Investing is a game of prediction. In every age, there exist mad scientists working away at a revolutionary products that the public may or may not run with.

Case in point: the Beta Max was a craze that many thought would change the way the world watched movies but alas to some mad scientist's dismay, it petered out without a fight. On the other hand, the DVD did change the way we watched movies and so much more. What defines a flop and more importantly how do you spot it ahead of time? Smart long term investing boils down to three things: spotting a trend worth investing in, analyzing the companies worth investing in within that trend, and then ultimately the trend actually taking off.

With On World Inc. estimating that the number of VoIP users worldwide will balloon from 16 million to 207 million between 2006 and 20011 - when In-Stat forecasts the market to be worth $44 billion - players of all shapes, sizes and colors are foaming at the mouth to tap into telecom's hottest segment.

And there's more than enough to go around. With TeleGeography Research estimating that international VoIP traffic grew by nearly 40% in 2006 to account for more than 20% of the world's total; and some analysts hypothesizing that VoIP will indeed replace traditional telephone service for the majority of users in the not-so-distant future; opportunities to cash in on the VoIP craze are popping up in every corner of the globe.

However, despite the grandiose sales wins to be made with VoIP, the market remains one of the most fragmented known to man. Although this portion of the telecom industry will likely consolidate over time much like they way the broader market has; for now, everybody and their brother is trying to make a buck off of VoIP. In addition to traditional VoIP plays such as Vonage (NYSE: VG) and Skype - an eBay company - (NASDAQ: EBAY), everybody from traditional telecoms and cable service providers such as AT&T (NYSE: T) and Time Warner (NYSE: TWX) to alternative service providers including Level 3 Communications (NASDAQ: LVLT), Ibasis Inc. (NASDAQ:IBAS), ATSI Communications Inc. (OTCBB: ATSX), and Rapid Link Inc. (OTCBB: RPID) are gunning for sales dollars.

Different Geographies = Different Market Dynamics

The domestic and international markets are characterized by a set of distinctly different dynamics. VoIP has become more of a "value play" in the U.S. and in other economically developed regions as consumers adopt the technology due to the availability of new value-added services and features (web-based software, instant messaging, mobile communications, etc.) that provide a higher level of functionality and efficiency over traditional telephony.

On the other hand, in less-advanced markets including the recently de-monopolized Latin America region where governments such as Mexico and Brazil have loosened their grip on telecom; VoIP is being implemented at a record clip, largely due to its ability to facilitate enormous cost savings on long-distance conversations. In my opinion, we're moving slowly but surely towards flat rate calling, or heck, even free calling, once advertising gets thrown into the mix in an efficient manner as it has online. Due to this possibility, providers should likely start optimizing their offerings now before it's too late, especially those relying heavily on the wholesale process to keep the lights on.

Collusion, Collaboration Paramount for Smaller Industry Players

So, with the domestic market completely saturated on a competitive level for all intents and purposes, focus is shifting elsewhere. And rightfully so - with In-stat forecasting the consumer market to reach $44 billion in 2011, when the U.S. accounts for a mere 18% of the total why not go where the growth is? But how does a small fish in the big global telecom pond survive, or better yet protect margins and maximize revenues with all of this competitive pressure? I believe that answer lies in consolidation, collaboration, and collusion amongst players of all sizes.
Now That's What I'm Talking About!

A perfect example of what I'm talking about is the recent decision by Rapid Link Inc. (OTCBB: RPID) to acquire Web-Breeze Networks, LLC, and Communications Advantage, LLC. See Press Release

Although the International space remains a game of arbitrage, with wholesalers cashing in on their ability to provide the cheapest per-minute rates possible, eventually markets in developing nations will mature and demand a greater level of functionality and robustness out of their VoIP providers. As such, industry players such as RPID must fortify and diversify their offerings to make them more appealing to consumers on a global level. How else can they compete with the budgets and the brains of the Verizon's and AT&T's of the world?

By executing this most recent acquisition, Rapid Link gains a vast array of new capabilities and value-added services including, but not limited to: Worldwide Web-hosting Service, Full Service Web- based Email Services, nationwide Dial-up Internet access, national IP Voice Messaging and Fax Messaging service and over 800 long-distance customers using One Plus dialing, Nationwide 800, and Travel Card services with customers in every state. With names like Verizon, Qwest, Sprint and Time Warner playing in their own backyard, this purchase was a very slick move on behalf of management. It may not revolutionize the company, but it sure is a good start.

