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Analyst Blog

Novatel Wireless Inc. (NVTL - Analyst Report) will soon introduce its first 4G MiFi mobile intelligent hotspots with Verizon Wireless (VZ - Analyst Report). The MiFi 4510L will be available for Verizon’s super-fast LTE mobile broadband network. Verizon has started deploying LTE networks in different parts of the U.S. from early December 2010.

Novatel has already launched its MiFi 2200 series products with Verizon that received encouraging market traction. Verizon’s LTE mobile broadband network is expected to support 5-12 Mbps download and 2-5 Mbps upload speed. MiFi 4510L will also provide backward compatibility with Verizon’s 3G networks.

From October 28, 2010, Verizon Wireless has started selling Apple Inc’s (AAPL - Analyst Report) 3G iPad along with MiFi wireless hotspot. From November 21, 2010, AT&T (T - Analyst Report) has started selling MiFi preloaded with MiFi OS widgets and application support. MiFi is now available with all the three major telecom carriers in the U.S., viz., Verizon, AT&T and Sprint Nextel Corp. (S - Analyst Report).

In a major initiative to enrich its pipeline, Novatel has decided to introduce next-generation (4G) enabled devices. These innovative devices will support super-fast network technologies of dual carrier HSPA+, WiMAX, and LTE. Recently, the company announced that it is working with six original equipment manufacturers for embedded LTE modules for the 4G LTE Mobile Broadband network of Verizon.

From a financial perspective, Novatel’s balance sheet remains firm, capable of sustaining near-term expenses. At the end of the third quarter of 2010, the company had nearly $5.80 per share of cash & cash equivalent.

This strong cash position will enable the company to diversify into several new wireless verticals, especially in the high-speed 4G platforms. We maintain our long-term Neutral recommendation on Novatel and currently a short-term Zacks #3 Rank (Hold) on the stock.

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