The GPS chips will be provided by Global Locate which was recently acquired by Broadcom (Nasdaq: BRCM).  The GPS chip made by Global Locate is an ‘Assisted’ GPS or A-GPS chip that uses a combination of satellite and cellular signals.  This results in a better performance indoors and places where there is no direct view to the satellite.  Assisted GPS chips are ideal for mobile phones.  Nokia (NYSE: NOK) is already on board with Assisted GPS technology. 

Here’s a little explanation of A-GPS via ExtremeTech:

It can take 30 seconds to do a “cold start” and figure out where you are—because the low-power satellites transmit data at just a few bits per second. So SiRF has also developed assisted GPS (A-GPS), primarily for cell phones. With an assisted GPS-enabled cell phone, two things happen when you request a fix. First, SiRF’s GPS hardware fires up and starts hunting down satellites. At the same time, the phone makes a quick connection to a special server run by your cell provider, which quickly delivers rudimentary location information—”You’re in New York, not LA.” Combine those together and an A-GPS-enabled phone can get a fix in under a second.

As you can see Global Locate is not the only outfit with this technology, but either way, an iPhone win is pretty significant.  Even if this rumor turns out to be true, I don’t see how this is all that bad for SiRF except on the PR side.  Right now, GPS based phones are at a very early stage.  The awesome Apple marketing machine will only help the overall mobile GPS market and will help it grow at a faster rate.  If iPhone has built in GPS so will it competitors and SiRF will have it’s fair share of wins along with Global Locate (Broadcom). 

SiRF is already providing Motorola, is being used by Research in Motion’s (Nasdaq: RIMM) Blackberry 8800, and there is possibility of gaining Sony Ericcson as client.  Apparently, Sony Ericcson stopped using Global Locate/Broadcom.

There is no question the competition has increased several folds for SiRF but there is a huge opportunity out there in the mobile GPS market. 

Last week, both Deutsche Bank and Oppenheimer came out with positive comments and a ‘Buy’ rating with respective price targets of $30 and $28.  With SiRF still near its lows it’s sitting nicely in that low-risk/high-reward category. 

* I am long SiRF

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http://notablecalls.blogspot.com/2007/09/sirf-tech-nasdaqsirf-inflection-point.html

Couldn’t agree more with this article.  I didn’t expect SiRF to go this low and was a little early on my call to buy SiRF back in early August.  I don’t see much downside at this point. 

* I am long SIRF

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I think Alvarion is definitely worth a look here and is worth picking up on any downside caused by the overall market. 

For further WiMAX reading, I would like to direct everyone to a couple of articles on Engadget by Ross Rubin. 

• Switched On: The WiMAX window (Part 1)
• Switched On: The WiMAX window (Part 2)

* I am long Alvarion (ALVR)

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Here are the highlights:

• Net Revenues for the 2Q were 70.6 million – Increase of 23.4% YoY.
• Gross Margins declined to 54.6% from 56.3% a year ago.
• Net Income came in at $2.1 million or $0.04 per diluted share compared to $1.7 million or $0.03 per diluted share a year ago. 
• The company has $211 million in total cash.
• The company lowered its full year 2007 revenue guidance to $300 – 310 million from $320 – 330 million. 

Other key highlights:

• Revenue in wireless growth slower than expected.
• SiRF, Intel (Nasdaq: INTC) to jointly develop and market products for Mobile Devices.

Analyst Opinions (post 2Q earnings):

• RBC Capital Markets:  ‘Outperform’ but target price reduced to $26 from $30
• Montgomery & Co:  ‘Outperform’ but target price reduced to $25 from $32

The wireless shortfall was blamed on Motorola (NYSE: MOT) which has really been struggling of late.  It recently even gave away its number two wireless handset spot to Samsung. 

SiRF is still in a great position and is a leader in its field.  We are still further away from the wireless/handset GPS promise but not too far away.  Wouldn’t it be nice to have built in GPS in the next version of the iPhone?  Although, there will be more competition in this sector for SiRF as compared to the PND sector the opportunity is much bigger as well.  Although, its hard to call a bottom it wouldn’t be too bad to start a small position here.  SiRF could also be an acquisition target now that its privately held competitor, Global Locate, has been acquired by Broadcom (Nasdaq: BRCM). 

I recently got back into SiRF (pre-earnings) by buying JAN 08 calls and bought AUG 07 PUTS right before earnings to proctect myself.  I am glad I bought the PUTS and I think I should be fine by the time JAN 08 rolls around.  I previously got out SiRF back in December 2006 and said that I still like the GPS sector and am looking into Navteq (NYSE: NVT).  As it turns out I kept looking at Navteq but never bought it.  At that time Navteq was trading in the mid 30’s and now as we all know its near the mid 60’s.  Yes, of course, I am looking back at Navteq again for a good entry point. 

* Full Disclosure:  I own long-term CALLS and short-term PUTS in SIRF.

