Searching for sense and trends in oceans of data and information.

Perhaps Renzi Remains?

Published 12.6.2016
The spotlight remains on Italy, as LWRAS continues to seek the meaning behind the vote and what it will mean for the rest of Europe and its markets. The Italian situation doesn't fit the neat "anti-immigrant, pro-nationalist" narrative that has dominated since Brexit and then Trump. As with most things Italian, there is more nuance to be considered in Italian politics than British or American politics pretend.

Italian Prime Minister Matteo Renzi tendered his resignation, but was asked to delay until his government produced a budget, and he agreed. Thus Italy still has a government. If John Mauldin is to be believed, Renzi’s defeat was due to his delaying the vote. When he first proposed the reforms, most thought they would go through. But given enough time, especially with the internet, any position can be undermined.

For Italians, who have seen 63 governments in 70 years, Monday’s resignation made for a ritual as familiar as the morning espresso, even as the stakes seemed far higher this time. The immediate question is whether the president, usually a ceremonial figure, would form a caretaker government staffed with technocrats. Or convince rival political parties to form a coalition government. Or call for new elections in 2017.

On reason to delay voting is that a new law that changed electoral rules is currently in the courts. The law was intended to keep the major parties safe from minor parties (such as Italy’s version of the populist party that styles itself as the Five Star Movement.
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What just happened in Italy?

Published 12.5.2016
Italians headed to the polls on Sunday to reject proposed changes to the country's constitution that would have increased the power of the Prime Minister. The current Prime Minister Matteo Renzi, having strongly pushed for passage and promising to resign if the referendum was defeated, watched his political career end on Sunday night.

A primary issue with Italy is the country’s debt. Italy is in the Eurozone, having given up its own currency. If the country had its own currency, it could debase that currency to pay off its debts with lira worth less. The bond holders wouldn’t prefer that, but it’s a tried and true methods of getting out of debt.

Writing before the vote, John Mauldin claims that no one knew what was on the ballot— but perhaps only he and his buddies didn’t. The reforms were aimed at making “the government operate more effectively” but it became a referendum on the current government when the Prime Minister Matteo Renzi declared that if the reforms didn’t pass that he would resign.
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LED Spotlight

Published 11.21.2016
Recent and/or interesting items relating to light emitting diode (LED) lighting.

  • Could LEDs be used to help fight Zika and malaria? LED lights are less attractive to biting insects because they are not hot.

    A study completed by academics at Bristol University has found that LEDs attract significantly less insects than other light sources. The paper suggests that the heat emitted by light sources has more of an effect on insect attraction than the colour of the light.

    LEDs were half as attractive as fluorescent lights, which were less attractive than incandescent lights.

  • Light Emitting Diode (LED) market in North America projected to grow at a compound average rate of 9.7% through 2022.

    The General lighting market dominated the North America LED market in 2015, and that trend is expected to continue until 2022, thereby achieving a market value of $ 4,563.6 Million by 2022 growing at a CAGR of 9.5% during the forecast period. The Automotive market is expected to reach a market size of $1,663.5 Million by 2022.

    The US dominates the North American market, to no one's surprise.
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Brexit update: Trump, India, Leaks

Published 11.17.2016
Brexit has the potential to substantially change the European market, hence the process, such as it is, is being monitored here.

If this reporting is correct (always a risky assumption), then 10 Downing Street made no allowance for a Trump victory. Farage isn’t a Tory, so it’s not clear to this observer why he should have special status. He’s a Trump partisan for sure, and he has met with Trump post election.

All signs point to India becoming a huge market for western goods— but the transition won’t be quick. India has real problems, and a problematic history with Britain. Plus, India is trying to get an agreement with the EU. Britain has become much less friendly to Southeast Asians who want to come to Britain and study and work. That will be a real sticking point.
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Trumping optical markets

Published 11.10.2016
Donald Trump will be the next president. How might his policies affect the optics related market LWRAS covers? Since Trump didn't offer many specifics during the campaign, all that can be offered is speculation.

