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Wi-Fi is a great thing as long as you have immediate and easy access to the signal and don’t find yourself chasing it around the room just to stay connected.
The problem is many Wi-Fi signals are weak. They can get blocked or redirected, or they lack the capacity to support multiple devices.
Ruckus’ technology addresses Wi-Fi capacity and coverage problems caused by the ever-increasing amount of traffic and noise or interference on wireless networks, mainly due to a rise in the use of smartphones and tablets.
Its gear is in high demand amid a corresponding boom in demand for more and better Wi-Fi technology.
“Because of the smartphone phenomenon, data capacity keeps expanding, and Wi-Fi has become the de facto way users want to connect,” said David Callisch, Ruckus’ vice president of corporate marketing. “Our innovations transform Wi-Fi into more of a wire like experience in terms of reliability.”
It does so by providing a stronger, more direct signal for users, Callisch told IBD. That’s important because so many different factors can disrupt a signal.
“If you are in a warehouse, for example, every time something changes or moves, the Wi-Fi environment changes,” Callisch said. “If you have 50 different access points, you can’t go changing all the antennas at once.”
Ruckus‘ technology creates a “dynamic” antenna that moves the Wi-Fi signal around the same way a lighthouse moves its beam, he says. “Because it is focused, the signal is inherently stronger, so users get higher data rates.”
Many of Ruckus’ customers are small and midsize enterprises that want to deliver better Wi-Fi services to staff and customers.
“Their antenna technology is far superior because it works in high-density environments like hotels and factories. Factories have a lot of cement, and hotels have a lot of walls, and you need a strong signal for Wi-Fi to work effectively,” said Catharine Trebnick, analyst at Dougherty, an investment bank and brokerage firm.
Ruckus’ customers also include service providers, such as telecoms and cable companies, that want to gain more business by providing better Wi-Fi services to customers.
“Cable operators are using our Wi-Fi technology to enable them to reduce churn with subscribers,” Seamus Hennessy, Ruckus’ chief financial officer, told IBD. “Ruckus is benefiting because our core technology lets the network operate almost like a utility.”
Apple Watch, Google Fiber
Ruckus is expected to land more business as new products such as smartwatches grow in popularity.
“Apple ( AAPL ) and Samsung have launched mobile watches, and that’s going to require even more Wi-Fi,” analyst Trebnick told IBD. “Wi-Fi is becoming ubiquitous, so that’s the driver that’s not going to ever go away.”
She says Ruckus also stands to benefit from Google ‘s (GOOGL) fiber-optics network, which got started around Kansas City, Kan., and has expanded into Provo, Utah, and Austin, Texas. Google is expected to roll out the Google Fiber fast-broadband service into more than 30 U.S. cities as well as other countries.
Among the customers that Google wants to target with the network are small to midsize businesses, Trebnick says.
“It hasn’t been confirmed, but everybody believes Ruckus will be one of the primary suppliers of Wi-Fi when Google does this,” she said.
Ruckus executives wouldn’t comment on the Google Fiber rumours.
For now, the company has plenty of business to keep it occupied. Ruckus was founded in 2004 and had its initial public offering in November 2012. It has been profitable since 2009 and expects to keep growing those profits in coming quarters and years.
“We’ve made significant investments in R&D over last few years, and we’re now at a position where revenue is growing faster than R&D spending,” Hennessy said. “We have also achieved operating efficiencies that led to higher gross margins.”
“We are in a significant growth cycle for Wi-Fi over the next couple of years because of the proliferation of devices,” Hennessy said. “We feel we are in a good position to take advantage of that because of our technology.”