April 2, 2010: istockAnalyst - iSuppli recently published a study contending that the next big thing in hi-tech is the femtocell. Two questions immediately come to mind: what the heck are femtocells and can an investor make money on them?

Background --

Femtocells are cellular base stations that improve indoor wireless coverage. Femtocell base stations improve 3G cellphone coverage inside buildings or homes — locations where wireless signals tend to be weak because of building materials blocking the signal or the site's distance from a cell tower. A femtocell acts somewhat like a WiFi hotspot or a wireless router, providing access to the cell carrier's network for multiple devices within a building. With some carrier networks straining to keep up with the demands of increasing numbers of users surfing the web from their smartphones, femtocells are being looked at as a way to improve service without having to build as many expensive cell towers or spend so much to increase bandwidth.

The growth story --

iSuppli has this to say with respect to growth: femtocells are "headed toward critical mass among all major nodes of the wireless supply chain and will vault into explosive growth after reaching a decisive watershed this year."

They expect shipments to triple this year. They then expect shipments in 2011 to be 289% higher than 2010 and so on. The chart below shows the sharp ramp in shipments.

read full article