  • Lightwave's editor speculates on Trump's effect on the optical communications market. Net neutrality may be in trouble, although that wasn’t a simple left-right issue, at least among internet users. Municipal broadband pushes will get less support from the Federal government, they’ll have to look for state aid. Trump’s trade positions will cause issues for foreign companies looking to do business in the US, Huawei and ZTE are specifically mentioned. Optical communications manufacturing has been off-shored in recent years, that is likely to catch the eye of the Trump administration, but Congress might be on a different page. Trump is against the AT&T/Time Warner merger. Perhaps he’ll try and break up Comcast/NBC Universal?
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LED Spotlight

Published 11.9.2016
Recent and/or interesting items relating to light emitting diode (LED) lighting.

Telecom mergers are a trend

Published 11.7.2016
Mergers are the rage in telecom at the moment. Why? With interest rates low, money for deals is relatively easy to come by. In the case of network owners buying content providers, the goal is more likely to be trying to get around the Federal Communications Commission net neutrality ruling that designated network owners as common carriers.

AT&T wants to acquire Time Warner. Times Warner has three divisions: HBO; Warner Bros. Entertainment and Turner Broadcasting, which include the cable networks TNT, TBS, CNN and Cartoon Network.

AT&T Inc. (NYSE:T) and Time Warner Inc. (NYSE:TWX) announced the proposed acquisition of the latter by the former for $107.50 per share (approximately $85.4 billion) in cash and stock on Saturday. The cries of concern about the ramifications of the deal began shortly after, from consumer groups, trade associations, and at least one presidential candidate.

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A Bumpy Brexit

Published 11.4.2016
Again it's been more than a month since LWRAS considered the status of Brexit, the United Kingdom's (UK) exit from the European Union (EU). The UK's exit from the EU promises to alter the economic relationships in Europe, an important factor when analyzing the business and market opportunities for technologies and companies. After weeks of political wrangling and stodgy progress, this week there was an unexpected development.

  • The UK's High Court ruled that Theresa May, the Prime Minister (PM), could not go forward with Brexit without approval from Parliament. Parliament must approve the government’s Brexit process before it can begin. Most assume that this will slow but not stop the process. Of course, the ruling will be appealed to the UK Supreme Court.

    Mrs. May would be forced to work with Parliament and consider its competing priorities for Britain’s future. Specifically, she would have to give it a detailed strategy for negotiating the British departure, or “Brexit.” She has adamantly resisted doing so, arguing that this would impede her flexibility in the negotiations, preventing Britain from getting the best possible deal.

    She’s not wrong here. The ruling diminishes her power and control over the negotiations. IN the immediate term, it increases the uncertainty for an already uncertain situation.
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Spotlight on LED lighting

Published 11.3.2016
Recent items of note and brief takes on the topic of light emitting diode (LED) lighting.

  • Maintenance cost savings remain among the strongest drivers for commercial adoption of LED lighting. Niagara Falls will soon be lit at night with LED bulbs rather than 21 Xenon spotlights.

    The current Xenon fixtures have to be replaced every 1,900 hours, however the new fittings will last for twenty years and longer, drastically reducing maintenance costs. The fixtures will also consume much less electricity.

    The new lights will be able to light up both the American and Canadian Falls, something the current lights cannot do. The new lighting will debut in December.

  • Although becoming more commonplace, LED lighting can still be confusing to buy as packaging requirements aren't standard. Color, of course, is always a factor, as is the number of lumens, but too many users ignore the power factor ratings of the bulbs.

    None of the 11 lamps we've tested here had a particularly high power factor. The best was Osram at 0.88 and the poorest were the Aurora and Bell at 0.52. Why does this matter? Because it means that you are drawing more current than might be apparent from just looking at the wattage. An electrician complained to me about this because he had to resize all his fuses in a (large) domestic house purely because of equipment with a poor power factor.

