News will start flowing this week in advance of the world's biggest annual event in mobile telephony, the Mobile World Congress in Barcelona, which begins on February 27. Thousands people from mobile services providers, smartphone and other mobile gadget manufacturers, telecommunications chipset producers, and network equipment companies from all over the world, will flood the city from Monday to Thursday of next week. This is the place where the smartphone makers other than Apple (AAPL), which never turns up there, unveil their most advanced devices for the coming year.
Since the 2008 event, when it was clear to everyone that the iPhone had generated an 'industrial revolution" in telephones, all the other manufacturers try every year, at Barcelona and other events, to launch the thing that will be closest to the original dreamt up by the genius of Steve Jobs. That race looks to have become dull, and my guess is that no earth shattering news on handsets will emerge from Barcelona this year. Apple itself has not done much new in telephones since the first iPhone five years ago, but all eyes are lifted towards the iPhone 5, due later this year.
Traffic jam around the corner
Beyond the launch of another "sexy" smartphone, this industry has very severe problems to solve in the area of video transmission on the networks. The day is not far off when the network will be one big traffic jam, if investment is not accelerated. According to research firm Gartner, by 2014, annual global sales of smartphones will reach one billion. For the sake of comparison, just a few years before the launch of the iPhone, we passed the one billion mark for sales of regular cell phones for voice calls.
Gartner also estimates that annual sales of tablet computers will reach a quarter of a billion in two years' time, which will make its own contribution to the jam on the networks, alongside a substantial quantity of new generation laptops, known as Ultrabooks.
A smartphone in the Western world currently consumes around one giga of data a month, mostly video. This is expected to jump to 4 giga a month within four years, and data consumption by tablets and Ultrabooks will rise from 2 giga to 10 giga monthly.
The social networks, headed by Facebook, which will reach one billion subscribers within about a year, are now, and in the future will continue to be, the biggest generators of traffic on the Internet.
At the Barcelona event, various solutions to the data traffic problem will be presented by Israeli companies, such as Allot Communications Ltd. (Nasdaq:ALLT; TASE: ALLT) and Radcom Ltd. (Nasdaq: RDCM). Among the stocks I hold in my portfolio here, Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) will have a world-first opportunity in Barcelona to exhibit its WiFi platform for wireless carriers, developed on the basis of its acquisition of Wavion of Yokne'am.
Diverting to Wi-Fi
Solutions for diverting heavy traffic from cellular networks to Wi-Fi points installed in crowded cities have lately become a hot niche in telecommunications equipment, and large tenders are expected this year. For example, giant company China Mobile (CHL) has announced its intention of deploying a million Wi-Fi points around China to support the many subscribers who have bought smartphones and experience difficulties in surfing the web, because the company's 3G network still does not cover many areas of China's large cities.
At a recent presentation by Alvarion at the Tel Aviv Stock Exchange, CEO Eran Gorev explained that the company had managed to install, "from one day to the next", Wi-Fi coverage in a mall in a developing Asian country, for a wireless carrier that sold thousands of new iPhones there, and was concerned that if they were all used at once its regular network would crash. Alvarion's success brought it follow-on orders worth millions of dollars from that same carrier.
Alvarion competes in this regard against giant Cisco (CSCO), and against two small, private companies that specialize in this niche. One is Canadian company BelAir Networks, which is mainly active in North America with large customers such as AT&T and the big cable companies. Rumor has it that BelAir is on the way to being acquired by Ericsson (ERIC), which sells its solutions.
The other private company is Ruckus Wireless of the US, which, among other things, has installed more than 100,000 Wi-Fi points in Japan for wireless carrier KDDI. It recently raised $22 million, and there are those who are sure that it will shortly file a prospectus for an IPO, a move that generally has a positive effect on the shares of other companies in the same field, such as, in this case, Alvarion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 20, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012