projects in the future.
The cooperation with Lockheed Martin is proceeding well. In the indirect industrial cooperation projects related to Finland’s F-35 fighter procurement, a consortium led by Bittium will develop tactical networks for cyber situational awareness development and methods and capabilities for spectrum management, which will improve the capability of tactical situational awareness. Both projects will further strengthen the data transfer capacity of Bittium’s tactical communication systems in the most demanding combat situations.
Under the framework agreement signed with BAE Systems in June, BAE Systems can offer Bittium’s tactical communication products, services and systems to its customers in the United Kingdom and internationally.
The cooperation with the Croatian Armed Forces is proceeding according to plan. As part of a four-year framework agreement between Bittium’s partner IntellByte INFO and the Croatian Ministry of Defense, Bittium has started delivering Tough SDR radios to the Croatian Armed Forces. Deliveries of tactical communication system products and Tough SRD radios also continued to the Croatian Navy.
In Austria, the implementation of Bittium’s tactical communication system by the local army continued and deliveries of system products, as well as their integration and testing, continued.
The use of smartphones and smartphone applications is increasing in the government market, which creates demand for secure Bittium Tough Mobile™ smartphones and customer-specific special terminals based on Bittium’s product platform, as well as secure software solutions. General awareness of security threats to mobile solutions has increased and interest in secure mobile devices has grown. Sales of mobile terminals and software solutions are expected to develop moderately in line with the nature of the government market.
The security of Bittium SafeMove® Mobile VPN software, used to encrypt data connections, was further enhanced with the implementation of a quantum-secure algorithm standardized by the US standards agency NIST (National Institute of Standards and Technology). As a result, the VPN software provides quantum-secure connections between a mobile device and an organization’s services, thus protecting the organization’s sensitive information from quantum computing threats. Earlier this year, the Windows version of the SafeMove Mobile VPN received the national TL IV security level approval for data encryption from the Finnish Transport and Communications Agency’s Cybersecurity Center Traficom.
The deliveries of secure Mexsat satellite phones developed for the Mexican government continued to our partner Inmosat in Mexico as new government organizations adopted satellite communications as part of their communication systems.
Medical
Development of the Business during the Fourth Quarter and Market Outlook
The healthcare technology market is undergoing significant developments in patient monitoring. The prevention of diseases and health problems is being invested through early diagnostics, patients are being discharged at an earlier stage to reduce hospital and treatment days, and the need for remote monitoring is growing. Reducing hospital days significantly increases the efficiency of healthcare, reduces costs, and improves the care experience.
Both the prevention of health problems and early discharge require accurate monitoring and measurement outside the hospital, which makes specialist diagnoses available regardless of time and place. These needs are met by Bittium’s Bittium Faros ECG measuring device intended for long-term measuring and monitoring of the heart, Bittium Respiro intended for home sleep apnea testing (HSAT), EMG measuring device for muscle activation measurement, and diagnostic software offered by Bittium. Bittium BrainStatus EEG measuring device is used in intensive care units, but the measurement can, however, also be monitored remotely.
The development of medical device sales is affected by insurance policies related to the reimbursement of treatment, which vary from country to country, affecting the development rate of the remote diagnostics market. This has led Bittium to focus its sales efforts geographically on countries where insurance reimbursement is at a good level.
In connection with the strategy update at the end of 2024, Bittium announced that it would bring a new EMG device for measuring the electrical activity of muscles to the market. EMG measurement has been in the company’s product portfolio before, and this new product version is currently used by the company’s customer to identify Parkinson’s disease. Other application areas of the device intended for remote diagnostics include monitoring the progress of rehabilitation and identifying various muscle or movement disorders. Bittium continues to explore the market options and potential partners to provide a complete solution for its customers. The EMG measuring device is a medical device that complies with MDR requirements and does not require assessment by a notified body, which makes the sales process of the product easier in different countries.
