Wireless data and M2M drive positive results
Results from two companies show the way the industry is heading at the moment – with both benefiting, albeit in very different ways, from increased demand for mobile broadband and data services.
First off, Acme Packet, which hit record second quarter revenues of $53.3 million recorded total revenue for the first six months of 2010 was $104.4 million compared to $63.8 million in the same period last year. This was enough for it to revise its 2010 outlook to a projected revenue of $214-218. Its last guidance, given in April, stood $10 million below that number.
Acme said that demand for its session border control products has been fuelled by a “perfect storm of voice,video,image and data flooding networks which weren’t designed to handle it”. Telcos the world over are undergoing a $125 billion upgrade to deal with this storm, Acme said in a note to Mobile Europe.
Also feeling good about itself is Sierra Wireless, who also reported a record quarterly revenue – of $159 million. Sierra, which markets embedded wireless modules as well as USB modems, and M2M services, said that revenue was driven by “strong” demand for M2M and mobile computing products in the quarter.
In fact, of the $159 million, M2M revenue increased to $83.6 million, up 53% compared to $54.6 million in second quarter of 2009. CEO Jason Cohenour said this M2M growth was “exceptional”.
Mobile computing revenue was $75.5 million, down 6% compared to $80.7 million in the second quarter of 2009, but up 21% sequentially from the first quarter of 2010.
Although revenue is increasing for Sierra, results also showed the margin pressures in this market. Sierra’s 2Q net loss was $8.6 million compared to a net loss of $5.9 million in the second quarter of 2009.
In revenue terms, Sierra’s results make contrasting reading from Option’s, a competitor in USB modems, data cards an embedded modules.
Option, during the first quarter of 2010, generated revenue of €13.1 million, showing a marked decline from €50.8 million in Q1 2009 and €76.8million in the first quarter of 2008. Unlike Sierra Wireless, Option doesn’t have an M2M business to build on, and has seen its market share in modems and data cards undermined by Chinese competitors.