Hi Saul,
I posted the following on the RB board, but its probably a good idea to post it here. You probably have a lot of knowledge about this company, so I would appreciate your thoughts/comments on the future prospects for this company.
Thanks,
Anirban
— x post from the RB board ----
I was intrigued by NotDutchNotMuch (Bashaar’s) bearish post on UBNT:
http://discussion.fool.com/1069/so-i-am-on-the-fence-but-falling……
Bashaar makes a compelling case around the point that much of the wireless networking growth projected in various reports are probably looking at 3G/4G type technologies. Much (all?) of Ubiquiti’s service provider solutions are targeted at point-to-point wireless technology. I 'm deliberately focusing on the service provider solutions as these account for about 75% of UNBT’s revenues. The point-to-point technologies are targeting wireless Internet provisioning for remote/rural areas, where the cost of deploying cables (fibre, coaxial, HFC whatever) and cellular technology for high-speed broadband (LTE) is prohibitively high. I agree this is a niche area. I would think such point to point wireless tech wouldn’t be practical in high-density areas with low broadband penetration (e.g., in India?). Now, in my digging around, I did find one example of massive deployment in Russia. Somewhere, I saw the state of Alaska being mentioned as an example territory ripe for invasion by WISP. I suppose there are large countries in South America that may also be good candidates for use of such technology. Some analysts predict that the WISP business will grow at CAGR of around 20%. If true, Ubiquiti will be able to eat of lot of this pie!
Some additional note from my due diligence
I have found some articles that I thought were useful in that they helped me understand Ubiquiti’s product line.
Enforta in Russia deploys airMAX
“Ubiquiti Networks, Inc., a next-generation communications technology company, today announced that Enforta, the largest fixed wireless broadband operator in Russia, is leveraging Ubiquiti’s airMAX product platform to expand its networking infrastructure. Two-thirds of the largest 200 companies in Russia use Enforta in some capacity, and the company’s service footprint includes over 200 cities with an aggregate population of 70 million people.
More than 7,000 airMAX devices are now deployed on Enforta’s fixed wireless network. The company is averaging 1,500 new installations per month with 20% year-over-year revenue growth and Enforta’s plans include a near-term expansion of airMAX to another 150 secondary cities. Using airMAX, Enforta is able to support networks in Russia’s harsh weather conditions in areas like Siberia, as well as rely on the quality and affordability of Ubiquiti products for cost-effective market expansion to underdeveloped territories throughout the country.”
Read more at:
http://www.marketwatch.com/story/enforta-deploys-ubiquitis-a……
AnandTech on Ubiquiti’s fixed wireless broadband solutions
“One of the most interesting product lines from Ubiquiti is their fixed wireless broadband lineup. The airMAX, airFiber and EdgeMAX products helps Wireless Internet Service Providers (WISPs) to provide broadband access to remote and sparsely populated areas (think of outposts in Alaska with populations in the hundreds or low thousands). Laying wired cables to such areas might not make economic sense and this is where Ubiquiti steps in. Fixed wireless broadband providers have rapid ROI since they do not require trenching and can also be deployed in areas with limited infrastructure.”
The WISP business is still a niche market, but analysts predict that it is growing at a 21.8% CAGR through 2017. This represents a $5.9B revenue opportunity for service providers next year.
Read more at:
http://www.anandtech.com/show/7445/ubiquiti-networks-introdu……
Raving fans
I poked around the web and found some interesting discussion from Spiceworks network. Appears their products have raving fans! Lots of strong positive comments about good technology (reliability, performance etc) and also about their cost being significantly less than the next door competitors.
Note: I don’t know how regarded Spiceworks is among the IT gurus.
http://community.spiceworks.com/topic/388720-jumping-into-ub……
http://community.spiceworks.com/product/41183-ubiquiti-netwo……
Anyways, I 'm still on the fence. Still undecided on whether this one has the potential to be a 2 or 3 bagger from here on, given its a bit of a nice market play.
Anirban