Cisco, Intel, Synopsys On Fast Track In Internet of Things: RBC

By REINHARDT KRAUSE, investors, Aug. 15, 2016 – 

Cisco Systems (CSCO), Intel (INTC) and Synopsys (SNPS) are among the best positioned hardware and software companies for growth in the Internet of Things (IoT) -- industrial, medical, automotive and consumer devices connected wirelessly to the Web -- says RBC Capital in a research report.

Companies targeting IoT growth have stepped up acquisitions, wrote RBC analyst Mitch Steves.

Cisco in March acquired Jasper, an IoT software provider, for $1.4 billion. Intel in April bought Arynga, which provides wireless software to update automotive IoT systems. Japan-based telecom conglomerate SoftBank (SFTBY) in July said it would buy chip designer ARM Holdings (ARMH) for $32 billion.

"While ARM (acquired by SoftBank) was the leading player in semiconductor intellectual property, Synopsys is second with 15% of revenue tied to IP -- benefiting from complex chip design and miniaturization," said Steves.

Web-connected devices are expected to transform factory automation, agriculture, utilities, health care, retail and insurance industries. Amazon.com's (AMZN) cloud computing service, General Electric (GE) and phone companies AT&T (T) and Verizon Communications (VZ) are among those targeting IoT markets.

"We think the software platform is the most attractive segment within the broad topic of IoT, as cloud-based software platforms allow companies to obtain real-time visibility and monitoring," said Steves. "For the design side, we think companies that provide software to create increasingly complex chips (miniaturization) will also benefit from IoT growth."

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