Where Have All of the M/A-COM Pieces Landed?

Over the past year, one of the RF and microwave industry icons has been diced into 5 pieces and sold to various companies. If we go back a few years, M/A-COM was purchased by the connector giant AMP back in 1995 as they wanted expand into the growing wireless markets. AMP was then acquired by the even larger Tyco International in 1999 as they were buying companies in many industries. In 2007, Tyco International split up into 3 companies (after the Dennis Koslowski years), one of which was Tyco Electronics (the medical companies formed a new company called Covidien and the security companies stayed with Tyco International). Tyco Electronics contained the former AMP and M/A-COM companies along with many other brands. Shortly after that time, Tyco Electronics decided most of the M/A-COM product portfolio was not part of their future strategy and put the defense and commercial components businesses up for sale.

Cobham Defense came along in 2008 and purchased the commercial and defense components businesses with the intent to re-sell the commercial business as soon as they found a buyer. At about the same time, the automotive products (antennas and radar sensors) were sold to Autoliv. Cobham recently found a buyer as John Ocampo purchased the commercial components business (John Ocampo is the owner of GaAs Labs which is a large investor in Mimix Broadband) which retains its name developed under Cobham as M/A-COM Technology Solutions. In between all of this, Micronetics scooped up the RFID product lines from the commercial business in a separate transaction which should nicely complement their existing product lines.

And then last week, the private radio group (Wireless Systems) was purchased from Tyco Electronics by Harris Corporation. This should bring strength to both groups as Harris has a strong foot hold in the military radio market and M/A-COM Wireless Systems was growing in the public safety market where Motorola is a dominate player. It may have been sparked by the potential loss of the $2B New York State contract or maybe Harris just saw a good opportunity to grow their radio business.

It will be interesting (and challenging) to follow the pieces as they continue forward in these new companies. So now M/A-COM is part of Cobham, Harris, Micronetics, M/A-COM Technology Solutions (John Ocampo) and Autoliv. What do you think of their future prospects?

Microwaves Could Enable Solar Energy Harvesting in Space

Pacific Gas & Electric (PG&E) has announced they're expanding their solar interest far beyond California and into outer space. The San Francisco based utility plans on purchasing 200 MW of electricity from Solaren Corp., a start-up that is trying to produce solar power in space. Solaren plans to deploy solar panels in space that would collect the sun's energy and transfer it via microwaves back to a collecting station on Earth. Then the energy would be converted to electricity and feed into the grid.

The microwave frequency would be one that is least absorbed by the Earth's atmosphere. People have expressed concern that the beam might damage anything that gets in its path but they claim it would be 1/6 the intensity of noon sunlight. I am not sure how they are comparing light energy to microwave energy. The plan would have the system operating in 2016.

Solaren says that unlike ground-based solar arrays, space satellites could generate power 24 hours a day, unaffected by cloudy weather or Earth's day-night cycle. The capacity factor for a ground-based solar is typically less than 25 percent. In contrast, the capacity factor for a power-generating satellite is expected to be 97 percent.

The agreement calls for 800 gigawatt-hours of electricity to be provided during the first year of operation, and 1,700 gigawatt-hours for subsequent years. The larger figure is roughly equal to the annual consumption of 250,000 average homes.

Very interesting stuff and this year there is really a big emphasis on the "Greening of Wireless" to reduce our dependence on fossil based fuels. Microwave Journal is hosting a webinar and featuring a technical article by Mesuro and Tektronix to introduce a new open loop active load pull technique for the design of complex, highly efficient power amplifiers, necessary for reducing the power consumption of tomorrow’s mobile infrastructure. The method utilizing microwave sampling scope technology to simultaneously capture waveform data ranging from DC to several tens of GHz is demonstrated.

Touchy Cellphone Users Spur Sales

According to Wirefly, sales of touchscreen devices have grown 56% from the fourth quarter of 2008 to the first quarter of 2009 and currently account for 38% of its cell phone sales. Two factors are driving the sharp increase in popularity of touchscreen phones: The increased choice of touchscreen devices from virtually every wireless manufacturer and its affordability for even the most budget-conscious consumer.

