SMSI

[la-onda]

bouncing back...

[la-onda]

Smith Micro to Acquire Ecutel Systems, Inc. Bringing Seamless Network Roaming and Secure Connectivity to Enterprise Customers
Tuesday February 6, 9:00 am ET
Smith Micro's QuickLink Mobile in Combination With Ecutel's IPRoam Will Deliver a New Class of Connection Manager Solutions for PCs and Smart Devices

ALISO VIEJO, Calif., Feb. 6 /PRNewswire-FirstCall/ -- Smith Micro Software, Inc. (Nasdaq: SMSI - News), a developer and marketer of a wide range of software and services for the wireless market, today announced it has signed a definitive agreement to acquire privately held Ecutel Systems, Inc., a pioneering developer of standards-based, secure enterprise mobility software solutions. Ecutel's industry leading products, IPRoam and Viatores, provide seamless mobile security to all facets of the enterprise mobile workforce.


The integration of IPRoam and Viatores with Smith Micro's QuickLink Mobile Enterprise connection manager, will allow for a unique connectivity solution that will offer the IT marketplace always-on and secure WWAN (Wireless Wide Area Network) and Wi-Fi (Wireless Local Area Network) connections for mobile users.

"Ecutel's technology is the perfect compliment to our enterprise connectivity strategy and demonstrates our continuous commitment to increasing our business in the enterprise market and providing our existing customers with next-generation connectivity solutions," said William W. Smith, Jr., Smith Micro's President and CEO. "In addition to strengthening our enterprise product offering, we believe this acquisition will broaden our product footprint into the security and device management sectors, allowing us to deliver products that appeal to customers in this high-growth market."

In addition to integrating IPRoam functionality, Smith Micro plans to integrate into its QuickLink Mobile Enterprise product features from Ecutel's IC2 -- a remote enterprise system management solution that enables IT professionals to securely manage their network appliances, servers, and users from any handheld device using any available network. Organizations will now gain full control of their wireless network management functions, and reduce the costs associated with maintaining high levels of system and network uptime.

IPRoam is a client-server software solution that enables seamless network roaming and session persistence, providing mobile workers with always-on, secure wireless access to their enterprise resources, thus solving the critical problems that have long hindered the adoption of true workforce mobility in the enterprise. IPRoam enables roaming and session persistence by using Mobile IP, and additionally adds VPN security for laptops and handheld mobile devices.

Ecutel's EASi agent and policy server is integrated with IPRoam to add borderless endpoint security for mobile devices. Enterprise network administrators can establish, manage and enforce policies for security, access control and device management -- ensuring mobile computing devices are protected and network access policies are continuously enforced for mobile devices connecting to the corporate network.

Pursuant to the terms of the agreement, Smith Micro will purchase Ecutel for $8 million in cash. The acquisition is subject to customary closing conditions and is expected to close in February 2007.

Smith Micro has extensive experience in developing innovative software solutions for the wireless industry. Its leading-edge products simplify communications access over both Wireless Wide Area Networks (WWANs) and Wireless Local Area Networks (WLANs). Over 5 million licenses of Smith Micro's QuickLink Mobile technology have been shipped in just the last several years, making QuickLink Mobile the preferred choice of carriers and end-users alike.

[la-onda]

headlines from last weeks:
http://finance.yahoo.com/q/h?s=SMSI

chart:

[la-onda]

fyi:
Investor's Business Daily
Software Maker Rings Up Music For Cell Phones, Taking On Apple
Wednesday March 7, 7:00 pm ET
Marilyn Alva

The volume is turning up for Smith Micro Software's wireless music business.

