The Consumer Electronics Show in Las Vegas is over, and, as every year, it was so packed and unfocused, from weird applications to networked cars, that the general impression is of being unable to see the wood for the trees. After the show, no-one can point to the next big thing, although, on second thoughts, even when this month seven years ago Steve Jobs presented the first iPhone, nobody apart from Jobs himself said it was the next big thing.
The slogan that hovered over Las Vegas and that in general has become the technology buzz in the past year is "the Internet of things" (IoT), meaning that everything is connected to everything else. Anyone who wants to know what this connected world might look like in the distant future should see the movie "Her". As far as the short term is concerned, at Las Vegas we realized that the screens in our cars are becoming the next battleground for the giants, Apple (AAPL), Google (GOOG), Samsung, and others.
Among the Israeli companies, networked cars opens up markets for Ceva Inc. (Nasdaq:CEVA); LSE:CVA), which is already collaborating in this area with several major companies, and also for Telit Communications plc (AIM:TCM), which for years has sold vehicle communications modules to European manufacturers. In the last week of 2013, Telit expanded its solutions offering in the transport field when it acquired a unit specializing in advanced road services from Dutch semiconductors giant NXP (NXP) for $9 million.
Everyone at Las Vegas agreed that, as far as smartphones are concerned, Barcelona is more important, that is, the Mobile World Congress that will take place there at the end of February, as it does every year. Samsung will apparently launch its fifth generation of the Galaxy family there, and, until then, analysts will poke around among sub-contractors in the Far East to find out which chip suppliers have managed to get into the new smartphone and which have been left out.
This week, the reporting season moves into high gear, with the big banks releasing their financials. In the technology sector, only Intel (INTC) among the major companies will report this week, on Thursday, with GE reporting the following day. The larger Israeli technology companies such as Check Point Software Technologies Ltd. (Nasdaq: CHKP), Amdocs Ltd. (Nasdaq: DOX), Mellanox Technologies Ltd. (Nasdaq:MLNX) and Radware Ltd. (Nasdaq: RDWR) will report only in the last week of the month.
There is room for cautious optimism over the results, for so far we have heard no dramatic profit warnings, and among the Israeli companies Nova Measuring Instruments Ltd. (Nasdaq:NVMI; TASE:NVMI) has announced that its results will be at the upper end of its guidance, and Radware sprung a surprise by raising its guidance for the fourth quarter, sending its share price to a twelve-month peak. Not since the fourth quarter of 2009 has Radware raised its guidance at results time, and I believe that the positive momentum will carry over into the guidance for the first quarter of 2014, in contrast to the first quarter of 2013, for which Radware issued a warning.
This week will also see a resumption of the investor conference season. In the medical sector, JP Morgan's (JPM) major annual conference will take place in San Francisco. Managers of over 300 listed growth companies will travel to New York for a conference organized by investment bank Needham & Company, represented in Israel by Bank of Jerusalem. Among the Israeli companies that I hold in my portfolio here, Orbotech Ltd. (Nasdaq: ORBK), AudioCodes Ltd. (Nasdaq: AUDC; TASE: AUDC), Attunity Inc. (Bulletin Board: ATTUF), DSP Group Inc. (Nasdaq: DSPG), Nova Measuring Instruments Ltd. (Nasdaq:NVMI; TASE:NVMI), Ceva Inc. (Nasdaq:CEVA); LSE:CVA), Ceragon Networks Ltd. (Nasdaq: CRNT; TASE:CRNT), Camtek Ltd. (Nasdaq: CAMT; TASE:CAMT), Radware Ltd. (Nasdaq: RDWR) and OTI (Nasdaq: OTIV; DAX: OT5) will all be there.
I am adding SuperCom (SPCB), to which OTI recently sold its smart cards division, to the portfolio. For identification cards, passports, driving licenses, election systems, and other items based on smart identification technology there is currently very large potential in government projects of the order of tens of millions of dollars over several years, chiefly in developing countries.
If up to now OTI and SuperCom fought toe to toe over every project and damaged each other, rather like Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) and Israel Aerospace Industries in drones, from now on, after the sale, I expect SuperCom's task in penetrating the market to become much easier, and this is not the only field in which it operates.
SuperCom CEO Arie Trabelsi estimates that, on the basis of the 2012 sales of the division acquired and of SuperCom itself that year, the annual sales potential of the company as a whole is currently $26 million, without taking into account large project wins in the pipeline some of which could come to fruition this year.
Finally, following the cancellation of the agreement with ECI, I am parting from Orckit. In 2005, I realized profits on this stock much greater than the loss I am taking today.
Published by Globes [online], Israel business news - www.globes-online.com - on January 13, 2014
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