Cogo Announces Design Win – Analyst Blog

Cogo Group Inc. (COGO) has bagged embedded solution design wins within the deployment of China Mobile’s new Packet Transmission Network (“PTN”).

 

Cogo already has PTN solution design wins with several leading domestic telecom equipment manufacturers.

 

PTN is China Mobile’s next-generation technology based on Internet Protocol (“IP”) and will replace the operator’s existing SONET network. It is designed to address the continued increase of data traffic by removing bottlenecks at the back end. China Mobile anticipates that the growth of TD-SCDMA (3rd generation) subscribers will accelerate data traffic in 2010 and beyond.

 

Cogo is in a position to benefit from the explosive growth in China, as the company’s design solutions that are used in three major growth areas − telecom, mobile handsets and digital media. Cogo’s strength lies in the 1,000 customers who represent virtually all Tier-1, Tier-2 and Tier-3 players in the markets. We are encouraged by the Chinese governmental monitoring and its physical policy to stimulate its demand. We continue to believe that the Chinese economy growth will exceed that of most other markets. Additionally, it is benefiting from a number of the tailwinds that we believe put Cogo in a unique position to grow revenues in 2010. This includes China 3G, the growth of its export business and other opportunities in the company’s industrial segments.

 

We view the awarding of Chinese 3G licenses to be a watershed event for Cogo and the Chinese wireless market’s benefits from this should accrue to China Mobile and to China Telecom. Its relationships with Huawei, ZTE and Alcatel-Lucent (ALU) should continue to benefit Cogo as it is likely to gain share in the Chinese wireless market. Additionally, Cogo benefits from continuous rapid international telecom growth by Huawei and ZTE.

 

Cogo Group Inc. and its subsidiaries provide customized module design solutions for a diverse set of applications and end markets, serving as a gateway for technology component suppliers to access leading electronics manufacturers in China. The company’s customized module design solutions allow customers to take advantage of technology components from reputable suppliers in an efficient and cost-effective manner, thus reducing their time-to-market and lowering their overall costs. Major competitors include Arrow Electronics Inc (ARW), Avnet Inc (AVT) and Oclaro Inc. (OCLR).