Morgan Stanley analyst Mary Meeker spoke about mobile Internet-connected devices at the Web 2.0 conference in San Francisco. She expects that we are at the beginning of a massive technology revolution of the mobile Internet, led by Apple’s mobile devices the iPhone and iPod Touch, two devices with the highest growth rate ever in the history of new launches.
According to Meeker, the revolution will be ten times greater than the desktop Internet revolution, and it is expected to grow at a much faster pace. Surrounding the revolution, all of today’s wireless technologies will flourish WiFI, GPS, 3G, Bluetooth, and others.
One of the Israeli companies that is connected to mobile Internet technology is Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT). In line with Meeker’s predictions about growth in mobile Internet, it is known that the cellular network infrastructure, especially in developed countries like the US, won’t handle the expected traffic burden without massive investment over the next few years, and Ceragon has a lot to offer in its niche.
On Thursday, network chip maker EZchip (Nasdaq: EZCH) will report results, and I expect that for the first time in the company’s history it will move to double digit quarterly revenue of over $10 million. In the second quarter, there was a drop to $6.7 million, after its largest customer, Juniper Networks (Nasdaq: JNPR), temporarily halted orders and used up the chips in its inventory. In addition, it turned out then that Juniper planned to use self-developed chips, rather than EZchip’s, so that in a few quarters, Cisco through Marvell will become EZchip’s biggest customer.
The interesting thing is that in parallel with EZchip's results on Thursday, Juniper is holding a press conference with announcements of new launches to mark the share's move from Nasdaq to the New York Stock Exchange, under the same symbol. In honor of the event, it is even unveiling a new corporate logo.
It is expected that as part of the announcements, it will introduce its new network chip. Juniper developed the chip itself, and it will replace EZchip's products. Apparently, that is the reason for the weakness that EZchip's share has displayed recently. According to the Forbes website, Juniper executives describe the new launches, which will include a new software platform as well, as "the most significant since the company was established 12 years ago."
Experience with Radvision Ltd. (Nasdaq: RVSN; TASE: RVSN) has taught us that to be dependent on Cisco as a customer with an share of tens of percentage points of annual sales is quite dangerous. On the other hand, it is even more dangerous - for Cisco - to be dependent on EZchip's processors as the main engine for all its most important routers.
There are those who say that the divorce between Juniper and EZchip are not based on superior technology that Juniper found in its own company, but by the fears that one day Cisco will have to buy EZchip, leaving Juniper without a processor supplier.
Published by Globes [online], Israel business news - www.globes-online.com - on October 27, 2009
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