Who will Cisco be buying next?
Cisco has stated more than once they are looking at being the focal point of the Internet Of Things (IOT), recently losing a patent litigation with a "patent troll" they will look to strengthen their position and M&A looks like the quickest and cheapest way to achieve this.
That being said the IOT market for chip makers with patent(s) is not cheap. Avago (AVGO) will buy out Broadcom (BRCM) for a record $37 billion us. The offer breaks down to $20 billion worth of shares and $17 billion cash valued the Broadcom stock at $54.50 a share from the $44.49 of the first of the month. Avago also rose from $116.88 to $148.07 in this month starting the price war for stocks in this sector.
Deployment Model:
Home/Residential
Enterprise
Metro
Rural
Cell Size
Femtocells
Picocells
Microcells
Carrier WiFi forecasts (unit shipments, revenue, installed base) are categorized in the following categories:
Equipment Category
Access Points
Access Point Controllers
Integration Approach
Managed WiFi Offload
Unmanaged ‘Open Access’ WiFi
Small cell backhaul forecasts (revenue) are categorized in the following technology categories:
Ethernet over Copper
Ethernet over Fiber
DSL modems and DSLAMs
Non Line of Sight (NLOS) Microwave (Sub-6GHz spectrum)
Point to Point (PTP) Microwave (6-60GHz)
Point to Multipoint (PTMP) Microwave (6-60GHz)
Millimeter Wave (Unlicensed 60GHz spectrum)
Millimeter Wave (Licensed 60GHz spectrum)
Satellite
Mobile network data service forecasts (throughput and revenue) are categorized in the following access network technology categories:
Macrocell Network
Small Cells
Carrier WiFi
DAS
Regional forecasts are categorized in the following 6 categories
North America
Asia Pacific
Western Europe
Eastern Europe
Middle East and Africa
Latin and Central America
Key Findings
The datasheet has the following key findings:
Small cells, carrier WiFi and DAS infrastructure investments will account for a $42 Billion HetNet ecosystem by 2020
Small cells and carrier WiFi deployments are expected to carry more than 60% of all mobile network data traffic by 2020, which will account for $352 Billion in mobile data service revenue.
At present, the small cells and carrier WiFi infrastructure value chain is highly fragmented with ‘pure-play’ vendors and incumbent macrocell vendors battling to gain a higher share of the market
SNS Research expects the value chain to consolidate over the coming years following several future acquisitions such as the recent acquisition of Ubiquisys by Cisco
Eyeing the momentum behind small cell deployments, DAS vendors are now entering the small cells market.
While it is a preferred opinion among wireless carriers, aggregating outdoor small cell backhaul with macrocell infrastructure may prove to be a well challenging task. Consequently the demand for small cell backhauling has opened a new opportunity for investment, which will be a market worth nearly $6 Billion by 2020~PRNewswire
So which one to hold in this sector?
Edgewater Wireless (V.YFI) gets the nod on the strength of the increased patents 23 at this time (Sold 1 to Apple this year and filed another)
The price has risen rapidly from $0.205 to the price now following correction and pull back of $0.465 and is under valued by every report below the fair price evalutions of $0.63 to $0.84. This stock was one of the most liquid on the TSX Venture yet again and fell subject to accounts being offside needing to be squared. Just remember this is a long long hold that needs a few moving parts to fall in place.
Next week this stock will run up another possible 15% to 22% with June 10th being an important date to circle on the calendar for those holding this stock or looking to take a position. This is a buy on every report whether of not it gets bought out before June 10th as the company's new revenue model and Zenwave partnership will pay multiples. Nobody has time for slow wifi least of all anyone trading stock only worry is when company runs up they do a financing if they dilute this more it will kill momentum back under the deal price. Rumours can only carry a stock for so long.