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Here’s my list (in no particular order):

• SiRF Technologies (Nasdaq: SIRF): The 5-day chart on this GPS Chipmaker looks pretty ugly. SiRF proved the naysayers (like me) wrong the last earnings release. SiRF’s monopoly in GPS chips is dwindling but the overall market is growing.
• Infosys Technologies (Nasdaq: INFY): I don’t think Infosys needs any introduction. Another stock that has taken a big hit this week.

Click here to go to the original article

* Full Disclosure: I am long STP, FTEK, UA, AMSC. I don’t have positions in BA, HDB, IBN, INFY or SIRF.

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Apple Inc. (Nasdaq: AAPL) made a big splash today at the Consumer Electronic Show (CES) with the introduction of the iPhone. If you still haven’t seen the iPhone you have no idea what you are missing. You can see the engadget coverage here. The iPhone is good enough to make a grown man cry.

Random thoughts:

• Apple stole the show with the iPhone announcement.
• Apple did a great job of not letting the iPhone specs and features leak out.
• Market Reaction:
  • Apple (Nasdaq: AAPL): Up 8.31%
  • Nokia (NYSE: NOK): Down 1.32%
  • Motorola (NYSE: MOT): Down 1.83%
  • Research in Motion (Nasdaq: RIMM): Down 7.85%
  • Palm (Nasdaq: PALM): Down 5.69%
• Research in Motion and Palm got clobbered today but it might be interesting to note that the iPhone is not a smartphone. iPhone can play music and video, take 2 mp pictures and browse the web but doesn’t have Microsoft Office/ Exchange capabilities and no 3G. So it won’t be a business phone like a Treo or a Blackberry.
• iPhone is expensive.
  • $499 – 4gb version with a 2 year Cingular contract
  • $599 – 8 gb version with a 2-year Cingular contract
• This is a major win for Cingular (NYSE: T) as well. They also had exclusivity with the Motorola Razr when it came out.
• I am not sure if anyone can beat Apple when it comes to design and usability. The Apple and Steve Jobs legend keeps growing thanks to the iPod.
• We now have another Mobile OS with Apple using OS X in the iPhone.
• This is a wake up call for cell phone makers such as Nokia and Motorola. Apple has come up with a cell phone that has all the world drooling while Nokia and Motorola keep popping out variations of Razr.
• Motorola (NYSE: MOT) hasn’t been able to come up with a compelling cell phone since the Razr.
• Nokia (NYSE: NOK) hasn’t come up with a compelling device in ages. At least, Motorola came out with the Razr and the Q. Nokia was late in figuring out the ‘flip’ phone trend and then was late in figuring out that ‘thin’ is in. Nokia finally has come out with a ‘thin’ phone but it looks like an exact replica of Motorola Razr. Nokia does have some cool phones but they seem to lack mass market appeal. N-Gage was another failure for Nokia. Nokia really needs to wake up.
• Are we going to see Microsoft (Nasdaq: MSFT) come up with a Zune Phone? They do get hit by this because of their Windows Mobile OS.
• Nokia and Sony Ericsson (NYSE: SNE) (NYSE: ERIC) Samsung, Siemens and Panasonic also get hit because they have a stake in Symbian. I use a Nokia E62 which uses Symbian OS and let me tell you that its the slowest mobile OS I have ever seen.

I am still wiping the drool off my keyboard.

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This is a follow-up to my earlier article on SiRF titled ‘SiRF gets beaten up’. 

I am completely out of SiRF (Nasdaq: SIRF) as of today.  I sold half my shares on Friday and sold the rest this morning while the stock was still positive but starting its downtrend. 

Why did I get out:

• I didn’t like the price action the last couple of days as we saw no major rebound.  I wanted to get out while I was still up and ended up with a small profit.  Plus, I am little bearish as far as the overall market is concerned. 
• I still think SiRF is a good company with a bright future but there is no point falling in love with a stock.  I am going to closely monitor the stock and maybe get back in the near future when I feel like it has been overly punished.
• The cell phone GPS market is going to be huge but there is more competition in that arena then in the Personal Navigation Device (PND) arena.  Check out this new GPS chip from Epson.  This new chip is supposed to be the world’s smallest.  I had no idea Epson made GPS chips to begin with let alone the world’s smallest. 
• There was also Barron’s mention about SiRF’s high multiple. 

I still like the GPS sector and am looking into Navteq (NYSE: NVT). 

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GPS chip maker SiRF Technology (Nasdaq: SIRF) got beaten up pretty bad today. The stock went down 11.46% to end the session at $26.20. This is a stock I own and wrote positively about in the past.

What happened?

