Test & Measurement

Spirent Sticks With R&D Strategy

Spirent Communications plc may have had a sticky start to 2013, but the test systems specialist is sticking with its plans to ramp up investment in new technologies and products to meet the next wave of customer demand.

The company saw its first-quarter revenues dip by 18 percent year-on-year in the first quarter of 2013 to US$96.8 million, while its operating profit fell 70 percent to $7.6 million as customers (including network equipment and mobile handset manufacturers) cut their spending plans. (See Spirent Spiked by Q1 Spending.)

But despite that start to the year, the company still expects to generate full-year revenues at around the same level as 2012's $472.4 million and intends to increase its R&D spend by up to $14 million. (See Spirent Reports 2012 Profit of $111M.)

"Market conditions are likely to constrain growth prospects in the short term, however in order to underpin Spirent's longer term strategy and future growth we will continue to increase the level of investment in new product development," said CEO Bill Burns in a company update statement released early Wednesday.

That increased R&D spend is going to be channeled towards some key areas, including 4G (LTE FDD and LTE TDD), Wi-Fi, security, positioning (for satellite/location developments) and software-defined networking (SDN).

Reflecting those focus areas, the company recently announced a system designed to measure the performance of voice-over-LTE (VoLTE) and video chat over live networks and under lab conditions, and released open-source OpenFlow conformance suites with partner Indiana University to support SDN initiatives. (See Spirent Tests SDN/OpenFlow and Spirent Tests VoLTE.)

And both of those moves look timely. (See Verizon Preps Network, Waits on Marketing Nod for VoLTE and OpenDaylight SDN Group Breaks Cover.)

To reflect the increasing focus on wireless, Spirent has organized itself into three reporting segments instead of two: Networks and Applications; Wireless and Positioning (the new unit); and Service Assurance.

— Ray Le Maistre, Editor-in-Chief, Light Reading

Ray Le Maistre 5/1/2013 | 3:36:52 PM
re: Spirent Sticks With R&D Strategy This makes sense - it may hurt the margins in the short term but increasing R&D spend on the hot areas looks like a stategy that will pay off and likely relatively quickly. Bill Burns et al to be applauded, methinks.
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