Too bad this article makes no mention of DMIC...
Its a bit irksome that NTRO gets so much press; and they
could have mentioned Ensemble Communications Inc as well.
Lets not forget that DMIC has 655 Mbps fixed wireless
products under development that they will roll out in
the not-too-distant-future. Not only will these provide
the highest-capacity most-spectrum-efficient solutions
for the mobile backhaul market (which isn't served by
products from NTRO and others), but it will also come
in a point-to-multipoint variant which is ideally suited
for the fixed wireless access market. Competing products
will be far less attractive because they won't offer
the capacity or spectrum-efficiency of DMIC's products.
Rob
=========================================================
Tuesday June 20, 10:32 am Eastern Time
TheStreet.com - Silicon Valley
What's Shakin With Zakin? The Man Who Spotted Palm Has a
New Start-Up
Western Multiplex lacks the sex appeal of Palm or Handspring,
but has a solid team for a wireless rollup.
By Adam Lashinsky
Silicon Valley Columnist
Venture capitalists always say that the biggest factor they
consider when funding a company is the quality of the
management team. Well, public investors all fancy themselves
venture capitalists now, and solid talent at the top is often
trotted out as the reason the public should consider a hot
start-up that's going public before it's fully cooked. The
stellar duo of Palm (Nasdaq: PALM - news) handheld-device
creators Jeff Hawkins and Donna Dubinsky , for example, is
one of the best attributes of the upcoming initial public
offering of Handspring, a company that has sold its
consumer-focused product device during only one holiday season.
Well, it turns out there's another, less risky way to bet on
the management team that made Palm a success. Jonathan Zakin,
the fellow who rescued Palm when it was a private company in
search of cash by purchasing it for U.S. Robotics (later
purchased by 3Com (Nasdaq: COMS - news) is piloting
something of a start-up himself these days.
It goes by the decidedly unsexy name Western Multiplex .
(Memo to J.Z.: Lose the name.) But the Sunnyvale, Calif.-
based start-up is in the potentially red-hot field of
broadband wireless access, equipment that allows cellular
carriers and big businesses to set up high-speed networks
without digging holes and planting poles. And wouldn't you
know, Western Multiplex is attempting an IPO of its own, one
with markedly less fanfare than Handspring's (and Palm's
before it), but with similar potential.
For a lesson in IPO sex appeal, consider the following:
Handspring, backed by Benchmark Capital and banked by Credit
Suisse First Boston , aims to offer itself to the public at a
valuation of about $2.3 billion. Its most recent quarterly
revenue, which more than doubled sequentially, was $34
million and generated gross margins of 32%. It isn't yet
profitable. Western Multiplex, bankrolled by Zakin and an
obscure group of merchant bankers, is valued at about $525
million, is profitable and recorded first-quarter revenue of
$17 million (up 9% sequentially) and gross margins of 55%.
Fixed wireless systems have been around for a while, but
haven't really taken off. Their main disadvantages are that
the equipment must have a clear line of sight between
components (sometimes requiring installers to use third-party
roofs or poles) and that bad weather can foul things up.
Still, like everything else having to do with the Internet,
fixed wireless offers a badly needed solution to moving data
quickly from end users to the network. According to Western
Multiplex's securities filings, its systems are cheaper to
install than other services, require less time and can take
advantage of unlicensed radio spectrum. International Data
Corp. guesses that the U.S. market for services delivered by
broadband wireless will skyrocket from $767 million in 1999
to $7.4 billion by 2003.
If that's the case, Western Multiplex would benefit because
its customers -- which include established players like AT&T
Wireless (NYSE: AWE - news) and Nextlink Communications
(Nasdaq: NXLK - news) and upstarts like VoiceStream Wireless
(Nasdaq: VSTR - news) and Western Wireless (Nasdaq: WWCA -
news) -- would benefit. The company also plans, through the
recent acquisition of a seven-person (six-engineer) firm in
Petaluma, Calf., to offer equipment that will help businesses
establish wireless networks within co! rporate campuses.
Western Multiplex is in registration with the Securities and
Exchange Commission , so it can't publicly discuss its plans.
But in a February interview, Zakin made it clear that he
intended to make Western Multiplex something of a roll-up for
the fixed wireless industry. A big reason for going public
now is to create a currency for acquisitions. (Of the nearly
$79 million the company hopes to raise, $22 million will go
to pay back bank loans.) The competition is fierce but
fragmented as fixed wireless is a small part of the business
of giants Alcatel (NYSE: ALA - news) , Cisco (Nasdaq:
CSCO - news) , Ericcson (ERICY:Nasd! aq ADR), Lucent (NYSE:
LU - news) and Nortel (NYSE: NT - news) as well as a focus of
smaller companies, including Adaptive Broadband (Nasdaq:
ADAP - news; formerly California Microwave), P-Com (Nasdaq:
PCMS - news) , Proxim (Nasdaq: PROX - news) , Netro (Nasdaq:
NTRO - news) and Wi-LAN .
What's more, plenty can go wrong with this business. It
suffers from declining prices and periodic component
shortages. And Western Multiplex's so-called point-to-
multipoint product to create a hub-and-spoke wireless network
is still in development.
So the bet here is on fixed wireless being big and, of
course, on Zakin. Together with partners at Ripplewood
Holdings in New York (best known for taking control of the
Long-Term Credit Bank of Japan ), Zakin controls 94% of
Western Multiplex, formerly an orphan unit of wireless
services company Glenayre Technologies (Nasdaq: GEMS - news) .
Zakin has kept much of the previous management but packed the
board with a combination of cronies and financial big shots,
including former U.S. Robotics executive Michael Seedman,
former Bush administration economics adviser Michael Boskin,
investment banker Stanley Shuman of Allen & Co. and Peter
Crisp, formerly a venture capitalist with Venrock , the pet
venture-capital firm of the Rockefeller family.
Because of its relatively slow growth to date, Western
Multiplex isn't being positioned as a go-go IPO. But for
investors who want proven management and promising
technology, give this under-the-radar-screen company a look. |
