Saturday, September 01, 2007

Untethered & mobile - Part 1

I have promised a few of you that I will be blogging soon on investments arising out of my own extensive research into cutting the cord. Where available, I will disclose any positions in companies mentioned.

First, here is the view from where I am blogging (while connected of course)
Real jaggies
I am on a ledge where the only visible living creatures are a few turkey vultures and gulls. The nearest road is a mile away. The views, breeze and sounds are incredible, and I can't think of a better place to be blogging from. Here is another view, one from the bottom of my shoes.

The connection I have is also fast enough to play a few Youtube streams concurrently (listening to, but not watching, this - more about this in a later post). There aren't any wi-fi providers around here for sure.

All this made possible thanks to cellular broadband, courtesy Cingular and Sierra Wireless (SWIR). The latter happens to be my single largest holding right now. It wasn't this large a part of my portfolio when I bought earlier, but the stock has more than doubled since my purchase.

I believe that we are still in a very early phase of rapid growth in wireless broadband and its applications. I say very early because even after being available for more than a year now, there is not much love for 3G in silicon valley.

The 3G alphabet soup gets more confusing every day, but there is at least some hope that one or more of these will be available in multiple continents, with widespread deployments within a year or two. Sierra Wireless makes the connection devices, like these Aircards.

Speeds, especially with the new HSUPA protocol, are reaching ever higher levels. So much so that speed isn't really a concern anymore.

Availability/strength of service is still a problem. Widespread rollout, by Cingular and Verizon in the U.S, should address that soon.

Sierra Wireless does have competitors, chief being Novatel Wireless (NVTL). While Sierra seems to have an upper hand so far, it is impossible to say who will be the eventual winner. Competition from lower-cost Chinese/Taiwanese players is a concern, but as long as there is constant new activity requiring new products or constant upgrades, Sierra and Novatel shouldn't have any problems on that front.

End-user products are the most visible, but the embedded product market may be much larger. Also enterprise products are beginning to be rolled out.

Both Sierra and Novatel are likely being looked at as targets by existing network connectivity device providers. I do hope that they don't sellout now, given the growth potential ahead. Traditional cellphone manufacturers are also getting into this market building the ability to use the cellphone as a 3G modem without the need for an additional card.

Competition to existing protocols comes in the form of WiMax, with Sprint (S) and Clearwire (CLWR) in a race to provide service in major markets. WiMax, along with 3G, is also making it possible for countries without legacy wired infrastructure to leapfrog into the broadband era (see earlier post). Clearwire, founded by McCaw, is a WiMax pure play and a very tempting target for all sorts of companies, from Sprint to Comcast and Google!


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