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  • Wireless is killing fiber to the home

    Published 11.1.2016
In a recent piece, LWRAS asked if fiber to the home (FTTH) was dead. Google seems to have rendered the answer to that question in the affirmative, with its announcement that it was "pausing" deployment of Google Fiber. Google was the great hope for FTTH, and it is hitting “pause” because wireless is a cheaper way to go. Google Fiber's CEO also stepped down.

The "pause," as Barratt described it, comes on the heels of reports that Google Fiber had slowed the momentum of its negotiations to deploy fiber to the home (FTTH) in Silicon Valley (see "WAL: Google Fiber's Silicon Valley rollout is delayed while tech giant explores alternatives"). Alphabet Chairman Eric Schmidt and other senior executives have touted point-to-point wireless as a cheaper alternative to fiber (as well as one that likely wouldn't spark issues similar to those encountered in Louisville). The company recently completed the purchase of ISP Webpass, which uses this technology to serve at least some of its customers (see "Google Fiber closes Webpass acquisition").

Google's efforts in FTTH was intended to spur network carriers to begin to build their own FTTH networks. However, that has not happened. Verizon has not expanded its FTTH footprint for years. Indeed Verizon, rather than improving its network, seems to be most intent on becoming a content provider as a means to get around the FCC's* pro-net neutrality ruling.
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Cree— It's all about the margins

Published 10.26.2016
Cree [Nasdaq: CREE] manufacturers light emitting diodes (LED). The company's founder was the inventor of the first stable blue LED, and in 1989 the company introduced the first blue LED into the market. Initially, the company's mission was to develop and fabricate blue LEDs for others to use, but more since 2013, Cree has manufactured actual LED lighting products.

Given its seminal history in LED technology, Cree has an impressive library of intellectual property (IP), which the company protects with litigation when necessary. In May 2016, Cree and Kingbright reached a confidential settlement in their litigation that involves licensing Cree's IP. As the agreement is confidential there's no telling why it was reached, however, to this observer it suggests that Cree's claims were, at a minimum, going to be difficult to get around. However, perhaps one of the two parties was simply tired of paying lawyers' fees.

Although Cree's technology provided it with a leading position in the LED market, as margins in that market have shrunk (and margins always shrink in hardware markets), the company has found it difficult to compete. Nor is this the first time the company has had to reboot. Indeed, Cree is currently re-inventing itself as "Cree 3.0," a company that focuses on LED lighting and related products only.

Cree still sells LED chips, and still collects licensing fees from other manufacturers that use its intellectual property. Its IP fees are falling (this too is inevitable), though the company continues to litigate the issue in court. A few years ago, the company began to produce light bulbs for the consumer market, and has a distribution agreement with Home Depot.
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Through the View Glass

Published 10.20.2016
For October 2016, LWRAS is analyzing companies, technologies and markets related to optics and optical materials. View Glass is today's focus. View Glass is a company that has changed its name a number of times, which LWRAS has previously noted can be a red flag. However, in this case, the name changes, from eChromics to Soladigm and then to View Glass simply reflect attempts to give the company a name attractive to investors. View Glass has a large number of investors, including Corning, Inc.

Corning is considered a bellwether here at LWRAS, and its businesses and investments are watched closely. Corning has a history of correctly identifying future revenue sources, therefore the fact that it backs View Glass is seen as a positive sign for the company. Corning also has a history of forming joint ventures, but to date, there is no indication that such is planned for View Glass (View).

View's electrochromic (EC) window technology is based on stack of layered coatings that are deposited on the inside of a pane of glass that is then sandwiched with another pane. This means that the coatings are protected from the elements. The active layer of the coatings is based on tungsten oxide, a ceramic coating. As an electrochromic window, power is necessary to change the tint of the window. Different colored tints are available. The windows began to be sold in 2013.
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Oclaro turns around with a lead

Published 10.14.2016
For October 2016, LWRAS is analyzing companies and markets related to optical technology. The focus on this day is Oclaro, a publicly traded company that trades on the Nasdaq stock exchange under the ticker OCLR. This profile includes information from Oclaro's 2016 10K and its website. Other sources are linked as required.

