Happy,
Ubnt is in the nuts and bolts. Most of us I imagine have wifi in our homes. Ubnt is extending that to communities and enterprises. On the backend they keep improving being able to get back to data centers without having to lay, or rent fiber lines.
This just isn’t true. While it is technically possible that they could do this as long as it is in line of sight what they normally will do is lease a data circuit from another company lec, clec, or cable company and this circuit will go to wherever they are putting their airmax, tower, dish at. The company that is bringing this circuit in will, today, usually use ethernet, meaning it will be delivered on fiber. The device that they bring it in on will then allow either a fiber or electrical handoff which would then be delivered to UBNT’s equipment. They usually put the airmax on a building or tower that is tall enough to reach the next hop ie ubnt tower. The circuit they lease in this configuration can go from 10 meg to 1 gig. While the company that is running the Ubnt equipment will have to lease the circuit it is still much cheaper than running their own fiber to that tower or building.
BGM
These satellites will feed the POP not the end user.
This is incorrect. Google does not care to feed the POP. They want to feed the individual or business. This is my opinion is just another form of loon.
Brittlerock
UBNT has a disruptive business model. That is their competitive advantage. Products will come and go in rapid succession as technology advances. Network strategies and methods will change as well. You can count on it. So long as UBNT can address user requirements with minimal R&D and essentially no sales force while continuing to provide innovative products at prices that undercut the competition they will be a growing concern.
If the business model breaks down for some reason (can’t scale, too many conflicting requirements, etc.) they may get into trouble, but Google and Space-X provisioning universal internet connectivity pose absolutely no threat. In fact, IMHO, this would be a boon to their business rather than a detriment.
I agree with everything you are saying here except for that Google and Space-X being no threat. Why? You are trying to say that I shouldn’t be worried about Larry Page, Sergey Brin and Elon Musk trying to bring internet to the masses. I believe they will be doing this to provide everyone in every developing country with internet access.
Lets go back to the question that started this thread.
Would this be significant competition for UBNT?
I say yes and I will explain this. While Neil states that this is a tailwind risk and I can understand why he isn’t worried about it today, neither am I, I disagree that it is a risk that should be ignored.
First of all we have some of the brightest people trying to bring this to fruition, we also know that google is putting a large amount of money into similar ideas. (Loon, Google Fiber) While I do not see this is an immediate risk it is something I want to watch just like Loon.
It all goes into how fast a connection they can supply from these satellites and if they will be using public airwaves (I doubt they can). Lets say they can get the latency to 30 ms (which would be comparable to land based internet) and they can provide speeds up to 1 gig. Then UBNT would be shot. The reason for this is that they could reach any home, any building, anywhere. This really is the holy grail. Because they do not have to provide maintenance on cable, fiber, dishes, or ground equipment. How many business’s can compete with that? How could UBNT’s customers compete when they have to go back out realign dishes, replace cable, work on routers and all the general maintenance required for their equipment. As long as the Satellites stay up they will be providing service. As far as it being secure. It would be just as secure as what UBNT does after all they are sending their data across the public airwaves, although it is encrypted so would the satellites be.
I am long UBNT and I believe in the CEO. I like that he is looking at this company with a longer view than most CEO’s. I believe he will triple our money in 3 years but I can also see another company coming in and disrupting UBNT. It’s like Brittlerock said products come and go and there is nothing to say that UBNT has to be around forever. Its a good idea to keep an eye on the competition and if someone comes in with a Data connection, that is alot less expensive, that can reach all of their business, campus or home locations, it would be a mistake not to be leery of them.
Andy