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Tuesday, May 01, 2012

Network Bandwidth Crisis & How to Profit

With all the new smart phones and tablet computers placing new demand on internet bandwidth, there is a shortage brewing.

Here are some excerpts from my current newsletter.
  • I still expect AT&T & Verizon to start spending less on 4G LTE wireless front end and less on the networks to tie their systems together soon. They have good coverage, but the networks are often far too slow. ATT raised the cost of my landlines nearly 20% ($3 each) which will give ATT cash to add capacity to their network. Finisar’s Chairman Jerry Rawls said he expects these “backhaul investments” to catch fresh tailwinds soon; "By the time we have [our new line of ROADM connection cards] finished and designed, carrier spending has to be coming back. The networks are becoming too loaded. They're going to have service-level problems if they don't start upgrading capacity."
  • While driving through San Jose on the way to a fishing trip in Monterey with my brother, he used his iPhone to set up a Skype video chat with our other brother who was on his PC. He put the phone on the dash over my navigation unit so the other brother could see us both and I could look forward to drive. It was very cool.
  • I have an 18-month old HTC/Android smart phone (MyTouch 4G) so it is fun to compare it with my brother’s new iPhone 4s. We found Apple continues to be a bit behind leading edge but what they do, they do very well. With minor technology differences between these two phones, what we found most important is the annoyance / disappointment we had when there was not enough bandwidth to use the applications we compared such as using GPS to see where we were when hiking around 17-mile drive. We also got stuck in traffic in a small town and neither phone showed it as if there was a blackout for the area. We couldn’t get traffic updates at all there which was very annoying. If I lived and commuted this route daily, I would complain to my carrier about the lack of coverage. Good opportunity!

I hope I have my portfolio well positioned to take advantage.

Smartphone vendors:
Apple, HTC, Nokia, Motorola/Google, Samsung, etc.

Kirk Lindstrom's Investment Letter Performance

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