Corporate Backgrounder

Overview

Airgain is a leading provider of advanced wireless connectivity solutions and technologies used to enable high-performance wireless networking across a broad range of devices and markets, including consumer, enterprise, and automotive. Our mission is to connect the world through advanced antenna systems and integrated wireless solutions. Combining design-led thinking with testing and development, our technologies are deployed in carrier, fleet, enterprise, residential, private, government, and public safety wireless networks and systems, including set-top boxes, access points, routers, modems, gateways, media adapters, portables, digital televisions, sensors, fleet, and asset tracking devices. Through our pedigree in the design, integration, and testing of high performance embedded antenna technology, we have become a leading provider to the residential wireless local area networking, also known as WLAN, market, supplying to leading carriers, original equipment manufacturers, or OEMs, original design manufacturers, or ODMs, and chipset manufacturers who depend on us to achieve their wireless performance goals.

We built the foundation of our business through the evolution of the IEEE 802.11 protocol standards, and our roots are steeped in Wi-Fi antennas. Over the years, we have diversified our wireless connectivity solutions into cellular communications, starting with 3G technology, leading to LTE, and more recently, 5G. As the number of wireless standards has increased, we have adapted to develop the necessary solutions to meet end-customer needs.

Our core business historically was primarily sales of embedded antenna solutions for the top North American video service providers, largely in the consumer market. As technology advanced from 3G and pre-802.11ac protocol, antennas were often overlooked in terms of importance despite being a necessary component. More recently, the number of antennas per device has increased, the number of frequency bands to be supported per device has increased, device form factors have become smaller, product refresh cycles have shortened, and RF performance requirements have become more stringent. This evolution has made the antennas the limiting factor in the performance of many of today’s devices. As we head into Wi-Fi6 which addresses more dense areas, and 6E which adds additional spectrum for Wi-Fi, and 5G, both sub-6GHz and mmWave, we believe the market is moving straight into Airgain’s core competency and creating new opportunities for growth, particularly in our enterprise and automotive markets, where we have been targeting research and development investment in recent years. We are leveraging our experience in embedded antenna solutions and the evolving technology landscape to transition from a passive antenna and related services provider to a wireless system solutions provider.

Our embedded antenna solutions and related design and test services, which have historically been our core business, is predominant to our consumer market, but also is a significant component of our enterprise market, and to a lesser extent, automotive markets. In delivering embedded antenna solutions our design teams partner with customers from the early stages of antenna prototyping to device throughput testing to facilitate optimal performance and quick time to market. Our capabilities include design, custom engineering support, integration, and over-the-air, or OTA, testing. These capabilities have resulted in a strong reputation across the OEM, ODM, and chipset manufacturer ecosystem. Our competencies and strengths have helped us secure design wins used in multiple reference designs from leading Wi-Fi chipset vendors. OEMs, ODMs, chipset manufacturers, and service providers rely on these reference designs and our engineering skills to deliver superior throughput performance. We view our relationships with OEM, ODM, chipset and component manufacturers, and service providers and carriers as an important attribute to our long-term strategy and success. As a wireless connectivity solution provider that has a history in antenna technology, antennas are a part of everything we do, embedded or otherwise.

We have over 1,000 antenna products in our portfolio which shipped worldwide and are implemented across millions of devices. During 2020 we supplied our products to carriers, retailers, OEMs, ODMs, and end-users in three primary geographic regions: North America, Europe, and Asia Pacific. Our customer base includes Aruba, Cisco, AT&T (DIRECTV U.S., LLC), Belkin International, Inc., Broadcom, Charter Communications, Inc., Comcast Corporation, Commscope, Inc., Dish Network, Liberty Global plc., Nokia, Telefonica SA, Sagemcom SAS, Samsung, Technicolor SA, and ZTE Corporation, among others. We have achieved significant growth in our business, and from 2012 to 2020 our annual sales have grown from $18.2 million to as high as $60.6 million in 2018.

Our embedded and external antenna solutions support a variety of wireless access technologies across the licensed and unlicensed spectrum of frequency bands. These include IEEE 802.11 a/b/g/n, 802.11ac and ax (now called Wi-Fi6), 3G, LTE, 5G, low power wide area (or LPWA), as well as wireless internet of things, or IoT, standards such as Bluetooth, ZigBee, and Z-Wave, among others. In addition, we have expertise in the testing and benchmarking of passive and active wireless systems and devices including Wi-Fi6 and 5G cellular. To satisfy the rapidly evolving technology needs of the industry, we have remained on the leading edge of next-generation development by aligning ourselves with the evolution of wireless standards and working with wireless chipset vendors and our OEM partners on proof-of-concept and reference designs from very early in the new product development cycle, ensuring our solutions are ready in advance or in time for customer product implementations of new technology.

