Premium wireless equipment company Ericsson ERIC recently partnered with Orange to offer economical, optimized and less complex devices as well as improved network capabilities for Cellular IoT as compared with LTE and GSM. The advanced cellular network for IoT is expected to be operational from 2017 onward.
Per the Ericsson Mobility Report, IoT is a rapidly growing segment in the contemporary market that would include almost 28 billion connected devices by 2021. Cellular, on the other hand, is an important groundwork of IoT, which will benefit the latter with global reach, security, licensed spectrum and reliability. However, it needs to be evolved further so as to facilitate major IoT deployments.
Enhancement of basic cellular network and device potentiality are driven through a standardized process at 3GPP (‘3rd Generation Partnership Project’) that helps provide extensive coverage with less expensive devices, extended battery life and software-enabled upgrade of conventional networks.
Ericsson is a popular provider of communication networks, telecom services and support solutions. A leader in telecommunications, the company remains keen on expanding its role as an ICT (Information and Communications Technology) solutions provider. Ericsson believes that IoT is a booming market with huge business potential for mobile operations. Under the above-mentioned partnership, the company would offer its unique software-only-upgrade solution to speed up the IoT cellular network, thereby allowing operators to effectively leverage their infrastructure investments, which would pave the way for 5G in the long run. In our opinion, the new cellular upgrade will serve to boost the company’s innovation-based growth strategy, going forward.
Stocks to Consider
Ericsson presently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include InterDigital, Inc. IDCC, Juniper Networks, Inc. JNPR and Motorola Solutions, Inc. MSI. While both Juniper Networks and Motorola Solutions hold a Zacks Rank #2 (Buy), InterDigital sports a Zacks Rank #1 (Strong Buy).
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