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Verizon (VZ) & Honda (HMC) Test 5G Efficacies in Connected Vehicles

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In a concerted effort to test the efficacies of 5G and mobile edge computing in connected and autonomous vehicles, Verizon Communications Inc. (VZ - Free Report) is collaborating with Honda Motor Co., Ltd. (HMC - Free Report) to explore various ways in which safe driving could be practiced to avert accidents. The combined research program is part of their broader industry-wide partnership with government and academia within the University of Michigan’s Mcity facility, a test bed for connected and autonomous vehicles.

Leveraging Verizon’s 5G Ultra Wideband, mobile edge computing platform and Vehicle-to-Everything (V2X) communication systems, the research aims to test how superfast reliable data transfer between road infrastructure and vehicle could reduce collisions and save lives. These involve low latency data transmission between drivers and other cars, traffic lights, pedestrians and emergency vehicles to improve threat detection and avoid possible accidents.

On its part, Honda has also been advocating the usage of its SAFE SWARM concept that utilizes V2X technology to communicate with surrounding vehicles and shares key information such as location and speed in order to prevent potential traffic snarls, administer early braking actions or to change lanes if needed. However, this technology requires to outfit each vehicle with AI capabilities — a potential drawback that is eliminated with the advent of 5G. Utilizing 5G technology, AI capabilities can be moved from vehicle to the mobile edge computing platform, eradicating the need for AI onboard each vehicle.

This, in turn, has improved real-time communication in autonomous and connected vehicles with sensors installed in street lights and traffic posts. Although the research is in preliminary stages, it could sow the seeds for seamless 5G-enabled vehicle communications in the future, potentially reducing accidents through human error.

With one of the most efficient wireless networks in the United States, Verizon continues to deploy the latest 4G LTE Advanced technologies to deliver faster peak data speeds and capacity, driven by customer-focused planning, disciplined engineering and constant strategic investments. Verizon has been aggressively forging ahead to expand its fiber optics networks to support 4G LTE and 5G wireless standards as well as wireline connections. The company remains focused on making necessary capital expenditures in order to support the increased demand for network traffic.

Verizon is likely to benefit from a disciplined network strategy, including accelerated 5G deployment despite economic uncertainties stemming from the COVID-19 crisis. The wireless operator is building the 5G home solution and mobile edge computing on the same network. The company expects to see strong momentum in 2021 backed by customer-centric business model and diligent execution of operational plans.

Verizon has offered a bullish guidance for 2021 based on the resilient earnings performance and projected trends. The company currently expects adjusted earnings in the range of $5.00 to $5.15 per share. While service and other revenues are likely to grow in excess of 2%, wireless service revenues are expected to jump more than 3%.

Shares of the company have gained 1.4% in the past year compared with the industry’s rise of 13.1%.

Verizon presently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader industry are Cambium Networks Corporation (CMBM - Free Report) , sporting a Zacks Rank #1 (Strong Buy) and Ooma, Inc. (OOMA - Free Report) carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cambium has a long-term earnings growth expectation of 20%. It delivered a positive earnings surprise of 128%, on average, in the trailing four quarters.

Ooma delivered a positive earnings surprise of 163.7%, on average, in the trailing four quarters.

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