Race to SCALE: SMBs win as NOK reports CAPEX went elsewhere. Who wins?
In a quarter of flattish to upward CAPEX spend by telecoms, NOK says 'not me'.
So, who are the winners in the SMB telecom sector getting the IoT 4.5/5G sugar?
While there are ripe IoT 4.5/5G markets and early growing markets, the Race to SCALE is well under way.
National market results will skew early forecasts and future results will have adjustments, yet the simple truth is that SCALE at fab foundries and OEMs is going to be influencing future results.
On its own, little fabless firm SQNS doesn't have the cash to achieve SCALE economics to compete with the big OEMs and ODMs. It needs a heroic singularity to make the jump to the next phase. Perhaps Macron was able to ensure French tech will have equal standing with '5-Eyes' tech, but no one will have equal standing with USA brands in the USA market.
With QCOM and INTC now going head-to-head in several sectors including HPC and small cells and WiFi, it is Broadcom's turn to reinforce its USA credibility. Since BRCM/AVGO has already been the leader in the unlicensed sector of RAN and cable STBs, and since POTUS killed the M&A with QCOM and INTC has licensed QCOM tech from Rivet Networks and the early results were crippling user networks, it doesn't appear that a merger or buy-in between the three in unlicensed or cable is imminent if ever.
The market development that seems ripe for announcements is the addition of CBRS to routers and also the Set-Top Box market where BRCM/AVGO has already been the leader. And given previous announcements by Arris that plug-in modules are coming, this is a defacto statement to BRCM/AVGO that Arris wants to sell its new plug-in modules to ALL device ODMs, not just its own RUCKUS unit.
However, since Arris is a BRCM/AVGO customer you should expect that a future BRCM/AVGO STB SoC will include CBRS and other LTE-over-unlicensed silicon solutions. The question for this market is whose IP and Si will it choose? It won't be QCOM nor INTC nor SONY.
So there is a furious mad mad romancing under way behind the scenes. One hint could be the involvement of Israeli tech firms and State bank investors who have had exceptionally successful influence in the market for the last 4 years - far above their national GDP weight. Since Israeli tech won its early sale to SONY which won't win any BRCM/AVGO deal, that leaves an outward look to other small firms in RAN IC.
Some little firm is going to see BRCM/AVGO as its hero.
We will likely look back on this reporting season as a bell weather of future results.
IMO
Good Luck to the Board
extremetech.com
anandtech.com
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