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We attended the Mavenir analyst meeting last week. The company has made progress in developing its radio products, while at the same time it has grown revenues approximately 15% this year and bookings are estimated to reach $510M this year. The company expects to achieve a 28% EBITDA margin this year, greater than last year’s profitability rate. The company has 3,100 full time employees, up significantly from last year. We met executives hired recently with impressive pedigrees. The company is positioning itself as a US based end-to-end mobile network operator supplier.
In 2019, most of the company’s revenues are from the telecom core products. Generally, the company is taking a software-only approach to the mobile network market, which in many ways is what operators want from its suppliers. By taking a software-only approach, the company leaves some of its destiny in the hands of others, especially when it comes to hardware acceleration and radio units. The company has achieved success in VoLTE and RCS. It is using the growing brand it has developed in these telecom core services areas to get access to RAN projects. The company describes its RAN activities and its partner’s radio capabilities as being able to handle radio connection densities on the order of 200 users per radio. Mavenir plans to bring User Plane Forwarding capabilities for packet core to market next year with hardware acceleration; chip suppliers that were mentioned include Intel and Mellanox (now Nvidia). The company is investigating various acceleration techniques such as GPU, ARM and FPGA, which presumably will allow the company to provide a denser baseband system than is currently possible. The company is targeting mobile operators that are making initial deployments of O-RAN based radio systems. Mavenir explained that European RFIs are allocating a certain number of RAN sites to O-RAN. The company claims to have recently been awarded some O-RAN contracts that have limited deployment scenarios. Vodafone CEO made public statements in support of working with Mavenir recently.
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We attended the Open19 Foundation Summit 2019 in San Jose, CA. The key message of the leadership team of the Foundation was that it expects 2019 to be the year where Open19 systems begin shipping. Yuval Bachar, President of the Foundation explained that there are 8-10 companies that are deploying or seriously considering, including two mega data center operators in process of evaluation and at least 6 adopters in advanced evaluation/deployment. Open19 does not specify what technology will be inside the systems; it only defines the form factor. Interestingly, GPU and ARM designs are included and we heard about AMD CPU more often than we did Intel. VaporIO made a presentation about its edge data center systems. Matt Trifiro, CMO of VaporIO explained that its systems nominally consume up to 165 kw in a 9 foot round datacenter. It claims that Vapor IO is deploying in 6 cities, 3 to 4 data centers in each city. ASUS and a new company, German Edge Cloud, both made interesting presentations. Salim Fedel, Associate VP Enterprise Solutions Business Group, ASUS, presented a few of the company's Open19 oriented products, Alps19, Brick and its Network Switch. Jason Rylands, VP of Data Center Strategy & International Sales, German Edge Cloud, made a very interesting presentation about its company's activities in Germany on how it is participating in the manufacturing industry in Germany. There is reticence on putting manufacturing data and control on the cloud, but there is a desire to build a German-only computing system, driven in part by GDPR and part by the nation's focus on manufacturing - that's the opportunity. German Edge Cloud has decided to use Open19 systems - accessing only the front of the racks is a big deal, it believes. German Edge Cloud shared many examples of how it is engaging with manufacturers for real-time error tracking during the manufacturing process, using analytics, and sharing information between various companies in the German supply chain. Huawei hosted 700 analysts and media participants in Shenzhen China last week to attend its annual analyst summit, nick-named HAS2019. The company's high-level message was simple - the company is an innovator and is moving down the stack into semiconductors and is partnering with and funding university projects to develop basic research. This year’s message was different from than the prior-year meeting, but several transformative events have occurred between this meeting and the prior year's, most notably the 2Q18 shipment ban on ZTE, the US / China trade dispute and US efforts to thwart Huawei’s participation in the 5G infrastructure of its allies. Interestingly, during HAS2019, the Apple and Qualcomm announced their chip-supply and patent settlement, Samsung announced its foldable phone (which has been met with criticism), and Ericsson & Swisscom announced that the operator went live with its 5G network. All three of non-Huawei events highlighted the importance of Huawei’s chips and innovation announcements. The company made announcements in its main keynote presentations on day one about seven different chip projects delivered recently or planned shortly. Chip-level is unusual for what are typically high-level presentations from a keynote-level presentation. These chips (seen in accompanying pictures) are:
The company shared more details about other chips in breakout sessions on the second and third days of the conference, as well. The point we are making, though, is that upper-level management provided significant detail about semiconductor developments at Huawei. Another relevant semiconductor-related point to make is that the company is de-emphasizing its reliance on Intel-based architecture and instead is focusing on devices such as ARM-based processors, as well as GPU, FPGA and NPU semiconductors. We would be remiss if we did not mention some of the system-level announcements and observations related to 5G that were made at the HAS2019 conference, which include:
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CHRIS DePUY
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