SWIR and IoT

Another reason to not own SWIR…
http://news.investors.com/technology/112715-782716-nxpi-avgo…

Four chipmakers heading to the altar are among companies likely to be in “the best position to win” the Internet of Things “revolution,” a Wall Street analyst says.
NXP Semiconductors (NASDAQ:NXPI) and its pending merger partner Freescale Semiconductor (NYSE:FSL), along with Apple (NASDAQ:AAPL) supplier Avago (NASDAQ:AVGO) and its fiancee Broadcom (NASDAQ:BRCM), are among the semiconductor manufacturing beneficiaries as the industry races to connect more devices and other things to the Internet, wrote Needham analyst Rajvindra Gill in a preliminary report slated for release early next week.

"The Needham semiconductor research team believes the (semi) industry is now entering a fourth phase: wireless connectivity everywhere or Internet of Things (IoT).

http://stockcharts.com/freecharts/candleglance.html?swir,avg…

Avago to release earnings after hours Wed.

I’m sorry Pete, but I don’t get it. Why is this a bad omen for SWIR?

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Invest wisely my friends
CMFSoloFool
Ticker Guide: NTGR and OTEX

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Well, if other companies are in the “Best position to win” then that is a bad omen in my book. I am a Miami Dolphins fan, the fact that the Patriots are in my division is a bad omen and I would not put money on Miami to win it :wink:

if other companies are in the “Best position to win” then that is a bad omen in my book

When reading articles, reports, etc. it is important to keep in mind that the author has no fiduciary responsibility to the audience. In fact, they have no responsibility to be truthful or accurate or insightful. When one gets paid to write, something will be written. Quality beyond some minimum standard is not required.

This is not an indictment of the original article (and for all I know SWIR may be a long-term loser), but of financial journalism in general.

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Well Pete, we’re both Dolphin fans, and the Patriots are rather strong, so I’m with you thus far.

However, IoT is a very broad and very large market. There are lots of different companies focusing on different aspects of the market. SWIR specializes on embedded systems, gateways and device-to-cloud connectivity and management solutions. They are not alone, certainly, and obviously everything technology related can succumb to a better mouse trap, i.e. Blackberry’s demise. But I think it is a bit premature to pronounce their downfall just yet.

Just because other, larger, companies play up the IoT hype doesn’t mean they are taking over or driving SWIR out of business, in fact some of their products may actually be complementary. I wouldn’t be surprised if some of these companies aren’t already supplying parts to SWIR.

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Invest wisely my friends
CMFSoloFool
Ticker Guide: NTGR and OTEX

2 Likes

Pete,

I took a slightly deeper dive and did some research on each of the companies mentioned in the IBD article; NXPI merging with FSL, and AVGO merging with BRCM. While IoT is on their marketing and they have investments related to IoT, their overlap with SWIR is minimal. I don’t see how either of them will be much of a threat to SWIR.

For the most part, these four companies are semi-conductor companies, they manufacture chips. NXPI makes a very broad set of chips, sensors, controllers, diodes, switches, and of course their bread and butter product - the NFC chips in most phones. They are acquiring Freescale, which is very focused on ARM microprocessors, and some low-level connectivity products, mostly bluetooth. I can see some synergies between them.

Avago manufactures a variety of power amplifiers, filters, PCIe switches, duplexers, multiplexers, fiber optic trans/receivers, optical sensors, couplers, and such. They are merging with Broadcom, which is largely focused on 802.11 WiFi chips and Bluetooth chips used in many products. They would be complementary to each other, so it seems like a good merger.

As to how this affects SWIR, I don’t see a great deal of overlap here, unless the newly merged companies are going to bring all those chips together to develop complete systems, and change focus from low-level BT and WiFi to cellular connectivity. I would bet Sierra is already a buyer of chips, sensors, etc. from these companies.

SWIR’s focus is on delivering complete cellular based connectivity systems. Their AirPrime embedded systems are designed to enable OEMs to add drop-in cellular connectivity for various industrial applications, particularly in extremely challenging environments such automotive, rail, marine, etc. for cloud based fleet tracking and communications.

Sierra’s ruggedized AirLink gateways are complete out-of-the-box (no programming) secure connectivity solutions for in/outdoor and in-vehicle industrial applications, with remote configuration and management capabilities.

Sierra’s IoT Acceleration platform provides all the connectivity hardware, the managed connectivity services, and the AirVantage cloud platform for complete end-to-end IoT deployment, including application integration in ERP, CRM and analytics applications. It also works with 3rd party hardware, not just Sierra’s products, and it also can be used on other cloud offerings from Google, for example.

There are many companies trying to get their own slice of the IoT market, and certainly there is a lot of hype around anything IoT related. But most companies are focused on the low-level challenges of getting things like wearables and appliances connected to the Internet, and low-power bluetooth and WiFi makes sense in most of those scenarios. That’s mostly consumer stuff.

Sierra is focused on large-scale, end-to-end industrial IoT solutions. They make complete connectivity and management systems and infrastructure for industrial and enterprise applications. For example, their products can be used to read electric power meters around the world, which are exposed to high heat, freezing temperatures, rain and snow. They enable fleet companies like UPS, FedEx, police squads, etc. to track location and monitor vehicle sensors. They enable rail companies to monitor the whereabouts and vital on-board sensors of rail cars all around the world, in the most adverse conditions. Sierra is not about making chips, they are about providing solutions to very challenging and complex problems. It is a much different company from NXPI, FSL, AVGO, BRCM or the many others touting IoT.

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Invest wisely my friends
CMFSoloFool
Ticker Guide: NTGR and OTEX

14 Likes

No opinion on SWIR or IoT, but a fellow lifelong Fins fan who also 1) wouldn’t put money on them; 2) believe sharing a division with the Pats is a very bad omen; and 3) wondering when the heck they’re going to get their act together. Sigh…maybe next year?

  • Matt