Since January 2006, when it launched its Music Essentials kit, Smith's (NasdaqGM:SMSI - News) wireless music business has become its No. 1 sales line. It got a boost in late November when prime customer Verizon Wireless made available Smith's new add-on feature, QuickLink Music Manager.
Music Essentials includes software and hardware and allows users to connect their handsets with their personal computers. The new QuickLink manager is all high-margin software. It lets handset users build and manage their music files.
"Smith provides a user interface for managing music in a similar fashion to iTunes, the 800-pound gorilla" said Anton Wahlman, an analyst with ThinkEquity Partners. His firm co-managed a secondary offering for Smith in December.

ITunes Competitor

"As far as I can see, the Smith Micro product is the first to seriously compete against Apple's (NasdaqGS:AAPL - News) iTunes," Wahlman said.
QuickLink kicked in only about a month or so of revenue in Smith's fourth quarter. But it was a factor in Smith's 169% jump in revenue vs. the year-earlier quarter. Of the $17.2 million in fourth-quarter revenue, music from handsets chimed in to the tune of $8.6 million. That was up from $3.9 million in the first quarter. Much of the rest comes from cable kits and data connectivity products.
Music's in the air. Apple recently said it would bring out the music handset iPhone with partner Cingular Wireless.
Rather than harm Smith, industry watchers say Apple's entry would likely help it. "It would be healthy for the industry as a whole," said James Alexander, an analyst with Jefferies & Co.
Smith execs don't seem too alarmed. "In our minds, the iPhone is just validating the music side of the handset business," said Bruce Quigley, vice president of investor relations. "We welcome that." Smith would also welcome more customers. Other than an Israeli carrier, Verizon Wireless is Smith's only music customer. Verizon also buys Smith's PC connectivity cable kits. Verizon Wireless made up 74% of Smith's revenue in the fourth quarter.
While such a high concentration of sales in one customer is always a risk, analysts say Verizon Wireless isn't likely to leave Smith in the lurch anytime soon.  It's not a bad customer to have. "Verizon is very serious about its music initiative," Alexander said. "It has a lot of advertising spending behind it and Smith Micro is benefiting from that." It's only a matter of time before other customers sign on, some say. Smith's music applications "have unlimited appeal," writes analyst Kevin Dede of Merriman Curhan Ford. "Carrier interest is very high in light of device convergence." Smith execs say they are working to broaden their customer base to include other carriers as well as handset operators. New-customer announcements are in the future, they promise.
In Smith's fourth-quarter earnings report Feb. 28, CEO William Smith said, "We have only begun to touch the surface of the opportunity that lies ahead of us."
Smith's purchase in early February of Ecutel, a security software firm, and its pending buy of Insignia Solutions' assets mean cross-selling opportunities, analysts say. Though Insignia has been struggling to stay afloat, it will bring new wireless data services to Smith's product mix and sales reps in South Korea and Sweden.

Opportunity

Those new selling opportunities wouldn't likely end on a music note. Insignia's ties with 25 wireless operators could translate into sales for Smith's music, image and data applications, writes analyst Dede. In addition, Smith is working to retool its image-compression technology for the wireless market. Known as StuffIt, it hasn't generated much if any revenue. But the company is working to change that. In the recent conference call, CEO Smith said the firm is in "deep discussions" with handset makers to design StuffIt compression solutions into their mobile phones. "They have a number of technologies in the background that have the potential to be a game changer," said Alexander, of Jefferies & Co. He noted that Smith has a trial under way with one handset operator to further compress JPEG files for picture messaging.

Not Just Music

"Smith will make software for other stuff besides music, like pictures and video," analyst Wahlman said. "They're working on it, and they will have something this year." And with $60 million in hand from the December offering, Smith execs are on the prowl to buy new technology and businesses -- especially in wireless.
"We are very focused on becoming, without a doubt, the absolute dominant player in the worldwide wireless software business," CEO Smith said in the call. "And anybody (who) doubts this, they are fooling themselves."
If and when that will happen is still an open question. After nearly tripling last year, Smith's earnings are estimated to rise 26% this year to 87 cents a share, according to a poll by Thomson Financial.

Analysts expect earnings to grow 20% in 2008.

