In a recent article, we looked at Alcatel-Lucent (ALU) in its past and what it looked like for 2012. Now let's look at the company's future and potential.
When the company first shared its vision of lightRadio, it was a radical shift in thinking with new hardware needed. The challenge the company faced was how to implement this concept of lightRadio into existing networks. It would take a lot of capital and time-- up to three years or more to realize.
This "shared vision" was back in early 2011. We are just about at the end of year one. Investors have to deal with the idea that lightRadio as a large income producer for the company is still "a work in progress."
Educating various operators how lightRadio fits into their networks takes time. It is going to take a numerous alliances to bring this vision about. Just as Hewlett Packard (HPQ) is working with them-developing the processing platform that will control the load of the cube and components on the (SoC). More alliances are needed
The company is systematically building other joint ventures. It is helping Cross Wireless, doing business under the Sprocket Wireless brand. They are bringing super-fast mobile broadband to parts of eastern and southeastern Oklahoma in the United States. Based upon 4G LTE, it will effectively widen mobile broadband access options throughout the region. They are doing the same thing in the southwestern U.S. States of New Mexico and Texas where a 4G LTE service by Penasco Valley Telecommunications is being developed.
These are the types of alliances and joint ventures Alcatel-Lucent will need in the next few years. Its opportunity will continue to expand as LTE becomes more of the norm in wireless. Mass adoption of mobile devices such as smartphones and tablets has led to increased demand for access to Internet services while on the move. This has become what consumer have expected and it works out well for the company's vision.
The increasing number of streaming online services such as sports coverage, movie rentals and Internet gaming requiring the higher bandwidth and higher speeds that 4G LTE delivers.
So the interest in investing in Alcatel-Lucent now is not based upon what they are producing, but the potential to what they can bring to the wireless industry as the new network architect on the block. It will have to deliver the full vision it has shared or risk derailing the whole thing. Competitors are already popping up like Nokia's "liquid radio" service.
The stock does look like a great value right now. Its potential is incredible and growth without limits right now. A long term investment in the company could pay off well.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
