The entire interview with Gemini’s Carmel Sofer is part of our new subscription newsletter, Israel Opportunity Investor. You can find out more about the product and the opportunities we cover at www.israelnewsletter.com.
Can you tell us a bit about Gemini?
Carmel Sofer, Partner: Gemini was one of Israel’s first VCs and is 15 years old. We now manage more than $600 million via 4 funds. We’ve just closed our 4th fund and are in the process of raising our 5th fund, which we’re targeting to be $200 million. We’ve had over 30 exits including Saifun and recently, Traiana. (Continue »)
Aaron Katsman
www.IsraelNewsletter.com
Amdocs (DOX) one of our favorites here at IOI, announced it bought broadband cable solutions provider Jacobs RimellLtd. for approximately $45 million to build its operations support systems (OSS) offering. With the purchase Amdocs maybe the only vendor around to provide a complete “order-to-cash solution spanning all customer experience systems.”
On the heels of last week’s announcementby S&P raising Amdocs credit rating to BBB, S&P said, “The ratings on Amdocs reflect its top-tier customer base and highly visible and recurring revenue base, modest debt leverage with substantial liquidity, and good growth prospects as the telecom sector matures and shifts its focus to cutting costs.”
Coupled with their drive into the mobile world, Amdocs continues to execute their business model well, and long-term investors may want to take a strong look at the company.
Disclosure: Author’s fund holds a position in DOX. He holds no position in any other stock mentioned as of 4/08/08.
Please see our Disclaimer HERE.
NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.
Aaron Katsman is Managing Editor of the Israel Opportunity Investor newsletter. He is lead portfolio manager for the Israel Growth Portfolio and Managing Director of America Israel Investment Associates, LLC. For more information, go to www.israelnewsletter.com or call 1-888-327-6179, or email aaron@profile-financial.com.
On the back of the wireless spectrum auction results, I just wanted to share some ideas I had penned, oh about 2 months ago about how to make sense of the rapid changes going on in the wireless industry. More specifically, what I believe is happening is the evolution from Internet and wireless as 2 separate entities to a more unified, Wireless Internet. We’re still just in the putting-the-infrastructure-pieces-together stage.
I think it’s best to describe the trends briefly and then see who stands to benefits from such trends:
The opening of networks
As wireless networks begin to open up (this will take time before it really happens), the carriers should stand to benefit from the ability to monetize their networks via new revenues from non-subscribers. Much like the interconnect fees, the consumer will end up paying more in the short-run and all the open networks will win in 2 ways: you’ll have to open up to compete , monetizing cross network traffic
Apple (Nasdaq:AAPL) right now has made a commitment to only one network in the US. The device is so compelling that it may not matter but if the device ever loses some of its luster, Apple may need to think about making its device work on other networks.
Qualcom (Nasdaq: QCOM) loses. As networks open up, it will be hard for Qualcom to continue to collect its royalties on its closed-technology. Competitive pressures at both the device level and the network level will push Qualcom to find other revenue streams.
Google (Nasdaq: GOOG) wins. I never believed Google was bidding to win wireless spectrum. Instead of owning spectrum, Google has already won by pushing/lobbying the opening of competitive networks. Android and the Open Handset Alliance will allow Google to run the advertising OS of the mobile industry, just like it has become the Web’s Advertising OS.
Sprint seeking a strategy and what’s really happening in WiMAX
I see Sprint’s reworking of its WiMAX strategy as less a call on WiMAX and more specific to the Sprint situation. Sprint has internal issues it needs to shore up before it can think about any new audacious network rollouts. The fact that Ceragon (Nasdaq: CRNT) and Alvarion (Nasdaq: ALVR) are just continuing to knock the ball out of the park in terms of new WiMAX deals won (Alvarion has over 220 plus 40 in mobile WiMAX) shows that the for the rest of the world, WiMAX isn’t going to happen, it’s already started to happen. When WiMAX reaches critical mass, companies like Alvarion are in on the ground floor.
Retail sales move away from Big Box retailers as products unbundled
If the hardware ever is truly unbundled from network service contracts, then I think everything points to retail sales immediately taking to the Internet. Contracts and bundles are so complicated that you need local stores and the Big-Box operators to man sales forces to sell these. Once you can purchase a phone and a network contract separately, look to Amazon to become a major force in wireless sales.
I don’t think Retail sales go away entirely, but you’ll see a chink in the armor once direct sales become more feasible. Ebay and comparison shopping sites should begin to take over this field as they have in other fields where the products are more straight-forward and more commoditized.
Personalization
We’ve seen just the early innings of the personalization movement on the mobile device. Ringtones have become a $6 billion/yr business. The next stage here is video usage (less than 20% of US mobile subs use video on their handset). Private companies like Vringo and public companies like EA, which bought Jamdat (one of the early casual gaming firms focused on the mobile) should benefit. As more value-added services roll-out, companies like Comverse Technologies (OTC: CMVT.PK) (estimated to have almost 50% of world market share in voice mail services) and Amdocs (NYSE: DOX) will play a big role at the carrier level for running the content/technology/billing environments. If services don’t go the carrier route and instead work at the handset level, we’ll see tons of startups in this area.
I think iTunes will play a big role in delivering music to the phone and other products will follow suit, though not nearly as successfully.
Music firms, like Universal, who get it (albeit just a little) will begin to see opportunities for distribution online beyond just selling buckets of ringtones. Companies like Jupitermedia (Nasdaq: JUPM) are assembling large royalty-free libraries of music and this may begin to get interesting.
Hardware
I’m not that knowledgable on the equipment side but I do think Synaptics (Nasdaq: SYNA) will continue to see design wins as the device takes more center stage in the future as we get closer and closer to a true computing+mobile device. Input devices, as clearly demonstrated in the iPhone UI, are getting more creative and more useful.
Disclosure: Author’s fund has positions in ALVR, DOX, and CMVT as of 3/24/08.
Please see our Disclaimer HERE.
NEW! Introducing Israel Opportunity Investor, our monthly subscription-only newsletter. Stay ahead of the game and make smart decisions in Israel stocks. Go here to learn more.
Using a similar framework to O’Reilly’s Web 2.0 definition, let’s first define what Mobile 2.0 is all about. Once we define what is is, we can discuss applications for social network over mobile.
Mobile 1.0 vs. Mobile 2.0
ringtones, ringbacks <—> Vringo (video caller ID)
reading <—> publishing/participating
pull <–> push
connected to PC enivonment <–> connected to my web environment
411 <–> Google411
GPS <–> Google Maps
p2p <–> p2community
Dodgeball <–> facebook, android
casual gaming <–> networked gaming
(Continue »)