Industry Background and Market Opportunity

Global adoption of Wi-Fi has been a major contributor to our growth history to date. An increasing amount of people rely on Wi-Fi as the primary means to connect to the internet. Wi-Fi has become critical and vital to every public venue (retail shopping centers, airports, sports venues, the hospitality space, among others), and has become the key method for in-home consumer connectivity. As we transition to a more comprehensive wireless systems solution provider and continue to drive increased growth in the enterprise and automotive markets, mobile network (cellular) connectivity, and 5G in particular, is becoming an increasingly significant portion of our business, underpinned by the growth in cellular connectivity and data consumption demands globally. While historically Wi-Fi adoption was the primary contributor to our market potential, as we transition into a wireless systems solution provider we will consider mobile network-connected device trends as an equal, if not more important indicator of our company’s market opportunity. We believe the greater proportion of traffic being transmitted and received over wireless technologies, and the transition to new and more capable wireless technology standards, are direct indicators of future opportunities for our antenna and wireless connectivity solutions and services.

During the COVID-19 pandemic, Wi-Fi connectivity has grown in importance as consumers use it for connecting to videoconferencing, telehealth, and other critical applications and services. Wi-Fi has long been leveraged as one of the main solutions to meet the increasing demand for bandwidth, which enables operators to scale capacity to meet their subscribers’ needs. With advances and ratifications in Wi-Fi standards, dense environments with many concurrently connecting devices and IoT connections such as airports, public transportation, retail, healthcare, smart cities, stadiums, among others, result in public WI-Fi use cases across multiple industry segments. According to the Cisco Annual Internet Report (2018-2023), Wi-Fi4 and 5Wi-Fi(IEEE 802.11ac) standards will represent 66.8% of all WLAN endpoints by 2023 providing a range of speeds that allow users to view medium-resolution video streaming because of the higher throughput. Wi-Fi5, with very high theoretical speeds, is considered a true wired complement or equivalent and can enable higher definition video streaming and services with use cases that require higher data rates. The latest Wi-Fi6 (802.11ax) standard further improves the average throughput per user by a theoretical factor of at least four times in dense user environments, which will allow for dense IoT deployments. By 2023, 27% of all WLAN endpoints will be equipped with Wi-Fi6 according to the Cisco report. Furthermore, Cisco predicts 55% of all networked devices will be wired or connected by Wi-Fi by 2023, while the remaining 45% of networked devices will be mobile network-connected (3G and below, 4G, 5G, or Low Power Wide Area (LPWA).

To help meet the increasing demand for Wi-Fi and other unlicensed services, the Federal Communications Commission, or FCC, has led the way making additional blocks of frequency spectrum such as 5.9GHz and 6-7GHz spectrum available. More spectrum and larger channel bandwidth provide the needed capacity to support even more devices, at even faster speeds. Opening up blocks of 6 GHz bandwidth for Wi-Fi is likely to support the growth of Wi-Fi in the next decade.

Mobile network devices are evolving from lower-generation network connectivity (3G) to higher-generation network connectivity (3.5G, 4G or LTE and now also 5G), combining device capabilities with faster, higher bandwidth and more intelligent networks will contribute to increased mobile and Wi-Fi traffic. According to the Cisco Annual Internet Report (2018-2023), over 70% of the global population will have mobile connectivity by 2023. The total number of global mobile subscribers will grow from 5.1 billion (66% of population) in 2018 to 5.7 billion (71% of population) by 2023. 5G devices and connections will be over 10% of global mobile devices and connections by 2023. By 2023 global mobile devices will grow from 8.8 billion in 2018 to 13.1 billion by 2023 – 1.4 billion of those will be 5G capable. The fastest-growing mobile device category is M2M followed by smartphones. The mobile M2M category is projected to grow at a 30% CAGR from 2018 to 2023. Smartphones will grow at a 7% CAGR within the same period. This transition from 3G and below to 4G and now 5G deployment is a global trend and by 2023, nearly 60% of the mobile devices and connections globally will have 4G+ capability. North America will have the highest share of its devices and connections on 4G+ connectivity – 62% by 2023. By 2023 North America will be the region with the highest share of connections on 5G at 17%.

