The GPS chips will be provided by Global Locate which was recently acquired by Broadcom (Nasdaq: BRCM).  The GPS chip made by Global Locate is an ‘Assisted’ GPS or A-GPS chip that uses a combination of satellite and cellular signals.  This results in a better performance indoors and places where there is no direct view to the satellite.  Assisted GPS chips are ideal for mobile phones.  Nokia (NYSE: NOK) is already on board with Assisted GPS technology. 

Here’s a little explanation of A-GPS via ExtremeTech:

It can take 30 seconds to do a “cold start” and figure out where you are—because the low-power satellites transmit data at just a few bits per second. So SiRF has also developed assisted GPS (A-GPS), primarily for cell phones. With an assisted GPS-enabled cell phone, two things happen when you request a fix. First, SiRF’s GPS hardware fires up and starts hunting down satellites. At the same time, the phone makes a quick connection to a special server run by your cell provider, which quickly delivers rudimentary location information—”You’re in New York, not LA.” Combine those together and an A-GPS-enabled phone can get a fix in under a second.

As you can see Global Locate is not the only outfit with this technology, but either way, an iPhone win is pretty significant.  Even if this rumor turns out to be true, I don’t see how this is all that bad for SiRF except on the PR side.  Right now, GPS based phones are at a very early stage.  The awesome Apple marketing machine will only help the overall mobile GPS market and will help it grow at a faster rate.  If iPhone has built in GPS so will it competitors and SiRF will have it’s fair share of wins along with Global Locate (Broadcom). 

SiRF is already providing Motorola, is being used by Research in Motion’s (Nasdaq: RIMM) Blackberry 8800, and there is possibility of gaining Sony Ericcson as client.  Apparently, Sony Ericcson stopped using Global Locate/Broadcom.

There is no question the competition has increased several folds for SiRF but there is a huge opportunity out there in the mobile GPS market. 

Last week, both Deutsche Bank and Oppenheimer came out with positive comments and a ‘Buy’ rating with respective price targets of $30 and $28.  With SiRF still near its lows it’s sitting nicely in that low-risk/high-reward category. 

* I am long SiRF

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I think Alvarion is definitely worth a look here and is worth picking up on any downside caused by the overall market. 

For further WiMAX reading, I would like to direct everyone to a couple of articles on Engadget by Ross Rubin. 

• Switched On: The WiMAX window (Part 1)
• Switched On: The WiMAX window (Part 2)

* I am long Alvarion (ALVR)

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The recent sell-off has made the two Wimax stocks attractive at their current valuations. The more you read about Wimax the more the question shifts from ‘if’ to ‘when’ Wimax will become reality. However, both companies mentioned below are still not profitable and might not be for a while. However, here’s a good chance to get into an emerging technology stock before the technology goes mainstream.

The two companies that will benefit the most with the upcoming Wimax revolution are:

1. Alvarion Ltd. (NASDAQ: ALVR) – Is the best of breed in Wimax and has partnerships with big names like Intel and IBM. The stock is near its 52-week low and is worth picking up if the weakness continues. Also, an acquisition play for big players who don’t have a strong Wimax portfolio such as Cisco.

2. Airspan Networks, Inc. (NASDAQ: AIRN) – A more of a pure play Wimax pick. The downtrend started with a higher than expected loss last quarter which was attributed to $5.5 million revenue deferral from Yozan Inc., a primary customer for its WiMAX deployment in Japan. Also, one of its Directors, Matthew Desch, bought 4900 shares on 5/19/2006 for an average price of $5.613. Just like Alvarion, I think the size of this company makes it a acquisition play as well.

Full Disclosure: I own stocks of Alvarion and Airspan.

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Either bad earnings or future outlook has caused big selloffs in Yahoo Inc. (NASDAQ: YHOO), Apple Computer Inc. (NASDAQ: AAPL), Ebay Inc. (NASDAQ: EBAY) and Intel Corp. (NASDAQ: INTC). Yahoo has suffered the most out of this group and it would be interesting to see how low it goes. Ebay would also be good buy below $40, if it does go that low. Google (NASDAQ: GOOG) has also suffered due to the Yahoo report and analyst downgrade. If you can figure out the bottom then Yahoo would be a great buy.