[la-onda]

fyi:
Smith Micro Bags Sprint
By Scott Moritz
Senior Writer
3/9/2007 2:50 PM EST
URL: http://www.thestreet.com/newsanalysis/businessnews/10343567.html

Smith Micro (SMSI) has bagged another big wireless telco customer.

The Aliso Viejo, Calif., maker of devices that transfer media like music between computers and mobile phones is in the final stages of signing a supply agreement with Sprint Nextel (S) , say people familiar with the deal.

Representatives from Smith Micro and Sprint declined to comment.

Though shares sold off Friday, Smith Micro's stock has surged in the past month. Driving the rally have been stronger-than-expected fourth-quarter numbers and the growing assumption that the company's music kits will gain popularity as phone companies try to answer the looming threat of the Apple (AAPL) iPhone, which AT&T's (T) Cingular is planning to sell. The company's Music Essentials product has been popular in recent months with Verizon Wireless, a joint venture between Verizon (VZ) and Vodafone (VOD) . In fact, last quarter's blowout numbers had a lot to do with Verizon. Sales to the No. 2 wireless giant accounted for $12.7 million, or 74% of total revenue in the fourth quarter for Smith Micro, executives said on an earnings conference call last month. Smith Micro's music kit is seen by some industry observers as one of the leading alternatives to Apple's iTunes application. Like iTunes, Smith Micro's kit attempts to be a seamless music management program that allows users to download things like songs and ringtones wirelessly from phone company as well as move playlists back and forth between phones and computers.

Gadget fans say the success of Apple's iPod was built on its simple and effective music management software. This is an area where cell phones have suffered and outfits like Apple stand to make considerable improvements.
"Sprint and Verizon are going to get more aggressive to compete with AT&T's iPhone," says Rich Church, referring to the June arrival of Apple's iPod-inspired mobile phone. To date, most of the phone companies have required customers to handle most of these tasks using the phone companies' software. But critics say the services have been lacking. Verizon Wireless, for example, runs VCast, a media store accessible by PC or cell phone. Songs can be downloaded to phones for $2. But users have to download the song again if they want it on their PCs. Now, with the Music Essentials kit, users can sync songs on both devices. Analysts say Smith Micro gives telcos a music tool to tune up for the competition.

On a conference call with analysts, Smith Micro CEO Bill Smith said Apple's influence on the market would be good for his company.
"It has been very intriguing to watch some of the comments coming out of Sprint with regard to how they view the iPhone and Cingular's launch," Smith said. "Obviously it's going to create a buzz, and that's very, very good for us."

Smith Micro shares were down $1.02, or 6%, to $16.77 Friday.

[la-onda]

1)
Smith Micro Software upgraded to "buy"

Tuesday, March 27, 2007 4:57:38 AM ET
Montgomery & Co
NEW YORK, March 27 (newratings.com) - Analysts at Montgomery & Co upgrade Smith Micro Software Inc (ticker: SMSI) to "buy." The target price has been raised from $19 to $24.
In a research note published this morning, the analysts mention that the company has indicated that it would provide going forward a version of its QuickLink Music product in Sprint's new music application and management software. Although the initial shipment of Sprint Music Manager solution would be available exclusively at Sprint, its availability would rapidly expand to other devices going forward, Montgomery & Co adds. The analysts view the deal as an important step taken by the company to diversify its business away from Verizon.

