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Semtech Expands Deal With Helium to Boost LoRa Adoption

Semtech Corporation SMTC recently expanded the partnership with Helium. The deal aims to expand deployments of network based on the LoRa technology.

Helium Inc. is an Internet of Things (IoT) developer platform founded in 2013. In order to use the Helium network, users need to deploy a Helium Hotspot device that will allow them to operate a LoRa-based wireless network for IoT.

Earlier in March, the company partnered with Helium to develop a LongFi network based on the LoRa technology in North America.

Post the partnership, Helium made its network available to more than 1,000 cities in North America and Europe. The company has now made the network fully compatible with Semtech’s LoRa wide area network (LoRaWAN) protocol.

In addition, post the initial collaboration, more than 10,000 Helium Hotspots were sold, in turn expanding top-line numbers of both the companies.

Semtech Corporation Price and Consensus

Semtech Corporation Price and Consensus

Semtech Corporation price-consensus-chart | Semtech Corporation Quote

LoRa Technology Adoption Expands

Semtech is witnessing growing strategic alliance and contracts, thanks to cost-efficient abilities of the LoRa technology in creating as well as deploying IoT solutions.

Just last month, Semtech announced that New H3C Group (H3C) has unveiled new smart door lock applications based on Semtech’s LoRa devices and its related technology. These smart door locks are expected to help management staffs efficiently monitor security and safety in large campuses like hotels, dormitories, schools, colleges, universities, among others.

The LoRa Technology enables long-range connectivity of IoT devices and aids in connecting sensors to the cloud. Its long-range performance and low power consumption requirement enhance overall performance. Moreover, this technology helps in real-time communication of data and analytics to enhance efficiency, as well as productivity.

Consequently, the latest move is likely to further boost the adoption rate of the company’s LoRa technology, which in turn will drive the top line.

IoT Market Prospects

IoT devices have been gaining significant traction in recent times. These devices have been successful in making an impact across all end markets served by the company.

Per IOT Analytics, the number of active IoT devices is expected to grow from 7 billion in 2018 to 10 billion and 22 billion by 2020 and 2025, respectively, including devices on the consumer and enterprise side.

Presently, LoRaWAN networks are operating in many countries. It expects the LoRaWAN open protocol to reach more countries in the near term. Industry experts expect four out of every 10 long-range IoT connections to be powered by LPWAN, with LoRaWAN being the dominant player.

We believe Semtech is well poised to rapidly penetrate the expanding IoT market, aided by the highly popular LoRa technology.

Zacks Rank & Stocks to Consider

Currently, Semtech carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Dropbox DBX, Lam Research Corporation LRCX and Maxim Integrated Products, Inc. MXIM. While Dropbox and Lam Research sport a Zacks Rank #1 (Strong Buy), Maxim carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate of Dropbox, Lam Research, and Maxim is pegged at 34.4%, 15.4% and 10%, respectively.

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