Moreover, this addition should strengthen the company's global footprint as it significantly enhances Rapid Link's offering and makes it more attractive to a wider consumer audience. Although the aforementioned ongoing VoIP industry arbitrage should continue for awhile, particularly in regions outside of the U.S., wholesalers are seeing margins erode quickly as the average price per minute of voice- traffic falls by the wayside.

Providers Can't Win on Cost Alone!

Successful wholesalers such as ATSI Communications Inc. (OTCBB: ATSX) - a company that has grown revenues from $1.3 million to $30 million between FY2004 and FY2007 - are now faced with the option of either tacking on extra capabilities and value-added services to their current offerings through any means necessary, or going head to head with the world on cost alone, a seemingly impossible battle to win.

For the record, ATSI has logged 12 consecutive quarters of record revenues, 5 consecutive quarters of positive cash flow from operations and 3 consecutive quarters of net positive earnings per share. Management has a deep understanding of the market, especially the Latin American region, and holds a unique long-distance concession license with the Mexican government (Mexico is the number one producer of voice-traffic with the U.S.).

In my opinion, if you combine this thriving wholesale biz with an innovative service offering, Voila! We're looking at an International VoIP powerhouse. From there, opportunities with upper tier players become more achievable as the company is able to offer something more than simply cheap minutes. From what I'm seeing, growth through acquisition and/or partnership is the most logical way from companies like ATSX and RPID to take their businesses to the next level and keep them there.

With the VoIP industry on the verge of tremendous growth in regards to subscribers, revenues, and potential technology applications, those willing to "play ball" with others in the industry possessing synergistic and/or complementary offerings will be the one's that thrive, while others close their doors for good. This is just some food for thought on the appetizing trend of VoIP. There is so much out there and this is the time to do your homework on it!

Labels: ATSI Communications Inc., IBASIS, Level 3, Time Warner, Verizon

Don't be surprised if you see Nighthawk Systems Inc. (OTCBB: NIHK) inking deals with a growing list of big name organizations - as well as Verizon Wireless - in the not so distant future.

Once you get your foot in the door with a leading provider like Verizon Wireless, you are definitely rolling with the big dogs!

Verizon comes back for more!


Announcing a third order from Verizon Wireless and the successful implementation of statewide generator automation project in New Jersey today, NIHK has positioned itself at the forefront of what is shaping up to be an energy industry revolution.

If you think about it, Verizon did not get where they are by working with sub par providers or by continuing to order a product that did not perform as it should. You have to give a little credence to NIHK - first for landing Verizon as a client - and second for keeping them!

The Garden State Goes Green

The project referenced in today's news was centered on compliance with State of New Jersey mandates that prohibit the use of diesel generators of 37kW or greater from being used in non-emergency situations - other than on allotted days.

Since New Jersey is highly likely to be the first but not the last state to impose such legislature, meeting and exceeding Verizon's expectations creates a very favorable initial implementer position for NIHK and also boosts the confidence of one extremely valuable partner. And with Nighthawk as Verizon's premier provider, I don't see how Nighthawk can lose here.

From the source...

Commenting on the project, H. Douglas Saathoff, Nighthawk's CEO, stated "I'm extremely pleased that we were able to customize and provide a quick and reliable solution to Verizon Wireless for this project. Over the past six months, we've delivered units that allow them to control hundreds of generators throughout New Jersey from a single centralized location, or from multiple field locations. This gives them the ability ensure that their generators are in working condition, while maintaining compliance with recently adopted state rules governing the use of generators."

I'm not sure if the plan was drawn up like this - or if the chips just all fell into place that way, but Nighthawk sure is succeeding from a marketing/brand awareness standpoint (amongst others). Obviously, the Verizon Wireless relationship is invaluable on many levels and recent deals with DaimlerChrysler turn heads in a major way - but it just may be NIHK's success in "Green Applications" that make Nighthawk a household name..

Just The Facts, Ma'am...

To get a handle on what the impact of an eco-shift in a state like New Jersey can do, we did a little research. Honestly, this just added to our assertion that NIHK is a keeper.

In the near future, other states will likely take steps, just as New Jersey did, to reduce air pollution. Besides the obvious benefit of boosting air quality, that also means added demand for NIHK products.

Consider these facts (courtesy of Santa Barbara County Air Pollution Control District):

1. Diesel soot, or diesel particulate, is the number one airborne carcinogen in California (and many other states), and represents the state's most significant toxic air pollution problem.

