Smith Micro Wins New Patent

California-based Smith Micro Software (SMSI - Analyst Report), recently announced that it has received a Notice of Allowance from the U.S. Patent and Trademark Office, granting the company a patent on its "System and Method for Seamless Roaming Between Wireless Networks." This new technology will benefit the customers of Smith Micro, and will offer them an improved method to connect between networks.

The new patent bearing Pat No. 7,519,364 B2, coupled with its previous patent no. 7,133,669, covers the technology, which enables customers to switch between wide area networks (WWANs) and wireless local area networks (WLANs). This new technology will support automatic network detection, connection monitoring and maintenance.

We believe this new technology will open the floodgates as far as opportunities are concerned for Smith Micro, as telecom operators are expected to quickly embrace this technology, and pass it on to their end customers. The company has already established itself as a leading developer and marketer of wireless communications software products such as the mobile connectivity solutions and other software services to the wireless industry in the U.S. So we can safely assume that with its brand value and goodwill the company can influence prospective customers to incorporate this new technology into their system.

This apart, the arrival of 4G technology and ever-increasing number of connected devices have created a strong need to switch between different networks. We believe that in the given context it will become necessary for the mobile Internet community, especially the 3G and 4G technology providers, to adopt this new offering from Smith Micro. We expect this new product to have greater market penetration, in view of new features.

Although 2009 is expected to remain challenging, SMSI will benefit from the new PC OEM deal and new carrier wins besides increased adoption of 4G WiMAX connectivity management. We expect the company to post good results in the second half of 2009 on the basis of new customer wins, strong brand recognition, and a robust product pipeline. We maintain a Buy rating on the stock.