The long-term cooperation with Boston Scientific Cardiac Diagnostics (CDx) has continued well, and a significant part of the sales of Bittium’s ECG measurement device resulted from devices delivered to CDx. CDx is one of the leading service providers in the United States providing ECG measurement services. Bittium Faros ECG measurement devices were also sold in Europe, Asia and Australia, but in these markets the market for ECG measurement devices is significantly more fragmented, which is why increasing the sales volumes requires continuous work.
In addition to the EU’s Medical Device Approval (MDR) Bittium has applied for additional country-specific regulatory approvals in Europe for its Respiro HSAT device, and these approvals have been largely received. In line with its strategy, the company is now focusing on the sale of Respiro in Europe. Fulfilling the requirements for obtaining the necessary sales approvals for the US market by the Food and Drug Administration (FDA) has continued in the background. These include, among others, the development of product algorithms and extensive clinical tests, which is why obtaining the authorization can take years. Respiro’s sales are expected to strengthen and form a significant growth driver in the Medical Business Segment in the future.
The use of the BrainStatus EEG measuring device, which measures the electrical activity of the brain, in intensive care has continued and the feedback on the product is positive. Based on the feedback results, the product has been further developed to be more suitable for the operations and systems of intensive care units. The change towards more demanding recommendations for electroencephalogram measurement in intensive care units is expected to have a positive impact on the demand for BrainStatus.
The regulation of the authorities has a strong significance when bringing medical devices to the market and the requirements vary in different countries. The processes are demanding and long-term, and Bittium has invested in increasing the necessary expertise over the past year. Bittium has several development projects underway that aim to obtain medical device approvals in different countries. The most important development projects are obtaining European MDR (medical device approvals) for Bittium Faros ECG measuring device and Bittium BrainStatus EEG measuring device. The approvals must be obtained by the end of 2028, after which the products’ current medical device approvals will no longer be valid.
Engineering Services
Development of the Business during the Fourth Quarter and Market Outlook
In mobile communications, the implementation of 5G technology is progressing on both the network and terminal side. The large number of radio frequencies allocated to 5G technology increases the number of frequency versions of the products needed and thus creates demand for the development of product variants. Various satellite communication solution needs and new technologies increase the demand for Bittium’s product development expertise as new players join the traditional supplier network. In 2024, Bittium began developing a satellite system terminal for testing purposes for its customer based on a new standardized satellite technology.
Many of Bittium’s customers develop their own products and services according to their needs varying seasonally. The need for a R&D partner varies in the same cycle, causing large annual differences in the number of projects carried out with the customer.
Cooperation with existing key customers has continued to be good. Customer projects included e.g. medical grade devices, embedded wireless IoT devices as part of a larger overall system, network-side radios and satellite terminals. During the fourth quarter new R&D projects were won from, among others, the Telecom and manufacturing industry markets.
In accordance with the updated strategy, the Engineering Services Business Segment will also seek growth from the defense industry market, where engineering service expertise is offered for products and services that require embedded wireless device design expertise. These include, for example, various sensors, data links and antennas. Bittium’s long-term experience in the demand of defense industry’s requirements regarding challenging conditions of operating environment and experience in the industry’s regulated environment combined with strong industry expertise provides a good starting point for Engineering Services business to offer cost-effective solutions to customer needs.
With digitization, the secure Internet of Things (IoT) is a significant development area in almost all industries. Demand for Bittium’s R&D services and customized solutions is created by the growing need for companies to digitize their operations, collect data wirelessly, transfer data to the internet and cloud services, and monitor and control devices and systems remotely. For this, the market needs secure devices intended for both demanding industrial use and leisure applications, which collect the information brought by the sensors used by the device and create a reliable wireless connection for the device to the internet and cloud services.
With the deployment of 5G and IoT radio technologies, the number of digitized devices is constantly increasing. The devices will also have new and more advanced features, which will create demand for design services. The integration of various systems and technologies plays an important role in enabling the overall service offered to the customer.
Uncertainties in the market are caused by cost-saving pressures, due to which customers’ R&D budgets are under constant observation. Some new projects have had to be postponed, and some have been cancelled. The market situation is expected to continue challenging for at least during the first half of the year. In the R&D service business, the visibility is very short and fluctuations in the market situation can cause significant changes in a quick time frame.