2. California Air Resources Board estimates that operation of an uncontrolled one-megawatt diesel engine for only 250 hours per year would result in a 50 percent increase in cancer risk to residents within one city block.

3. A typical standby diesel generator produces 25-30 pounds of nitrogen oxides (NOx) per megawatt hour of power generated, 50 to 60 times the NOx pollution produced per megawatt hour by the typical mix of California gas-fired power plants. Nitrogen oxides are a smog-forming pollutant

4. The state of California has already imposed regulations on portable smog-causing generators used in a plethora of industries that exceed pollution limits. The next logical step in the progression of CA mandates is increased focus on stationary generators as well as regulation of use in non-emergency situations.

Nighthawk showed up on our radar as a promising company with revolutionary products, strong sales and organized management. However, it has done what so many small companies cannot do - it has tapped the corporate market to put its products in the mainstream. These days however, it not only shows great potential with heavy hitter customers and cutting edge products, but with recent efforts to address environmental concerns, it meets a fast growing demand.

If Nighthawk is able to establish a position as a provider of environmentally beneficial technology offerings and continues to optimally serve highly esteemed clients such as Verizon Wireless and DaimlerChrysler - the potential for future growth is unbounded.

Labels: Nighthawk, Nighthawk Systems, Nighthawk Systems Inc., NIHK, Verizon, Wireless

Good morning to all. The following press release went out this morning and announces the second sale of our PT1000 remote control boards to this customer, the largest wireless company in the U.S. in terms of revenues produced. The first shipment to this customer was made this past December, and was the largest single sale made during 2006. This sale gets 2007 off to a great start! Terms of the purchases state that I cannot name the customer without their permission, but I believe that most of you know who it is by now. While I believe we could ultimately get their permission to use their name, experience has shown me that this takes a long time and I felt that it was important to let you and the public know about it sooner rather than later…
This customer will now utilize Nighthawk devices to remotely start generators at their cell sites throughout New Jersey in order to comply with new state regulations on air quality. The first order was for Northern New Jersey, and this order is for Southern New Jersey. These are two separate operating divisions of the same company. The second order was received after presentations were made internally by the Northern division to other divisions, and after some of the units were installed and successfully utilized by the Northern division. While not all states have adopted similar regulations, we feel that they will soon. This market could prove to be very beneficial to Nighthawk – other companies face similar issues within and beyond New Jersey. This customer obviously has a lot of cell sites around the country.
I’m extremely pleased to receive this second order. We were confident that they would like the product, and the level of service that we have given them in customizing the firmware in the product to meet their special needs. The second order verifies that they value what we have to offer, and they will be a great customer to showcase to other potential customers. The Nighthawk brand is out there in front of more people than ever before, and it shows in the inquiries that we get and the sales that we are making.
Have a great day!

Doug

Nighthawk Systems Receives Second Order from
Largest US Wireless Provider
-- Products For All New Jersey Cell Sites --


SAN ANTONIO, TX – 1/9/07 - Nighthawk Systems, Inc. (OTC BB: NIHK), a leading provider of intelligent wireless power control and emergency notification products, announced today that is has received a second order for its PT1000 remote control boards from one of the largest US wireless voice and data companies. Nighthawk announced in December that the customer was placing Nighthawk products at cell tower sites in Northern New Jersey. This second order will enable Nighthawk devices to be deployed at cell sites throughout the State of New Jersey.

The customer will use the PT1000’s to comply with rules recently adopted by the New Jersey Department of Environmental Protection that restrict the use of diesel generators on days when the air quality in New Jersey is deemed to be at unhealthy or hazardous levels. Utilizing custom firmware developed by Nighthawk specifically for the project, the customer can wirelessly turn the generators on and off on demand, ensuring that they are not tested or exercised on days when such use is prohibited.

H. Douglas Saathoff, Nighthawk’s CEO, stated, “I’m extremely pleased to receive this second order, which was placed after units from the first order were successfully installed. Their first order, which was shipped in December, was the largest single order for 2006 in terms of revenues to the Company. This second order keeps the momentum going. We hope to continue working with this customer to meet their growing needs.”

Diesel generators must be exercised regularly to ensure that they are in working order when emergencies occur. Historically, pre-set timers have been used to automatically run generators on scheduled days. The new regulations in New Jersey restrict diesel generators of 37kW or greater from being used in non-emergency situations to ensure that New Jersey’s air quality does not get worse on days with unhealthy air. Therefore, diesel generator operators must find a way to exercise the generators on allowed days, even though they cannot predict those days ahead of time.

