The Weekly Sample

Articles and News

We've moved to a different email list manager in an effort to ensure proper delivery to subscribers who were missing the letter as a result of agressive spam filtering. If you are receiving this weekly message for the first time, and no longer wish to, an unsubscribe link is at the end of this email. "The Weekly Sample" is a once-a-week financial-focused summary of news related to the Networking Component and Equipment marketplace, published by Nyquist Capital.

The big news here this week was the wider recognition that Entropic faces strategic issues as a result of Broadcom entering the GPON chipset marketplace. As we first reported here (see "Broadcom Enters FTTH Chipset Market"), 60% of Entropic's revenue is at risk as a result of Broadcom delivering an integrated GPON/MOCA solution to Alcatel for use in Verizon's FiOS deployment. Entropic is a good company with great technology but is dependent on a single customer, and Broadcom is using GPON as a wedge to enter the MOCA business at their expense. Check out our piece on Broadcom/Entropic, published on July 3rd, and you can understand how something like this happens.

Andrew is on vacation for the next two weeks but reachable via email and mobile.

Links

dailywireless.org » Sprint Rolls Out Home Femtocells

Nice overview of Carrier femtocell activity. Based on Sprint’s pricing I don’t think people will save much money by cutting their landline and switching to wireless full time. Bad for us, good for Sprint.

Lightwave - CIR: Telecom transponder/transceiver market to net $4.8 billion in 2013

There is no way the market will grow this fast, though I hope I’m wrong.

Asia dominates global FTTH rankings - fibresystems.org

Asia has 27M of the 32M FTTH connections. The US makes up the bulk of the rest with 3.3M, and is growing the fastest. Take THAT Viviane Reding.

Bloomberg.com: Optimists Buy IPhones While Pessimists Hoard Gold

Very funny.

First We Save Fannie Mae and Freddie Mac, Then We Destroy Them. - Op-Ed - NYTimes.com

Great quote: "Instead of being regarded as too big to fail, we should look at them as too big to liquidate quickly."

dailywireless.org » Sprint Sells Tower Sites

Transactions like this are fun. Looks like your average Cell tower site is worth $200k.

Barron’s Online : Verizon: Q2 EPS Beats; Revs Light; Wireline Crumbling

Over 1 in 10 landlines disconnected in last 12 months. Only added 52k net broadband subscribers, even with the compelling FiOS product. Net FiOS adds up only 6% while footprint expanded 33%.

Nyquist Sector Performance

Motorola reported better than expected earnings and clawed back some recent losses. No idea if this is a sustainable trend. XO continued it’s volatile trading trends and rallied on news of a debt restructuring.

Arris, after warning two weeks ago of weakening carrier VoIP deployments had a well received earnings release. Short term trends show Verizon and AT&T reporting abysmal DSL growth while Cablecos (Comcast, Time Warner) are showing decent broadband deployment growth. No idea as of yet what is behind these contradictory trends. Nothing material has changed with Cable vs. DSL on a technical or financial basis and this contradiction is puzzling. Readers are welcome to submit any ideas.

MRV had a good earnings release and Occam Networks had another good week on the back of last week’s big gain. It appears liquidity is flowing into this thinly traded stock based on the potential from their Fairpoint deployment. (see “Fairpoint and Occam Networks”)

Ikanos now sells for less than cash value. Someone who chooses to sell Ikanos now is essentially saying DSL is dead, which is something we don’t believe. There is concern they are overly dependent on NTT's VDSL use in FTTH deployments, something some think is going away.

Avanex continued it’s decline following the forced departure of the CEO.

Atheros and AMCC volume picked up around their earnings release. Acme Packet traded heavily again- it was on the list last week too. After performing poorly it appears shares are moving from weak to strong hands.

To learn more about the Nyquist Index, including historical performance and what companies are included, please visit the dedicated page for The Nyquist Small/Mid Cap Index. It identifies the companies that make up the Nyquist Index universe and the methodology behind the calculation of this benchmarking tool.