Avnet (AVT) Advances in IoT, Offers New Service with relayr

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Electronics and IT distributor Avnet Inc.AVT is steadily expanding its presence in the Internet of Things (IoT) space. The company recently in partnership with relayr announced a unique service, relayr's 5-4-3 Innovation Acceleration process that supports IoT in the U.S. and Canada.

Avnet's channel partners can use this service, which is aimed at providing IoT solutions including analytic platforms, cloud and security technologies, to help their customers in the process of digital transformation and reduce development time.

relayr is an IoT company that enables digital transformation of industries. The company offers an enterprise middleware platform that enables fast and cost-effective development of new solutions, equipment and services for IoT.

Per Colin Blair, vice president of Avnet Technology Solution, "relayr's 5-4-3 Innovation Acceleration process addresses the greatest challenge many of our partners are facing - how to help customers initiate an IoT project."

The 5-4-3 Innovation Acceleration solution is now available on the Avnet Cloud Marketplace. We believe it will enable Avnet to scale up its business and enhance service offerings.

It will enable Avnet's partners to access relayr's enterprise middleware platform, thereby providing its channel partners with better solutions for IoT. It will also enable Avnet to provide powerful, simple-to-use tools that enable fast and cost-effective development of IoT solutions, thus improving Avnet's revenue stream and possibly its market share.

All About IoT

The IoT platform is expected to include billions of connected devices and systems with applications ranging from sensors and mobile devices to home appliances and cars. According to research firm IDC, per the Wall Street Journal, the IoT market could nearly triple in the coming years. In 2014, the global IoT market was worth $655.8 billion and could reach up to $1.7 trillion by 2020.

Both companies clearly see the Internet of Things as the next major market. We believe that such initiatives in the industrial space will allow Avnet to transform its model for the better.

Last Words

Note that Avnet has been taking major restructuring steps to mainly focus on the EM business. The divestment of the Technology Solution division will allow Avnet to focus on high growth areas such as marketing electronic components and related products in the supply chain. The company intends to use its resources to make investments in embedded solutions, IoT and critical digital platforms as well as expand its footprint in newer markets.

Despite the company's strategic initiatives to expand in newer markets, the stock generated a return of just 13.88% over the last one year compared with the Zacks Electronic Parts Distributor industry's gain of 35.67%.

Furthermore, a significant portion of Avnet's revenues comes from the sale of semiconductors, which is a cyclical industry, characterized by changes in technology and manufacturing capacity and subject to significant market upturns and downturns. Intensifying competition from Arrow Electronics Inc. ARW also remains a headwind.

Currently, Avnet carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the technology sector are Seagate Technology plc STX and Western Digital Corporation WDC , both carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here

Seagate and Western Digital has a long-term expected earnings per share growth rate of 8.17% and 5.71%, respectively.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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