About Nighthawk Systems, Inc.

Nighthawk is a leading provider of intelligent wireless power control products that enable simultaneous activation or de-activation of multiple assets or systems on demand. Nighthawk's installed customer base includes major electric utilities, internet service providers and fire departments in over 40 states. Nighthawk's products also enable custom message display, making them ideal for use in traffic control and emergency notification situations.

Individuals interested in Nighthawk Systems can sign up to receive email alerts by visiting the Company’s website at www.nighthawksystems.com.

Forward-looking statements
Statements contained in this release, which are not historical facts, including statements about plans and expectations regarding business areas and opportunities, acceptance of new or existing businesses, capital resources and future business or financial results are "forward-looking" statements. You should not place undue reliance on these forward-looking statements. Such forward-looking statements are subject to risks and uncertainties, including, but not limited to, customer acceptance of our products, our ability to raise capital to fund our operations, our ability to develop and protect proprietary technology, government regulation, competition in our industry, general economic conditions and other risk factors which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable, they relate only to events as of the date on which the statements are made, and our future results, levels of activity, performance or achievements may not meet these expectations. We do not intend to update any of the forward-looking statements after the date of this press release to conform these statements to actual results or to changes in our expectations, except as required by law.


CONTACT:

Doug Saathoff
dsaathoff@nighthawksystems.com
(877) 7-NIGHTHAWK, Ext 701

Labels: Nighthawk, NIHK, Verizon, Wireless

Nighthawk Hits It Out of the Park!

Up nearly 90% from yesterdays close to this mornings high, NIHK seems to have really generated some momentum with its most recent news.

The last two times we have brought trade alerts on this company to the attention of our subscribers, have been a great successes. Today, there are three areas worth consideration, one with relation to product, one with relation to financials and one in relation to the chart. All are encouraging and two are record setting for Nighthawk Systems Inc. (OTCBB: NIHK), a company specializing in wireless technology.

As always, we are here to dissect and analyze developments in promising small-cap ventures. We see a strong short term entry point in a company we believe to be a long term success.

First off, anytime a company comes out with great revenues, it deserves a little attention. However, when NIHK came out with year over year Q3 improvement of 92%, we got whiplash! It's these kind of numbers that speak for themselves. And yet, this is only one reason we see great things are in store forNIHK.


In other news, NIHK announced just this morning that a large customer had purchased an unprecedented amount of their product. Financial growth and sales growth equals growth for shareholders!

News of an initial order for "hundreds" of its PT1000 remote control boards from"one of the largest US wireless voice and data companies" is more than promising. It is outright indicative of the progress that NIHK has made in 2006 and also of what the future holds for Nighthawk. But who is this unknown customer? The wording in the release states that NIHK has had a previous relationship with this blockbuster client. That leads us to believe that it is none other than industry giant Verizon Wireless.

So why no mention of the customer's name? For such a large order, it seems in everyone's best interest to name all parties involved. Although at first a bit foreign to investors, this type of action is quite common. Organizations of this size are very, very reluctant to put their name out in the press, particularly in the corporate announcements of their clients and technology suppliers. Either way, this new customer (the people who never stop working for you?) has agreed to buy, what seems to be, record amounts of NIHK's products. And this is just the initial order!


Although today's news is possibly the biggest in company history, its implications for the future are even more exciting. Think about it for a second. NIHK's products, in this case, will be used to aid the New Jersey Department of Environmental Protection in improving air quality. By restricting the usage of diesel generators "on days when the air quality in New Jersey is deemed to be at unhealthy or hazardous levels", NIHK's products will improve the quality of life for the residents of Northern New Jersey and likely those of New York as well.

With thousands of diesel generators across the country currently wreaking havoc on our breathing supply, a successful venture in New Jersey could lead to nationwide adoption of NIHK's products for this application. Throw in the fact that as "one of the largest US wireless voice and data companies", NIHK's new customer may just know the right people in the right places to make that happen. Can You Hear Me Now?

The previous two trade alerts on NIHK turned out quite successful for our followers. NIHK stock climbed over 30% following our September alert (also pick of the week) and nearly 100% proceeding the October alert.

Labels: Nighthawk, NIHK, Verizon, VZ, Wirless