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Keysight (KEYS) & OPPO Establish First 5G Test Lab in China

Zacks Equity Research

Keysight Technologies, Inc. KEYS and OPPO announced that they have established a lab for 5G  test and design solutions in Shenzhen, China, to stimulate the 5G ecosystem across the country.

The lab will aid in advancing new technologies and solutions. Notably, the latest facility will deploy Keysight’s 5G network emulation solutions to facilitate end-to-end processes from development to deployment, accelerating the 5G device architecture. The solutions offer cost-efficient test techniques, with high flexibility and control capabilities.

Equipped with Keysight’s robust 5G new radio (NR) solutions, the lab will help the China-based smartphone manufacturer, OPPO develop, test and improve 5G solutions. Further, OPPO will leverage 5G test solutions of Keysight to advance the development and validation of its 5G smartphones along with accelerating time to market. Keysight offers comprehensive Layer 1-7 test, deep network and precision measurement visibility solutions to ensure minimal risk in the development of 5G-based technologies.

On Nov 29, 2019, OPPO deployed Keysight’s robust 5G new radio (NR) UXM-based network emulation solutions, which enabled the former to introduce a 5G video call. This bodes well for OPPO’s commercially available 5G smartphone.

Per Kailash Narayanan, vice president and general manager of Keysight's wireless test group, “This joint lab is a key milestone in our 5G collaboration with OPPO to help them deliver on their 5G strategy and bring leading 5G devices to the market.”

The companies have teamed up to accelerate 3GPP (3rd Generation Partnership Project) 5G New Radio (NR) specification. We believe that the adoption of Keysight's 5G testing and design solutions will bolster the top line. Moreover, new customer wins are expected to help the company expand presence in China.

Shares of Keysight have surged 55.1% year to date, outperforming the industry’s growth of 37.5%.



Promising 5G Trends Boost Growth Prospects

Per ResearchAndMarkets data, the global 5G market is expected to reach $251 billion by 2025, seeing a CAGR of around 97% from 2020. Further, per MarketsandMarkets estimates, the communication test and measurement market is projected to attain a $6.69-billion value by 2020, witnessing a CAGR of 9.3% from approximately $4.28 billion in 2015.

Intensive infrastructure investments in 5G push and positive trial testing results are tailwinds in this regard. Smart connected homes, hospitals, factories and cities along with self-driving vehicles are key beneficiaries of 5G.

5G Initiatives to Benefit Top Line

Keysight’s 5G collaborations with the likes of ASUS, Motorola, Verizon Communications and Qualcomm Technologies, Inc., a subsidiary of Qualcomm Incorporated QCOM, are enabling it to achieve 5G commercialization-related milestones.

The company has been securing notable customer wins on the back of its strength in the 5G product portfolio, comprising a comprehensive set of test and design solutions. Its solutions enable telecom companies to accelerate 5G deployment.

Keysight’s sustained focus on launching solutions for growth markets like 5G, Internet of Things (IoT) and high-speed datacenters augurs well for the top line.

Additionally, acquisitions of Ixia, Anite and AT4 Wireless have enriched the company’s 5G solutions portfolio.

On the heels of these factors, we believe Keysight to be well-poised to capitalize on the ongoing upbeat trends in the 5G market and strengthen its competitive position in the domain.

Zacks Rank & Other Stocks to Consider

Keysight currently sports a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the broader technology sector are Alibaba Group Holding Limited BABA and Pure Storage, Inc. PSTG. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Alibaba and Pure Storage are currently pegged at 28% and 19.99%, respectively.

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