New WiFi Standard 802.11ac Bullish for Qualcomm (QCOM), Skyworks (WKS) and RFMD (RFMD) - Analyst

November 13, 2012 12:49 PM EST
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Analysts at Oppenheimer are bullish on new IEEE WiFi standard 802.11ac and its implications for supply chain companies, Qualcomm (Nasdaq: QCOM), Skyworks (Nasdaq: SWKS) and RFMD (Nasdaq: RFMD).

802.11ac is the latest standard to be adopted by home router, notebook, smartphone and other equipment vendors. It's a "significant leap forward" in data rates, Oppenheimer tech analyst Ittai Kidron notes. "Consumers will immediately see the benefit of faster downloads, better coverage at home and about, and more services. Equipment vendors should see new markets open up, especially those around bandwidth intensive applications such as video." The biggest beneficiaries may ultimately be mobile carriers, he said. They'll be able to effectively leverage 802.11ac small cell networks to offload data traffic on their congested 3G and 4G cellular networks, he notes.

"We see the 802.11ac transition, which just started mid-2012, as a strong growth/total addressable market (TAM) expansion catalyst for Skyworks and RFMD that could more than double their WiFi opportunity due to increased attach rates and greater RF content than previous WiFi generations," Kidron states.

The analyst said smartphones could have $2-$3 of WiFi content, while stream router/APs could have double or triple the RF content at $6-$9 or more per device.

For all three, 802.11ac adds incrementally to sales in 2012 and should be a strong catalyst in late 2013-14 as 802.11ac hits its stride.

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