Seems that Wi-Fi is about to expand into yet another frontier as major Asian airlines just announced wide adoption of full Wi-Fi service.
Companies eager to play part in the expanding Wi-Fi market include Edgewater Wireless Systems Inc. (TSX.V: YFI), Texas Instruments Incorporated (NASDAQ: TXN), Cisco Systems, Inc. (NASDAQ: CSCO), Qualcomm Incorporated (NASDAQ: QCOM).
Following announcements this week by China’s leading airline and others, chip makers and Wi-Fi providers are licking their lips as the new expansion into airlines that could create further demand for Wi-Fi adoption and a large, new market.
This news plays heavily into service and technology manufacturers like Edgewater Wireless Systems Inc. (TSX.V: YFI), that provides a patented technology for use in high-density Wi-Fi applications like public spaces and convention centers. The company has unveiled its Aera™ access point line that uses the company’s patented WiFi3™ technology. The pair promise significantly improved Wi-Fi and increased connections in high traffic areas – like airline terminals.
Other companies focused on increased demand for chips and connectivity technology created by the advances include Texas Instruments Incorporated (NASDAQ: TXN), Cisco Systems, Inc. (NASDAQ: CSCO and Qualcomm Incorporated (NASDAQ: QCOM). The large international players have a significant stake in the future of the Wi-Fi space and web traffic.
SAY YES TO WI-FI IN ONBOARD
The “no mobile devices use on plane rule” that everyone finds so obnoxious looks set to tumble as more and more airlines move to provide passengers with Wi-Fi on flights. It looks like the days of enduring 17-hour flights with nothing to kill the boredom but repetitive boring movies on seat-back screens could finally come to an end.
This is not only good news to passengers, but also for tech companies and airlines looking to cash in on our attachment to mobile devices.
As airlines continue to revise their mobile use rules, provision of connectivity to passengers while onboard the plane has emerged as a growing priority among airlines. This should enable passengers to browse the internet the same way they would on the ground. In an age where people are increasingly reliant on their mobile devices and the internet for work and social interactions, inflight Wi-Fi definitely promises to pick up fast.
CHINA IS THE HOT MARKET
China is one of the hottest markets for airline Wi-Fi service, as only 23% of airlines in the country have in-flight Wi-Fi, compared to 78% of US airlines. Even where connections do exist, internet speeds have been incredibly poor, so many telecom companies are beginning to sense an opportunity in this sector.
China Unicom, the second largest telecoms provider in China is one of the companies looking to capitalize, having announced plans to demonstrate high-speed in-flight Wi-Fi capability next month.
According to a statement from the company, the service would be run through a joint venture with other partners, under the umbrella of Unicom-Airnet. The company has built what it calls the largest satellite communication in Asia to power the venture.
Since 1999 China had been restricting electronic device use on planes over safety concerns, but since October 1, airlines are now allowed to take over decision making on that front.
Estimates by Carnoc.com put the Chinese inflight Wi-Fi market at $1.78 billion by 2020.
CERTAIN TO BE A CASH COW
Inflight Wi-Fi promises to be a cash cow, not only for companies providing the technology, but also for airlines. Passengers are increasingly embracing pay-to-use Wi-Fi. Airlines are therefore looking to cash in on this gaping opportunity.
Cathay Pacific Airlines from Hong Kong is partnering with Gogo to provide inflight connectivity on its Airbus A330 and Boeing 777 planes starting in mid-2018. Emirates Airline is working with Thales to provide Wi-Fi speeds of up to 50 Mbps on its Boeing 777X airplanes.
In the US, carriers like JetBlue and Delta Air Lines are leading the way.
In January, JetBlue unrolled its Fly-Fi service, a free inflight internet service for its passengers on all its planes. Delta also began offering free internet on all its aircraft starting October 1, allowing passengers to access various messaging and social media platforms.
EDGEWATER’S WI-FI A SMART FIT
Edgewater Wireless Systems is an emerging Wi-Fi innovator that’s perfectly aligned with providing the next stage of Wi-Fi.
The company designs and patents new solutions for Wi-Fi and connectivity in high-density applications where people need broad access to Wi-Fi. Edgewater has addressed the three big issues that impact Wi-Fi performance —interference, capacity and density.
Edgewater Wireless has just recently begun introducing its patented WiFi3™ technology in various products including Aera™ brand connection point devices. Their system uses a totally unique approach, incorporating multiple radio channels in a single chip to increase connectivity by as much as 40% compared to current Wi-Fi.
The patented system is one of the conduit technologies to creating a seamless Wi-Fi connected world.
Edgewater Wireless Systems is already garnering the respect of big peers in Wi-Fi. The upstart company is looking to to assure Wi-Fi’s lead role in the future by improving access and creating higher standards for all Wi-Fi.
MORE SPEED PLEASE
Cisco forecast that by 2021, 63 percent of global mobile data traffic will be offloaded onto Wi-Fi networks and not use mobile ones.
“By 2021, 29 percent of the global IP traffic will be carried by Wi-Fi networks from dual mode [mobile] devices,” Cisco states.
Beyond what we already account for, Wi-Fi is also expected to handle mobile network offloading for many future IoT devices, they noted.
Due to speed limitations, bandwidth intensive activities like streaming and photo sharing remain beyond the capacity of most current inflight connections. Internet providers see this as another entry opportunity.
Companies like Netflix have plans to provide upgrades to existing technology. Netflix has already announced plans to partner with airlines to use its mobile technology to introduce superfast Wi-Fi for passengers.
The challenge for companies like Edgewater Wireless Systems will be to provide better, faster and cheaper Wi-Fi solutions assuring the growth and longevity of these new lucrative markets.
POTENTIAL COMPARABLES
Texas Instruments Incorporated (NASDAQ: TXN)
Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. The company operates through two segments, Analog and Embedded Processing. The Analog segment offers high volume analog and logic products for automotive safety devices, touch screen controllers, low voltage motor drivers, and integrated motor controllers; and power products to manage power requirements using battery management solutions, portable power components, power supply controls, and point-of-load products. The company markets and sells its semiconductor products through direct sales and distributors, as well as online. Texas Instruments Incorporated was founded in 1930 and is headquartered in Dallas, Texas.
Cisco Systems, Inc. (NASDAQ: CSCO)
Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol (IP) based networking and other products related to the communications and information technology industry worldwide. The company offers switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, wireless access points, and servers; and next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice, and video applications. The company sells its products directly, as well as through channel partners, such as systems integrators, service providers, other resellers, and distributors. The company was founded in 1984 and is headquartered in San Jose, California.
Qualcomm Incorporated (NASDAQ: QCOM)
QUALCOMM Incorporated develops, designs, manufactures, and markets digital communications products and services in China, South Korea, Taiwan, the United States, and internationally. The company operates through three segments: Qualcomm CDMA Technologies (QCT); Qualcomm Technology Licensing (QTL); and Qualcomm Strategic Initiatives (QSI). The QCT segment develops and supplies integrated circuits and system software based on code division multiple access (CDMA), orthogonal frequency division multiple access (OFDMA), and other technologies for use in voice and data communications, networking, application processing, multimedia, and global positioning system products.
For a more in-depth look into YFI you can view the in-depth report at USA News Group: http://usanewsgroup.com/2017/11/06/wifi-woes-the-difficulties-of-improving-internet-services-2/
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