Intense microwave equipment market transformation will continue in 2015

Intense microwave equipment market transformation will continue in 2015

Microwave industry is transforming as new buyouts replace existing players with fresh ideas and strategies. Chipmakers that could enhance the MIMO functions of radio devices could be among the 2015 acquisition targets. Also, small companies and specialists acquisitions that could improve the leading microwave vendors’ solutions and services, are expected, maintaining the 2014 trends, analyzed in the rest of this note.

Early in 2014, Exalt Wireless announced that it had completed a successful management buyout of the assets of Exalt Communications from its previous investors. New products positioning and strategies should be expected in 2015, as very often then management team is the one that sells better than the product itself.

No matter the slow small cells development, the leading vendors continued and will continue to invest into acquiring new companies to improve their product protfolio. The value chain will consolidate over the coming years following a string of acquisitions by the leading industry players. Nokia Networks completed the acquisition of Schaumburg, Ill.-based SAC Wireless, a wireless network equipment installation specialist. Prior to that, the company acquired Mesaplexx, which provides filter technology that can be used to reduce the size, weight and cost of active antenna or compact small-cell systems.

Ericsson, no matter the 2014 flat revenues, appears to be increasing its focus on networks and software, moving away from devices and chips. Ericsson’s shopping cart relies on cloud management (Sentilla and Apcera acquisitions) and media (Fabrix acquisition) solutions.  Huawei on the other hand prefers to invest into the IoT future and the M2M communications, acquiring an internet-of-things networking firm Neul. Earlier this year, Huawei has acquired Australian company Fastwire, in an attempt to accelerate its capabilities in OSS.

Alcatel-Lucent is among the leading small cell vendors with a serious activity, adding recently a sub-6Ghz wireless backhaul solution for non-line-of-sight (NLOS) small cell deployments in built-up, urban locations. However all vendors know that the outdoor market won’t take off until operators find solutions to deployment challenges and outdoor hurdles, including backhaul and site acquisition. For example, when Alcatel-Lucent was deploying small cells in Chicago, it was taking up to 120 days just to get the permit.

Earlier in 2014, Alcatel-Lucent announced that is in talks to sell its enterprise unit to technology investment company China Huaxin. Alcatel-Lucent closed the deal in Q32014 (keeping approximately 15% of the enterprise unit) for US$254 million selling its IP telephony and Ethernet switching equipment activities as part of its Shift Plan to sell noncore assets. Qualcomm (QCOM) had made a $130 million investment in Alcatel to develop products together for the small-cell base station market. Alcatel and Qualcomm are jointly building multimode cells that would connect to the Alcatel-Lucent radio access network and small cell chips from Qualcomm.

As Paolo Volpato,  Product Strategy Manager at Alcatel-Lucent, added regarding the vendor’s overall vision, “today the mobile network operators are looking for a vendor with a strong capability in professional services as well as a very good product, with a simple management platform” which is really the case as the  operator’s main target target is to increase network’s performance and services’ simplicity than complexity with highly effective solutions.

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