Tech Beat: Novatel, Sierra

Even in today’s world of ubiquitous mobile communications, it may be hard to comprehend the magnitude of the wireless industry. During the second quarter of 2007 alone, some 270.9 million mobile phones were sold around the world, according to recent data from Gartner Inc. Today, there are about 2.88 billion mobile subscribers worldwide.

Those phones are becoming more and more advanced. Consumers are increasingly purchasing phones based on third generation, or 3G technology, which, in addition to enabling voice communications, offers ways to swiftly send text, images, and video.

Today there are about 470 million 3G mobile subscribers in the world, representing only a small fraction of total mobile phone users. But the 3G user base is growing rapidly.

Apple Inc.’s (Nasdaq: AAPL) iPhone, which looks more like a tiny television than a telephone, illustrates the trend well. One reason the $600 phone, er $400 phone is so popular is because of its video and other rich-media capabilities.

Other mobile device makers and PC makers are moving in the same direction, adding more functions to their wireless products so that people can not just carry a conversation but accomplish some serious work – or play – remotely.

The trend is reflected in stock values. In the wireless sector there is one, and depending on what date you use to make the comparison, maybe two stocks that have doubled in the past year. Both companies, which make wireless cards and modems to enable 3G mobile communications, are rapidly growing their revenues and signing up new customers.

Sounds good for new investors, yes? Well, maybe not so much, at least as far as Novatel Wireless Inc. (Nasdaq: NVTL) and Sierra Wireless Inc. (Nasdaq: SWIR) are currently concerned.

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