Sterne Agee’s Shaw Wu this morning wrote that Cisco Systems (CSCO), whose stock he rates a Buy, can look forward to growth in sales to telco customers this year based mostly on their deployment of faster 4G wireless networks, most of them using the “Long Term Evolution,” or LTE, flavor of 4G.
“4G deployment has been somewhat disappointing so far,” concedes Wu. “But we believe 2012 could prove to be a key year for growth. We see the 4G LTE build-out driving a multi-year product cycle that will likely extend out to 2014-2015 and perhaps beyond.”
There’s a direct payoff for Cisco, he argues:
We estimate this could have a positive impact on 25%-30% of CSCO�s business that is service provider related. CSCO is arguably already seeing some benefit with service provider orders growing 16% Y/Y in the October quarter, making it the strongest among its five end markets.
Interestingly, though there are already 4G phones on the market from numerous vendors, most if not all of which run Google’s (GOOG) “Android” operating system, Wu is looking forward to Apple’s (AAPL) introduction of an iPhone running LTE to be a key element this year.
The key reason for the excitement is that some believe and our supply chain checks indicate that this is the year where AAPL could have an iPhone with 4G LTE. Sure, HTC, Samsung, and Motorola have shipped smart phones with this technology but have been plagued with battery life issues, as well as spotty network coverage. In addition, none have been able to drive the same type of high volume and broad customer adoption that an iPhone with 4G LTE could have.
Wu also has a Buy rating on shares of Apple.
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