Oclaro manufactures optical components, modules and subsystems for core optical transport, service provider, enterprise and data center markets. Essentially the company tries to be a vertically integrated supplier for any and all high bandwidth markets.


Oclaro's product portfolio includes:
  • Tunable laser transmitters

    tunable laser products include discrete lasers and co-packaged laser modulators

  • Transceivers

    coherent pluggable 100 Gb/s and 200 Gb/s solutions for metro and long haul networks

  • External modulators

    … lithium niobate external modulators are optical devices that manipulate the phase or the amplitude of an optical signal. Their primary function is to transfer information on an optical carrier by modulating the light

  • Transponder modules

    … transponder modules provide both transmitter and receiver functions. A transponder includes electrical circuitry to control the laser diode and modulation function of the transmitter as well as the receiver electronics

  • Discrete lasers and receivers

    …portfolio of discrete receivers for metro and long-haul applications includes 10 Gb/s XMD PIN and avalanche photodiode ("APD") receivers, 10 Gb/s coplanar receivers in PIN and APD configurations and 20 Gb/s balanced receivers. We also supply distributed feedback ("DFB") laser die at 10 Gb/s and 25 Gb/s.

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Is FTTH Dead?

Published 10.10.2016
For October 2016, LWRAS is analyzing markets related to optical technology. Fiber to the home (FTTH) is (as the phrase suggests) is a fiber optic network that extends from the transmitter to the end user's residence. FTTH was the long term goal of telecommunication providers, however, the evidence of the past decade is that this is no longer the case. Cable companies are still pushing fiber deeper into their networks, but they are not stringing fiber to homes, except in cases of new construction— so called "green fields." Cable is also taking customers from Telcos that offer DSL, but most of those customers are not FTTH.

FTTH continues to lag in adoption. Google's fiber effort won't make up the difference, except in areas that meet the program's criteria. Google won't bring fiber to any community where it would have to dig to do so. The primary cost of FTTH remains labor. It takes time and effort (and permissions) to dig trenches and lay conduit. There are parts of the world where optical fiber is occasionally buried in the ground without conduit, but the US isn't one of them. Burying naked optical fiber is terrible practice, but it does happen in less developed countries.
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Ubiquitous Energy for Windows and more

Published 10.6.2016
For October 2016, LWRAS is analyzing companies, technologies and markets related to optics and optical materials. Ubiquitous energy (UE) is genuine startup company that spun out of research at the Massachusetts Institute of Technology (MIT) in 2012 that is attempting to commercialize solar coating technology designed to generate power from the sun.

UE’s technology uses standard vacuum deposition techniques, most likely PECVD (plasma enhanced chemical vapor deposition) because UE makes a point to note that their processing occurs at low temperatures.

UE is aiming for to compete in three markets: mobile displays, the Internet of Things (IoT), and solar windows. Based on the company's website and press coverage, that's order of interest. The advantage its technology offers mobile devices and the IoT is battery-less power. The company has working prototypes that it has started to install in the field.
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Solar Powered Windows and Red Flags

Published 10.5.2016
For October 2016, LWRAS is analyzing companies, technologies and markets related to optics and optical materials. SolarWindow Technologies (SWT), a publicly traded company that trades over the counter (OTC) with the ticker WNDW, is the subject for today. SWT makes coatings (its website calls them veneers) for existing and new windows that are designed to produce solar energy. SWT's first target market is commercial windows, though the company recognizes the huge potential market for consumer windows as well. All well and good, but the company also doesn't seem to have a product ready for application in any market.

