Mobile Computing Powers DecisionPoint - Analyst Blog

Ken Nagy, CFA

Mobile Computing Powers DecisionPoint

DecisionPoint (DNPI) designs, sells, installs and services voice and data communications products and systems for private networks and wireless broadband systems to a wide range of enterprise markets, including retail, transportation and logistics, manufacturing, wholesale and distribution. The combination of its blue chip portfolio of customers as well as the reverse merger combination that should close in the second quarter of 2011 has the firm projecting the top-line to nearly double to $100 million. We see value in the shares and initiate our outperform rating.

Back Drop of Growth
Over the past several years several of the key technologies in the mobile computing industry have matured and improved. Several key technologies have been standardized such as Windows mobile operating systems, Wifi wireless local area networks, and the building out of nationwide wireless data networks such as HSDPA technology and EVDO technology. DecisionPoint designs applications that tailor to that firm’s specific industry. An example would be proof-of-Delivery (POD) system for couriers.

Rather than simply providing hardware and customized software the firm has been shifting its focus to providing higher margin consulting services along with customer driven mobile wireless and RFID solutions. This has the effect of increasing profitability and the acquisition of CMAC should help.

Vertical Markets Shifting
Historically the firm’s largest vertical markets were retail, warehousing, and manufacturing. This is intuitive since each had a large amount of goods in motion which needed to be tracked. While these markets are still attractive to DNPI, new markets have emerged such as Transportation and logistics, and field services such as repair and maintenance, and delivery and inspections. This new group of markets, which cuts across multiple industries and business applications, is referred to as “Field Mobility.” Meaning goods or services are being tracked by field based workforces rather than workers at a single location.

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