“The mobile industry has embraced the touchscreen,” said Andy Zeinfeld, CEO of Simplexity, parent company of Wirefly. “Consumers are in love with the fluid interface. Many find the touchscreen cell phone easier to learn and easier to navigate than its push-button counterpart. With a simple flick, tap or swipe of a finger, users can quickly glide, zoom and flip through web pages, documents, emails and photo albums.”

Grim Week for Agilent Employees

This past Wednesday, Agilent Technologies laid off 300 employees at its Santa Rosa division or more than 20 percent of its work force. Agilent employees had been awaiting the grim news for the past three weeks. In March, the Santa Clara-based company announced plans to eliminate 14 percent of its global work force. The layoffs at the high-tech test & measurement equipment manufacturer occurred over the full range of Agilent jobs in Santa Rosa, including managers, engineers, marketing, human resources, finance, manufacturing and support, said Ron Nersesian, who heads Agilent’s Santa Rosa-based Electronic Measurement Group.

Wednesday’s layoffs were the largest at Agilent in Santa Rosa since 2005, when more than 300 employees were let go. Over the past eight years, the company has eliminated 5 out of 6 jobs at its Sonoma County operations as it slashed costs and moved manufacturing jobs to cheaper facilities overseas. The layoffs will leave Agilent with 1,050 employees in Sonoma County, down from a peak of 6,000 regular and temporary workers in 2001.

Unlike past layoffs that involved the shifting of manufacturing jobs overseas, these recent job cuts were not for the sake of offshoring, Nersesian said. The company’s Asian manufacturing facilities also face “significant” cut-backs because of falling orders for Agilent’s products, he said.

Agilent and other technology companies are losing business as consumers cut back on spending for the latest electronic devices. This year’s revenue for the test and measurement business will be down 30 percent from 2008, the company said in March.
Overall, the company is cutting 2,700 jobs worldwide under the restructuring plan implemented Wednesday. The staffing cuts and other cost-cutting measures are expected to save the company $300 million over the next four quarters.

Handset Market Not Hit As Hard As Expected

According to ABI Research, consumers did not cut back too much in purchasing handsets during the first quarter of 2009 which is good news. Handset vendors shipped 258 million handsets by the end of the quarter which represents an 11% year-over-year decline. This significantly exceeded the previous forecast of 253.5 million.

ABI has introduced a note of mild optimism in its handset forecasts for YE-2009, revising them from -8.4% to -8%. Samsung and LG demonstrated healthy gains to take their market shares to 17.8% and 8.8%, respectively. Another star performer was RIM which raised its share to 3.0% due largely to the success of its Blackberry Bold. It is a little curious that Apple’s market share is just 1.5% given the success of its AppStore. As popular as the iPhone3G has been, increased competition in the touchscreen segment and a lack of product differentiation may be dampening demand. ABI Research expects that by 2H-2009 the iPhone3G will have one or more siblings. That will allow Apple to accelerate growth.

Nokia was beaten out by SonyEricsson for showing the largest contractions (their shares now stand at 36.2% and 5.6%). Nokia will breathe a sigh of relief once its latest smartphone, the N97, enters the market. Nokia has had a fair amount of success with the E71 but needs to beef up its touchscreen product lines. While Sony-Ericsson has the Experia smartphone line-up, the firm’s exposure to the feature phone segment was squeezed more than other handset sectors. While feature phones serve many needs in the market, operators have been especially keen to snap up smartphone stock and were cooler on the Ultra-Low Cost and feature phone orders.

ABI says that despite the positive signs, the industry should be cautious. The IMF has issued another sharp downgrade to its global outlook. Unemployment figures are also likely to continue creeping up. Buyers in the developed world are still concerned about debt and job security. Developing economies are expected to take a hit on the credit side which could have knock-on consequences on credit lines for purchases and stock levels.