The Ladenburg analyst sees Field Shield as being a key driver for revenue growth over the next two years as CLFD's product is highly differentiated from competitive solutions. He forecasts a tripling of Field Shield revenues over the next 2 years from 20% of overall revenues in 2016 as several Tier 1 & 2 players roll out FTTH deployments in earnest and adopt this product. Field Shield effectively doubles CLFD's revenue potential per home.
IMO Field Shield has the potential to do for revenues over the next 5 years what the Clearfield Cassette did for revenues over the last 5.
AT&T backtracks on threat to halt fiber rollout. Company Assures FCC It Will Pursue Plan to Expand GigaPower Fiber Network
"AT&T Inc. on Wednesday backpedaled from a threat to freeze the rollout of its ultrafast Internet service because of uncertainty around government regulation of Internet services.
In a letter to the Federal Communications Commission, AT&T said it isn’t limiting its fiber expansion to the two million homes it committed to as part of its $49 billion acquisition of DirecTV , in contrast to recent comments from its chief executive."
“To the contrary, AT&T still plans to complete the major initiative we announced in April to expand our ultrafast GigaPower fiber network in 25 major metropolitan areas nationwide,” Robert Quinn, AT&T’s senior vice president for federal regulatory matters, said in the letter to the FCC."
They reiterated their "Speculative Buy" rating and dropped their 12 month P/T $.06 from $1.70 to $1.64.
Why bother even changing it.
Another Clearfield customer, cable operator Midcontinent Communications (Midco), announced this week they will be upgrading their entire subscriber base to gigabit speeds starting in 2015. Midco has 600K residential and 55K business subscribers and they plan on using gigabit fiber connections for the business upgrades. On the residential side Midco will use DOCSIS 3.1 technology when it becomes available and will likely push fiber closer to the residence to achieve higher speeds.
Advanced Optoelectronics Inc. (AAOI) announced last week on their quarterly conference call that they will not be shipping their next generation WDM-PON transceivers to Google Fiber. The company took down their 2015 FTTH division revenue projections by 60%. AAOI management stated that Google has decided to forego their new WDM-PON solution and stay with the same technology that they used in Kansas City despite WDM-PON being a more economical solution.
This is an interesting development. Mark Strama, the new chief at Google Fiber, may have got a clear message from above that WDM-PON, which is unproven in large scale builds, presents too much deployment risk. If the priority at Google is to push out a working gigabit fiber network AFAP using proven technology vs. conducting science experiments to shave every penny off the overall cost, this would be a positive development for CLFD.
Consolidated Communications, a telecom service provider who operates in 6 states, announced yesterday they will be upgrading all of their fiber customers in Kansas City to 1Gbps connections. Consolidated acquired the Kansas City assets of Surewest Communications in 2012. Surewest was a long time Clearfield customer who had standardized on their equipment throughout their fiber network.
Just another example of the "Google Effect" which we will likely see playing out time and time again as Google pushes into more cities with their fiber offering and forced the hand of SP's offering inferior copper and under provisioned fiber networks.
OSP Magazine posted an interview on YouTube the other day with Scot Bohaychyk, Clearfield's manager of product marketing. In the interview Bohaychyk states that Clearfield has about 30 plus new products in development. He also says to keep an eye on Clearfield because one of those might be a game changer.
On YouTube search "OSP Magazine" click the link and Clearfield's interview is about 8 videos down.
Gaynor said they had a couple of meetings with Apple but not about the infrared sensors, which are used in the Apple Watch, the question was referring to. Its very possible Apple is investigating what IR technology is out there how much it would cost to bring an IR lens inside the iPhone. No guarantee these meetings will lead to anything as Apple likely has dozens of "science projects" going on at any given time and a lot end up as dead ends. But at least LPTH's IR lens technology was good enough to get them in the door and open up a dialogue.
Gaynor's comments about Seek Thermal (who recently introduced an IR camera add on for iPhone/Android smartphones) were more interesting to me. He seemed optimistic that LPTH could be involved with future projects there, even more so than Flir who is a current customer and maker of the Flir One IR smartphone add on for the iPhone. From Gaynor's comments and what I have read It sounds like Seek Thermal's product is having good success in the marketplace. This could spur on more interest in IR technology for higher volume consumer devices which would obviously help LPTH.
"The CEO just needs to get her act together and start acting liking a grown up with regards to keeping investors informed"
I think she did a good job with that in her recent CEO blog post entitled "We're Certifiable":
"Last week, we crossed another major threshold. Clearfield’s fiber termination process for SC-UPCs and SC-APC on the 900 micron media type has been certified compliant to the Telcordia GR-326-Core requirements. Those in the industry will recognize this as a big milestone. For those of you who are new to this alphabet and numerical soup, let me explain.
This third party validation, by Resolute Technologies, a Boston-based accredited testing facility specializing in fiber optic connector testing, certifies that Clearfield’s performance standards meet the requirements of some of the biggest and most demanding telecom service providers in the country. (Of course, we already knew this.) That means we are authorized to pursue business among these national carriers and helps to legitimize our programs as we pursue additional requirements of the most stringent providers. We realize that we still need to earn their business, of course. But, now one of the many roadblocks has been removed.