• Jefferies & Co. analyst Adam Benjamin speculated that SiRF may have lost business with TomTom One to privately held Global Locate.
• SiRF used to be the exclusive supplier to Europe’s TomTom, a competitor of Garmin, but TomTom is going with Global Locate for its TomTom One line of GPS products. SiRF chipsets will still be used in the high end TomTom product line but not the low end TomTom One products.
• Jefferies & Co. also cut the price target on the stock to $34 from $36, and lowered the 2007 revenue estimate to $304 million from $321 million.

What now?

• Deutsche Bank Securities analyst Brian Modoff said potential market share loss that drove shares down Thursday “does not change the fundamental case for the company.”
• Brian Modoff further added that SiRF will inevitably lose some of its market share and he saw “no reason” to change earnings estimates. He said the competitor won the deal by offering lower prices, not a better product, and “given the important of accuracy and reliability” for their products, “we think a pricing-taking strategy can only go so far.” Deutsche Bank maintained a “Buy” rating and $33 price target.
• The cellphone GPS market is still in its infancy and provides a huge opportunity for SiRF.

What will I do?

• As it turns out I am still in positive territory even after today’s big fall, although not by much. I actually didn’t get a chance to even consider selling because it was too late as the stock had fallen considerably before I could react.
• I like the fact that the stock was up almost 2% after hours. I am going to closely monitor the stock tomorrow to see how it reacts. If the downturn continues, I might just sell all or part of my holdings and try to predict the bottom to buy again.

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Let me begin by apologizing for the lame and unoriginal headline of this article. However, GPS chip maker SiRF Technology Holdings (Nasdaq: SIRF) is on a upswing and it blew past $30 after a weak opening today.

I wrote back on July 25th to keep an eye on the stock as it got clobbered after reporting second quarter earnings. Shortly there after, I wrote about its recovery citing a positive AP article. I even said that I am going to buy some SiRF myself. I actually ended up waiting until the third quarter earnings came out and got in under 25.

SiRF is the leader in its field and I know competition worries are abound. There was even a Barron’s article citing growing competition. However, I am willing to ride this SiRF until I see any signs of competition hurting them. I love the GPS market and feel like its still got a long ways to go. Market is not saturated at all. GPS devices are still not common place and are still pretty expensive. We still haven’t seen full scale integration of GPS devices into Cellphones, Smartphones, Ipod’s (one can hope?) among other things. Only a handful of cars on the road have GPS navigation devices but I don’t know anyone who wouldn’t want a GPS navigation device in their cars. Then only thing keeping them back is the price.

I realize the Garmin fell hard earlier due to margin pressures but I think Garmin and other manufacturers can cut down in other areas before worrying about GPS chips. Garmin Nuvi sells for over $500 but the SiRF chip in it is less than $10.

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eBay’s (Nasdaq: EBAY) VOIP subsidiary Skype is starting to gain momentum with a surge of branded phones and deals in regard to ‘click-to-call’ advertising.  Instead of debating  forever if the Skype acquisition was the right move for eBay or whether or not it overpaid for it, lets look at what’s going on with Skype.  (By the way, I do think eBay overpaid for Skype but I am willing to give eBay some more time to redeem themselves and make it work).

eBay’s recent deals with Yahoo on the domestic front and Google on the international front should really help Skype.  Both Yahoo and Google will use Skype along with their own Yahoo Messenger and Google Talk services for their ‘click-to-call’ advertising initiative. The emergence of ‘click-to-call’ advertising will also be a big plus for Skype.  I wouldn’t want to download Google Talk, Yahoo Messenger and Skype and use the one which is available with a click-to-call advertisement.  With both Google and Yahoo using Skype for their ‘click-to-call’ initiatives it gives a Skype a huge edge.  Skype is even being included in the Google Toolbar. 

Also, being a gadget junky, I have been noticing a lot of new Skype enabled handsets come on the market recently.  Some of these don’t even require you to have a computer.  Interesting thing is that some of these handsets are made by big time companies like GE and Philips. 

Thomson (NYSE: TMS) and Skype will release a GE (NYSE: GE) branded landline phone that integrates with Skype and lets user makes VOIP phone calls using Skype. 

Courtesy: engadget

Meanwhile Netgear’s (Nasdaq: NTGR) Skype phone is finally shipping according to engagdet.  This phone is what the future is all about.  If you have WiFi access then you can make phone calls and receive them as well via your Skype account or make SkypeOut calls.  Although, this phone will only appeal to niche users for now the potential of this phone could be huge.  Once Wimax becomes mainstream and covers entire cities a similar Wimax phone could make cell phones obsolete.

Courtesy: engadget

Belkin also is coming out with its own Skype WiFi phone. 

Courtesy: engadget

European heavyweight Philips (NYSE: PHG) isn’t going to sit back either.  They are coming out with their own Skype phone and should probably do pretty well in Skype’s main market in Europe.  We in the United States sometimes forget the popularity of Skype overseas. 

Courtesy: engadget

Here are a couple of other Skype handsets from Logitech (Nasdaq: LOGI) and US Robotics. 

Courtesy: engadget. 

* I am long EBAY

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