The public filings for SWT are not available at the Security and Exchange (SEC) website. LWRAS accessed the SEC forms cited below through a brokerage account, thus no links to the source can be provided. The stock is lightly traded with very low volume OTC, and its stock price as of the time of publication is under $5, neither of which recommends it as an investment for most investors, and both of which earn it the descriptor "penny stock".

So why consider the company? When considering potential seminal or game changing technology, the adage, "no risk, no glory" holds. The concept of depositing layers on the windows of skyscrapers that would generate power is alluring. SWT claims to have a "liquid based" coating material that will allow it to put a veneer on the windows of building to generate power. However, even a brief look at the company raises some red flags.
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Sage Glass Smart Windows

Published 10.3.2016
For October 2016, LWRAS is analyzing markets related to optical technology. Sage Glass, a subsidiary of Saint-Gobain (S-G) is the focus today. Sage glass manufactures electrochromic (EC) windows aimed at the commercial market. Electrochromic windows darken when a voltage is applied to the active coatings (typically tungsten oxide). For commercial customers, EC windows can replace traditional window treatments and increase energy efficiency.

Sage started in 1989 in Valley Cottage, New York, then in 2010, Saint-Gobain invested $80 million. In 2012, S-G bought the rest of the company. S-G is a public company that trades on the Paris Stock Exchange, and it had revenues of almost 40 billion euros in 2015. S-G claims to be the largest flat glass manufacturer in Europe and the second largest worldwide. The year 2012 was tough for S-G and its earnings per share (EPS) declined. Since then the EPS has increased, but in 2015, the EPS was still less than 2011.
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Beyond WiFi, Velmenni offers LiFi

Published 10.2.2016
For October 2016, LWRAS is analyzing markets related to optical technology. Today's focus is a start up called Velmenni that has its research and development based in India and in Estonia.

Deepak Solanki and Saurabh Garg started Velmenni in January 2014. Initially, the duo designed different products (traffic light down-counters, vehicle tracking systems, home automation solutions, & etc.) for bigger companies to sustain themselves as they bootstrapped their venture on the side. But they always wanted to work on their own product.

Why Estonia?

In July 2014, Deepak and Saurabh received an incubation offer and seed investment from an Estonian hardware accelerator Buildit. “We’ve implemented our technology in one of the industries in Tallinn, Estonia. Now, we’re back in Delhi, and setting up development team. We’ll market this technology primarily in the European market,” adds Deepak.

LiFi (light fidelity, though no one uses that phrase) is the acronym for the technology that permits data to be sent using visible light signals from light emitting diode (LED) lights. Proponents tout the technology as a way to increase the ubiquitousness of internet connectivity. LiFi (being based on visible light) won't travel through walls, and so is also touted as being more secure. The other advantage LiFi signals have is that they would not interact with other radio signals, unlike WiFi signals.
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From missile domes to projection screens

Published 10.1.2016
For October 2016, LWRAS is analyzing markets related to optical technology. Today's focus is a profile of Severtson Screens, a small private company based in Mesa Arizona. Based on its website, the company has about 20 employees, and online estimates of its annual revenues are over $6 million.

The company makes projection screens for home theaters and cinemas and 2016 is its 30th anniversary. The company was founded in 1986 after inventing a way to deposit optical coatings on dome shapes for the military. This technique was critical for the performance for satellites and smart munitions. Those coatings would function in the infrared portion of the spectrum, but it was likley the technique to coat the odd shape that was more valuable than the design of the coating itself. Uniformity of thickness and structure would be critical.

More recently, Severtson seems to have exited the military optics market in favor of manufacturing high end projection screens. Severtson entered the home theater market in 2003, and in 2009 became a full service cinema screen maker. Its screens have low a rejection rate, which makes them popular. Coatings on projection screens are designed to increase the reflection of light in the visible range of the spectrum. The specific design of the projection screen coating is dependent on the type and placement of the projector to be used to illuminate the screen.
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