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    Powerwave Technologies reverses Trend on Strong Telecom Fundamentals

    Powerwave Technologies reverses Trend on Strong Telecom Fundamentals

    Shares of Powerwave Technologies Inc. (NASDAQ: PWAV ) are slightly up this morning after losing more than 36% over the last two months. The recovery came on the back of positive wireless industry data, which is currently positioned as a major driver of the global economic recovery, as well as improved outlook for a number of key telecom players.

    PWAV is a recognized supplier of end-to-end solutions for wireless communications networks worldwide. The company is being renowned as a provider of a comprehensive suite of wireless solutions, including antennas, base station products and advanced coverage solutions, utilized in all major wireless network protocols and frequencies, including the next generation networks in 4G technology.

    PWAV’s shares downward march commenced in the first days of May after the company missed Q1 2011 revenue and earnings estimates on the delay in shipping a chip for 4G wireless networks. Q1 2011 revenue rose 19% to $137 million, missing the average $152 million estimate. The company reported a net loss of $0.04 a share compared to analysts’ expectation of a $0.03 a share profit.

    However, the management has already reported that they resolved the production issues that impacted the revenue in Q1 2011 and accordingly is on track to meet its annual guidance of $650-$680 million in revenue. According to Thompson Reuters, PWAV is expected to earn $0.20 a share on revenue of $666 million.

    The unparalleled growth of high-speed mobile Internet traffic, particularly for wireless data and video, has transformed telecommunications industry into the most evolving, inventive and competitive industry. The momentum is expected to remain strong in 2011, with a number of research companies predicting that 2011 may set a new record in terms of telecommunications spending and revenue. With the economic recovery underway, large telecom service providers are positioned to maintain record spending to gradually expand their coverage and upgrade their networks on the back of significant subscriber growth.

    This month, the company’s Triple Broadband Antenna Family has won the Telecommunications Category of the 2011 TechAmerica Orange County High-Tech Innovation Awards. These antennas enable carriers to cut the number of sites required for nationwide coverage while ensuring consumers receive ubiquitous service, no matter where they are located in today’s 2G/3G/4G landscapes. PWAV takes a leadership role as a comprehensive supplier of all equipment necessary for carriers to deploy these networks quickly and commercially.

    As wireless carriers race to roll out 4G networks to meet consumer demand, they must upgrade their existing cell sites. Combining 2G / 3G and 4G frequency bands on a single antenna, the Powerwave Triple Broadband Antenna Family was designed to maximize performance, lower operating costs and reduce environmental impact. It delivers more functionality within a smaller footprint, using fewer components and offering higher reliability, faster installation and reduced maintenance for carriers than other antennas.

    The latest industry reports suggest that transition to mobile would accelerate in the coming years. According to a report from consulting firm Deloitte, sales of mobile computing devices like smartphones and tablets could outnumber traditional plug in PCs already in 2011. It reported worldwide sales of smartphones and tablet computers would come to 425 million, well above sales of 390 million PCs.

    In a recent report, Gartner forecasts 2011 PC growth at 10.5% down from 15.9% previously. Worldwide PC shipments will hit 440.6 million units in 2012, a 13.6% increase from 2011, down from Gartner’s previous outlook of 14.8% growth, the market watcher added. Meanwhile, Gartner has further claimed that the global tablet market could almost quadruple in 2011 to 70 million units from 15 million in 2010, and eat into the slowing PC market over the next four years.  Gartner further predicted that worldwide smartphone sales could reach 468 million units in 2011, a 57.7% increase from 2010 and are expected to surpass the 1 billion mark by the end of 2015.

    The industry trends are supporting an accelerated deployment of PWAV antennas to meet the network constraints that an increased number of devices in use would cause. Accordingly, with demand surging, the company would be able to get better pricing for its award-winning offering, which combined with a better cost structure would allow it to return to profitability in the coming quarters.

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