To: Sepster who wrote (1765 ) 8/28/2000 10:27:21 PM From: Sepster Read Replies (1) | Respond to Interesting mention of Inktomi as a monster stock in wireless infrastructure:zdnet.com Infostructure Our favorite play here is InfoSpace. Its proprietary information network allows users to access important data from cell phones and conduct mobile e-commerce. The company has reselling agreements with virtually all the major wireless service providers and is service agnostic: It makes money no matter what service consumers choose. InfoSpace's business model is scalable: It earns an incremental profit every time someone needs a yellow pages listing, checks a restaurant recommendation, or orders flowers. This makes InfoSpace's profit margin expand as revenues go up.Infrastructure More than $100 billion will be spent on the 3G upgrade. Nokia, Ericsson, and Motorola lead the 3G build-out contest. But don't count out Nortel Networks. It has just beaten Motorola out of a new $500 million contract and will win more. A sleeper in this space is Inktomi. Inktomi is positioning its dominant Internet traffic–caching system to take advantage of the tremendous growth in wireless. Its technology enables data transfers through wireless devices, the same way that it does through the Internet. Move further down the component food chain and you get the dominant base-station power amplifier player, Powerwave Technologies. And when it comes to the microwave equipment on top of the tower, you can bet that Anaren probably made it.Understructure Open up a Web-enabled wireless device and you'll see high-speed chips, digital signal processors, capacitors, and transmission chipsets. Our favorites here in high-speed gallium arsenide chips are RF Micro Devices and TriQuint Semiconductor, as well as the CDMA chipset monopoly Qualcomm. Go inside 70 percent of all wireless chips and you'll find ARM Holdings chip design—for which the company is paid a royalty on every sale. The dominant player in integrated chipset cores is Wavecom, which virtually has a lock on every phone Nokia and Samsung make. Go over to Ericsson and roughly two out of three phones contain an Anadigics power amplifier. Finally, the LCD screen is made by Three-Five Systems. Three-Five Systems is backlogged for up to a year for traditional displays; when 3G comes into play the company will prosper greatly and have much better pricing power.Infrastructure Service Providers Our favorite in this space is Wireless Facilities. Somebody has to actually build these networks, and it's not the infrastructure players. Wireless Facilities oversees everything from network planning and design to construction and maintenance. The company is doubling revenue and earnings over the most recent quarters and has doubled backlog contracts as well. Another way to play this game is with the companies who lease the towers. Our pick here is Crown Castle International because it has a footprint in both the United States and Europe. Crown Castle stands to benefit most from 3G deployment.