Also, check out some of the internet stocks from India and China that have suffered these last couple of days. Both of these markets are still at infancy (especially India) when it comes to Internet penetration. Stocks like Sify Ltd. (NASDAQ: SIFY) and Rediff.com India Limited (NASDAQ: REDF) are worth checking into.

Finally, look into Seagate Technology (NYSE: STX) which continues to impress.

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The announcement by Netgear at the 2006 CES of the Skype phone is huge. This is the biggest news to come out of CES so far. Introduction of a VOIP based WiFi phone was bound to happen but this caught everyone by surprise. Let’s check out the phone first:

Check out Alvarion Inc. (Nasdaq: ALVR) as my WIMAX pick.

I had talked about this possibility when talking about Ebay Inc (NASDAQ: EBAY) a few months ago. Once our cities and rural areas are covered by WIMAX, I will be one of the first ones to ditch my cell phone for WiFi or a WIMAX phone.

This is big news for Ebay which might just have caused the big move today. A lot of people were skeptical about eBay buying Skype but if Skype can become a mobile phone provider with the emergence of WIMAX then Skype buyout will be considered one of the best acquistions in history. Skype will be able to provide mobile phone service without even owning or investing in a network.

Keep in mind that this won’t really add any major revenue to Ebay-Skype in the short term. This phone is what the future will be all about.

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Nokia (NYSE: NOK) has time and time again disappointed in the US market. It doesn’t seem like they have given up in the US but they sure are not doing anything to create a buzz here. They are spending money on advertising and other marketing gimmicks but not improving on their design. Feature wise Nokia has some of the best phones and you can’t argue against quality either. However, when it comes to design they get beat every time. Also, they have to realize that unlike Europe where you can just buy a phone and put a SIM chip in there the phone in the United States are sold by the carriers. They subsidize the phones but your success depends on being accepted by carriers. If you look at the pictures below, it seems like Nokia just isn’t playing nice with the carriers.

Let look at the Nokia offerings by the big 4 cellular companies:

Cingular Wireless (GSM)

Source: Cingular.com

Obviously, nothing special about these two phones.

Verizon Wireless (CDMA)

Source: Verizon.com

Arguably, the worst phone provided by Verizon Wireless.

TMobile (GSM)

Source: Tmobile.com

A few more phones but nothing to write home about.

Sprint PCS (CDMA)

Source: Sprintpcs.com

C’mon would you buy these?

So what does NOKIA needs to do to win the US market?
- Create relationships with carriers so that they carry their phones. (Samsung with both Sprint and Verizon and Sanyo with Sprint)
- Create such a buzz for your phone that carriers will pay you higher price and would do anything to include it in their phone portfolio. This is pretty much the Motorola Razr (Motorola Inc. – NYSE: MOT) model.
- Let the cellular carriers promote your phones.
- Create more stylish phone that have mass appeal (Razr anyone?)

Let’s look at some really cool Nokia phones and find out if they will do well in the US. That is of course if they introduce them in the US and carriers carry them.

Source: Nokia.com

See the complete list of new Nokia Phone that are available or will be soon in Europe here:
http://www.nokia.co.uk/nokia/0,,18062,00.html

No one can argue that these are really cool phones with very good features. However, I don’t see any blockbuster phone in their like Motorola Razr. We will see how these phones do in the near future. Nokia is still a great company which is doing pretty good in Europe and Asia. They have much better brand recognition and popularity there. If they don’t do something quick in the United States they will miss out on the fat margins that you generate by selling phone in the US. They are selling a lot of phones in India and China but margins are being pressured by these low cost phones. You have to create a good mix by selling high end phone in markets like United States. The stock has gotten off it low of 12’s from last year but is again stuck in the $17 range. If you feel like Nokia can rebound in the high end phone and generate better margins, then Nokia would be something to get into. They are still number 1 but Motorola and others are gunning for them with all they have.

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