The Telcordia GR-326 certification validates Clearfield’s single mode optical connectors and jumper assemblies. We will continue to expand Telcordia testing and certification for our full range of connectorized assemblies.
While we can now extend our reach beyond our traditional tier 3 and alternative broadband carrier customers, I want to be clear that our loyalty to our longstanding customer base will never waiver. Growing up, I often heard the phrase “Dance with the one that brought you.” We will never forget nor neglect those partners that helped to make Clearfield the leading specialist in fiber management and connectivity.
We plan to keep dancing for a long time to come."
Last week the USDA announced the recipients of its Telecom Loan Program and Community Connect Program Awards. Approximately $188mm was awarded via both grants and loans from these two programs. Previously documented Clearfield customers received ~$90mm of those funds (and there could potentially be more). According to the USDA PR the vast majority of these grant/loan recipients (and all of CLFD's documented customers) will use the funding to build out fiber optic telecommunications networks in their respective footprints.
When the Pudong deal was first announced the company filed an 8K with the SEC (Item 1.01 Entry Into a Material Definitive Agreement/ Unregistered Sales of Equity Securities) which is required within 4 business days of entering into such an agreement. By qualifying this event as such, the company would be required to file another 8K (termination of a definitive material agreement) within 4 days of the Pudong deal actually being terminated. So far there has been no such filing.
IMO the company knowing the deal is terminated, not filing the appropriate forms with the SEC and hoping a large shareholder (or any shareholder) doesn't find out about it is insane. On several levels.
On Wednesday Goldman put out a report upgrading access vendors Calix and Adtran from neutral to buy and raised both their price targets. The report stated that the telecom access space has grown significantly slower than other areas of telecom infrastructure (core & edge routing and metro optical) since 2009. Goldman states carriers have underinvested in access over the last 5 years and a snapback in spending is imminent. They feel Google's gigabit fiber push has created an arms race for access equipment which AT&T and Centurylink are starting to participate in and others will follow suit.
Interesting that on Mastec's last quarterly call their CEO reiterated the same thing. Mastec is a large company who was contracted by Google Fiber to do trenching and conduit work in Kansas City and Austin:
"When we talk about 1-gigabit, I think the most important part of the discussion is the size of the opportunity globally in the market. I think you are going to have a number of different carriers that are going to be very active in doing their 1-gigabit work. I think it’s going to create enormous opportunities for the industry. I think the opportunities are much greater than people quite understand. I think we are in for an incredible cycle in that business that’s going to help the whole industry, and quite frankly us and all of our peers."
I think Clearfield's move to get their products Telcordia certified will allow them to address a number of the larger players who will be involved in this access arms race. We know Google Fiber and AT&T are already using CLFD products in varying degrees and my guess is that is just a starting point.
Not so sure about that. From the C.C. on 9/3/2014:
"At this point, we are waiting for a response; they did come back to us and give us some recommendations as to what they would like to see and requested a bunch of information, that we have provided. We believe we complied with the recommendations that they’ve made. And now, we are waiting just to get that approval from the government. Once we have that approval, the deal will close and we expect to get that approval."
JOHN NOBILE: "Please give me a timeframe though for that?"
JIM GAYNOR: "No, I would expect that it should happen in the next, this is speculation on my part, but I would certainly hope that we will get it done in the next month or two."
JOHN NOBILE: "Okay. And obviously, no guarantee in the future?"
JIM GAYNOR: "No."
JOHN NOBILE: "And hopefully, like you said, we will see this soon within a month or two? '
JIM GAYNOR: "Yes, we’d hope so."
It certainly didn't sound to me like Gaynor was giving a one month guarantee from 9/3 on the closing of the Pudong deal.
Well over 150 different apartment and condominium complexes in Austin have signed up for Google Fiber already. This is probably close to 15K individual units. From a competitive standpoint, what property owner wouldn't want his/her complex to have Google Fiber? Its too risky not to sign up as most of their competitors will have the service and they run the risk of losing current or potential tenants. And Google does the install for free. Pretty much a no brainer.
A new infrared smartphone camera attachment was just introduced last week from Seek Thermal, a two year old Santa Barbara based start up. Seek Thermal's product will compete with the Flir One infrared iPhone attachment. The Seek Thermal camera can be used with Android phones and the iPhone and is priced at $199 vs. $349 for the Flir One. The resolution on the Seek Thermal product is 206 X 156 vs. 80 X 60 on the Flir One.
Although we don't know if a LPTH IR lens is in the device, Seek Thermal collaborated with Raytheon to develop this product and Raytheon (as well as Flir) is a LPTH IR customer. Over the next year there will probably be a wave of IR add on devices from a variety of manufacturers. Eventually prices will get low enough for these IR cameras to be embedded directly into a smartphone.
That's the $64K question. Nailing down the timing on this is a virtual guessing game. We know how things played out in Kansas City but there is no guarantee the same timeframes for bookings/revenue will duplicate in Austin.
When Google gives their update in two weeks we should know more about their progress in Austin and when they expect to start connecting the first homes (and possibly even an announcement on some city selections for future Google Fiber deployments).
Google has sent out invitations to the Austin media to attend a mid October briefing on the roll out of Google Fiber. We should get some further clarity on timeframes etc. at that briefing.