Pick up any article on Cisco (NASDAQ:CSCO) and I am sure that you will find a mention of Internet of Things (IoT), a revolutionary business concept that is going to change the landscape of business and technology in the coming years. Cisco’s CEO Mr John Chambers has estimated the worth of this opportunity to be around $19 trillion and while several firms would benefit from the Internet of Things, one of the chip-makers that could see huge revenue in the making is Atmel (NASDAQ:ATML).
The opportunity that is IoT
According to Goldman Sachs, Atmel is among the best-positioned companies to benefit from the Internet of Things. Goldman believes that Atmel's expertise in the microcontroller business will come in handy in the IoT era, and the chipmaker's recent product development moves also suggest the same.
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The company is providing IoT solutions with its SmartConnect family of products. Recently, Atmel expanded its IoT portfolio with new SmartConnect SAM W23 modules, which enable Wi-Fi connectivity and deliver high-performance and low-power technology for IoT applications. Also, Atmel believes that the SmartConnect family will lead to a drop in development times for manufacturing cost-effective, battery-operated industrial applications.
Since the company targets a broad range of IoT applications, from machine-to-machine communications, home and building automation, LED lighting, to wearables, it claims to have the most complete portfolio of IoT technologies. Such an extensive portfolio will allow Atmel to benefit from a multi-trillion dollar opportunity.
Cisco is pedalling hard.
Cisco is trying to make the world a more connected space to boost its revenue opportunity. Last year, the networking behemoth was facing a slowdown in its core router and networking gear business, and expects the Internet of Things to be its saviour. As such, Cisco is investing aggressively in this concept, unveiling solutions such as "fog computing" to stop resource wastage in IoT applications. In addition, Cisco has begun investing in early stage companies to spur IoT deployment.
By 2020, Cisco believes that there will be 50 billion connected objects, giving birth to a $19 trillion opportunity. Now, to interact with each other, these objects will need efficient connectivity solutions with longer battery life. Atmel is trying to do just that with its microcontrollers.
Acquiring Newport Media
Coming back to Atmel, the company clearly showed its seriousness with respect to the Internet of Things. With an intent to expand its capabilities, Atmel recently acquired Newport media, a wireless chip solutions maker. Atmel is spending $140 million for Newport Media in an effort to bring greater wireless capabilities to its array of chips—including microcontrollers and memory—for such machines as cars and home appliances, which will be key parts of the Internet of things (IoT). Mr Steve Laub, the president and CEO of Atmel said,“This acquisition immediately adds 802.11n Wi-Fi and Bluetooth to our offerings and will accelerate our introduction of low-energy Bluetooth products,”
While it may not be easy for investors to digest the magnanimous worth that the tech pundits are associating with IoT but it is hard not to acknowledge the oncoming of this revolution in the field of technology. It is quite impressive the way Atmel is taking big steps in order to position itself to leverage from the IoT opportunity. As such, it can be expected that the IoT will have a favourable impact on Atmel’s price movement in the future and investors should watch out for this development.