Qualcomm Incorporated (QCOM - Free Report) recently announced that it has signed a joint venture with Gizwits and Quectel to develop — Quectel BG36 — an Internet of Things (IoT) module that can run on 2G networks but is software upgradeable to narrowband IoT (NB-IoT) and LTE-M. Gizwits, a leading IoT developing firm, will provide IoT cloud services while cellular module supplier, Quectel, will manufacture the hardware. The LTE IoT modem will be supplied by Qualcomm Technologies (subsidiary of Qualcomm Incorporated), along with the wireless edge software platform. The announcement was made at the Mobile World Congress Shanghai.
Essence of the Innovative Module
Notably, the Quectel BG36 module will be compatible with China Mobile Shandong Branch network. The module also boasts a multi-year battery life. As the cellular industry transitions to the latest LTE IoT standards, the Qualcomm MDM9206 LTE IoT modem-based module could be easily upgraded to NB-IoT and eMTC over the air. The Quectel BG36 module seeks to enable the use of IoT devices on current cellular technology and accommodate changing requirements throughout the lifespan of the device, assisting solution providers to manage a large number of devices easily and reliably.
Motive Behind Quectel BG36 IoT Module
The main challenge for developers and manufacturers in the rapidly evolving communications industry is the creation of products that can work in tandem in the current and future environment. To cite an instance, many cellular operators around the world are in the process of obsoleting their 2G networks and reuse that 2G spectrum to roll out 5G networks. In such an environment, manufacturers are facing the dilemma of continuing to use their 2G modem technology, which will work well today but is likely to lose relevance tomorrow, or going for more modern LTE technologies that have limited coverage in many regions currently. This partnership will allow developers to create and deploy cost effective and flexible IoT solutions, which can be upgraded as required with the help of Gizwits’ IoT cloud APIs. This ability to use the cloud to extend the modem’s capabilities on an IoT device is what makes the module a breakthrough innovation. The IoT module’s capability to flex and evolve along with changing requirements will be complemented with the acceleration of the global 5G standard — 5G New Radio.
The partnering companies plan to make modem upgrade capabilities available through Qualcomm wireless edge services (WES) by the first half of 2019, after the year-end launch of Qualcomm WES.
In the past 12 months, the stock has underperformed the industry with an average return of 0.1% compared with a 5.2% rise for the latter. It remains to be seen whether the new IoT innovation can take advantage of the evolving telecommunications industry and rake in more revenues.
Zacks Rank and Stocks to Consider
Qualcomm currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry space are Comtech Telecommunications Corp. (CMTL - Free Report) , sporting a Zacks Rank #1 (Strong Buy), Motorola Solutions, Inc. (MSI - Free Report) and Ubiquiti Networks, Inc. (UBNT - Free Report) , carrying Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Comtech has an expected long-term earnings growth rate of 5%.
Motorola has an expected long-term earnings growth rate of 8%.
Ubiquiti has an expected long-term earnings growth rate of 18.6%.
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