2)
Smith Micro Previews StuffIt(R) Wireless Windows Mobile Edition at CTIA Wireless 2007
Tuesday March 27, 6:00 am ET
StuffIt Wireless Compression Technology Delivers Solution for Sharing and Storing Images on Windows Mobile Devices

CTIA Wireless IT & Entertainment 2007 -- ORLANDO, Fla., March 27 /PRNewswire-FirstCall/ -- Smith Micro Software, Inc. (Nasdaq: SMSI - News), a leading provider of a wide range of software and services for the wireless market, today announced its new StuffIt® Wireless Windows Mobile Edition, an essential compression utility for all Windows Mobile 5.0 powered SmartPhones and PDA's. The highly-anticipated new version is scheduled for release in the second quarter of 2007; however, CTIA attendees will have an exclusive, first hand-look of the compression solution for Windows mobile devices.
With StuffIt Wireless Windows Mobile Edition, users can compress and send JPEG images via Email and FTP, and compress and open both StuffIt and Zip archives. With StuffIt Wireless users can save money by significantly increasing the storage capacity of both their device and storage cards. In addition to providing full support for the Zip file format, StuffIt Wireless for Windows Mobile includes the StuffIt X file format which allows users to compress files more efficiently, and also allows the compression of file types, such as JPEG images, that Zip is unable to compress. Transporting sensitive documents securely over mobile devices continues to be a major concern for consumers. StuffIt Wireless provides an important file level security layer for IT managers looking to service an increasingly mobile workforce. StuffIt Wireless incorporates standards based AES 256bit encryption to protect files while they are stored on the device, and when they are being transmitted wireless to other users.

"Smart Phone devices based on Microsoft's Windows Mobile platform represent one of the fastest growing and most exciting segments of the wireless market place," said Jonathan Kahn, Senior Vice President and General Manager of the Compression Group. "We are thrilled to extend the support of our StuffIt Wireless technology to cover this important market segment."

Key Features of StuffIt Wireless Windows Mobile Edition:
    -- Ability to compress JPEG images 20 to 30 percent with no loss in image
       quality.
    -- Enables users to compress and send images via email from an internet
       enabled device.
    -- Allows users to compress and send images via FTP from an internet
       enabled device.
    -- Ability to compress multiple images into a single archive to save space
       and speed up transfer times.
    -- Users can browse image archives by thumbnail without having to
       decompress the archive.
    -- Supports Strong 256bit AES encryption when creating StuffIt X archives.
    -- Ability to create and expand Zip archives.
    -- Ability to create and expand StuffIt X archives.


Awesome chart 
waiting for pullback for investment
cheers
Oliver

[la-onda]

another update:
JEFFERIES REITERATES BUY, RAISES $18 TARGET PRICE TO $24
S&P Marketscope -

JEFFERIES REITERATES BUY, RAISES $18 TARGET PRICE TO $24
Yesterday SPRINT unveiled Sprint Music Manager Software, powered by SMSI... Analyst James Alexander tells salesforce a second tier-1 carrier customer clearly validates market acceptance for co.'s music offering... Notes pending launch of AAPL's iPhone's at Cingular has put pressure on industry to respond with increasingly competitive music offerings; Samsung's new Upstage handset is likely only first response with more to come... Based on SMSI's QL Music platform, the Sprint Music Manager product, which set to ship with Samsung's new UpStage in early April, ups target.

&

Smith Micro Software "market perform," target price raised
Wednesday, March 28, 2007 2:36:44 AM ET
Northland Securities
NEW YORK, March 28 (newratings.com) - In a research note published yesterday, analysts at Northland Securities reiterate their "market perform" rating on Smith Micro Software (ticker: SMSI). The target price has been raised from $18 to $20.

[la-onda]

fyi:
Smith Micro Software "buy," target price raised

Thursday, April 05, 2007 9:43:31 AM ET
Needham & Co

NEW YORK, April 5 (newratings.com) - Analysts at Needham & Co reiterate their "buy" rating on Smith Micro Software Inc (ticker: SMSI). The target price has been raised from $18 to $22.