The market for our wireless products and services is growing rapidly as the technology is adopted across a wide variety of markets, including the following key markets we target:

  • Consumer: The consumer market encompasses a large and growing market of consumers using wireless-enabled devices and our antennas are deployed in consumer access points, wireless gateways, Wi-Fi Mesh systems and extenders, smart TVs, smart home devices, and set-top boxes. In these applications, our antennas support an array of technologies including WLAN, Wi-Fi, LTE, 5G, and LPWAN. These devices facilitate a variety of consumer-oriented applications and services including high-speed wireless internet and wireless video streaming, home automation, smart appliances, home security systems, and smart TV entertainment systems. We estimate that the total addressable market for our antennas in the service provider segment of the consumer market will grow at a compound annual growth rate, or CAGR, of 6%, while the IoT segment will grow at a CAGR of 11% between 2021 and 2024, based on ABI research and our internal estimates of the average selling price, or ASP. Furthermore, according to ABI Research, the market for residential gateways, routers, and mesh devices shipped worldwide is expected to increase from 229 million device shipments in 2021 to 257 million in 2023. Within the consumer market, the connected home market has seen an explosion of automation services and broadband-connected devices, making the demand for increased bandwidth, high throughput, and reliable connectivity more critical than ever before. Between 2021 and 2024, residential Wi-Fi Mesh systems are anticipated to experience some of the highest growth rates within the consumer market, with a CAGR of 16% according to ABI Research.
  • Enterprise: The enterprise market is characterized by devices that provide reliable wireless access for high-density environments such as buildings, campuses, transportation terminals, and stadiums. These systems have become mission-critical as they require high performance and scalability and are required to support a wide range of applications across different network environments. Within this market, our antennas are deployed across a wide range of systems, devices, and applications that include access points and gateways, fixed wireless access infrastructure, small cells, and remote radio heads. In enterprise, which includes IIoT, we play a critical role in providing embedded and external connectivity solutions and NimbeLink’s products are well-positioned to increase our growth in this market. Our customers in this space include the leading enterprise Wi-Fi systems providers, whereby we often work under a joint development manufacturing (JDM) or ODM model, developing complete external antenna systems, including outdoor enclosure and mounting hardware, to meet demanding technical specifications, often resulting in higher ASP’s when compared to our more traditional embedded antenna business. We estimate that the total addressable market for our antennas in the enterprise market will grow at a CAGR of 13% from 2021 to 2024, based on ABI Research device shipment numbers and our internal estimates of ASP.
  • Automotive: In the automotive market, our antennas are deployed in a wide range of vehicles to support a variety of wireless connectivity solutions in the fleet and aftermarket segment and support a variety of technologies that include Wi-Fi, 3G, LTE, 5G, and satellite connectivity. The fleet and aftermarket segment of the automotive market consists of applications whereby rugged vehicular wireless routers are paired with external antenna systems to provide connectivity to fixed and mobile assets and includes first responder and public safety vehicle fleets, the targets for our AirgainConnect AC-HPUE antenna-modem. Within the fleet and aftermarket market segment, there has been a rise in the number of antennas per vehicle. This is largely driven by the increasing need for connectivity across different access technologies that include Wi-Fi, 3G, LTE, 5G, and satellite. We estimate the total addressable market for our antennas (excludes antenna-modems) in the automotive fleet antenna market in North America, will grow at a CAGR of 11% from 2021 and 2024, based on ABI Research device shipment numbers and our internal ASP estimates.

Benefits to our Customers

We have developed strong relationships with leading WLAN chipset vendors, OEMs, and key service providers, keeping us at the forefront of new developments in wireless technologies and industry requirements. We share our expertise with customers in several areas including design, engineering, and testing, and provide insights based on years of experience across hundreds of devices. By harnessing our specialized experience and expertise, we offer solutions that can improve our customers’ product performance, reduce their staff costs and allow our customers to focus on non-antenna-related factors in the face of short design, engineering, and production windows. Rather than rely upon a captive engineering group that only works on in-house opportunities, we act as an outsourced antenna design, engineering, and test group for our customers.

We also bring years of experience in delivering high-performance, ultra-reliable wireless connectivity for mobile, fleet, and industrial IoT and machine-to-machine, or M2M, applications. Designed for all environments, our broad range of multi-band products support a variety of applications from kiosk and ATM connectivity to government and public safety fleet applications.

JulesCorporate Backgrounder