[la-onda]

in @ 19.22

Smith Micro Software "buy," target price raised

Monday, April 09, 2007 2:00:11 PM ET
CE Unterberg Towbin
NEW YORK, April 9 (newratings.com) - Analysts at CE Unterberg Towbin reiterate their "buy" rating on Smith Micro Software Inc (ticker: SMSI). The target price has been raised from $20 to $25.

nice chart also

[la-onda]

nice chart BO 

[la-onda]

Smith Micro Software (NASDAQ: SMSI)
Near Term Upside Appears Limited - Downgrading To Hold

Investment Summary
We believe Verizon is working down inventory of Windows XP SMSI products before launching its Vista supported products. Combined with a recent lull in new music devices at Verizon, near term revenue upside appears limited; a scenario that we believe could also limit upside to the stock from current levels.

please check detailed attachment 

[la-onda]

Full UBS report

1.Verizon Wireless moving to Vista-enabled Music Essentials Kits
With the roll out of the vista operating system, Verizon Wireless is transitioning to vista-compatible kits. While we believe SMSI software is ready, software from a few of its partners and then testing is likely to be required.

2.Verizon likely incentivized in 2Q07; Still comfortable with 1Q07 estimates.
We believe VZW is incentivized to push for timely delivery particularly with the upcoming launch of Apple's Iphone at cingular. While VZW was likely working through existing windows xp compatible music essentials kits stock in 1Q07, we remain comfortable with our1Q07 revenue and EPS estimate of $17.4mn & .17cents respectively.

3. 2Q07 impact dependent upon timely delivery; comfortable with full year
We believe 2Q07 could be impacted if the kits are not ready in a timely manner. By our estimates, .4-1millin in VZW music revenue (current forcast is 8.7milln) would impact EPS by .01, all else equal (opex, estimated kit gross margin of 50%) We remain comfortable with our 2007 est of 84.2mill in revs and .86 in EPS, with potential for upside from sprint and sybase, particularly in 2008.

4. Valuation: reiterate Buy 2 and $23 target
While this could pose an overhang, we believe this issue should be limited to the near term. SMSI reports on may 2. Our $23 target is based on 22x our 2008 pro-forma EPS estimate (ex. options) of $1.04.

[la-onda]

SMSI: Short Interest UP 4.8% to 6.2M in Apr 2007
Tuesday , April 24, 2007 16:21ET

According to new short interest data from NASDAQ, short interest for Smith Micro Software, Incorporated (NasdaqNM: SMSI) INCREASED 4.8% to 6,194,828 shares for the month ended mid-April, 2007.

SYMBOL       MARCH           APRIL          CHANGE       %CHANGE  DAYS/COVER
--------   -------------   -------------   -------------  ------------  ----------
SMSI           5,911,446       6,194,828        +283,382        +4.79%           4

Based on SMSI's 20-day average daily share volume of 1,869,445, it would require approximately 4 day(s) of buying to cover this short interest.

&

Smith Micro Software Schedules Teleconference to Discuss First Quarter 2007 Financial Results
Wednesday, April 18, 2007 16:43ET

ALISO VIEJO, Calif., April 18 /PRNewswire-FirstCall/ -- Smith Micro Software Inc. (Nasdaq: SMSI), a developer and marketer of a wide range of software solutions for the wireless market announced today that it will report its first quarter 2007 financial results following the close of regular trading on Wednesday, May 2, 2007. The news release will be followed by a teleconference available to all interested parties at 1:30 p.m. PDT.

& chart

[livermore]

Great analysis La-onda and coverage.

Do you think that the fall was purely short attack after Jeffries or do you think earnings may be light in future as inventory worked down?

I thought that with Smith Micxro having VIsta related products they are covered in the future.

I have seen before Smith Micro played even when the earnings have been huge. This is one stock that is always played. Interested about your take.

regards

Stez

[rbrychckn]

Agreed - great analysis la-onda.  I'm new to the idea of shorting and how to use that information to understand market interest.  If by saying the shorts need to cover in about 4 days, does that mean they're speculating that the price will drop prior to the 1Q earnings but that it won't necessarily drop after May 2?  Clearly the short interest and your analysis of how long they need to cover are related, but I'm too dumb to understand why.