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Keysight's (KEYS) 5G Test Solutions Gets Korea-based TTA Nod

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Keysight Technologies, Inc. (KEYS - Free Report) recently announced that its 5G device test solutions have been adopted by Korea-based Telecommunications Technology Association (TTA) to provide radio resource management (RRM) and 5G new radio (NR) radio frequency (RF) conformance validation services.

Keysight’s 5G conformance test platform offers cost-effective global certification forum (GCF) validated and RF protocol solutions, based on 3rd Generation Partnership Project’s (3GPP) 5G NR specification. These solutions help accelerate the designing, verification and launch of 5G devices. The toolset also provides a variety of test case solutions for different frequency band combinations.

In July, Keysight was also granted the 5G universal subscriber identity module (USIM) protocol conformance test case validation. The company’s 5G USIM protocol conformance test aids mobile device makers to verify if USIM in 5G devices abides by the 3GPP standards.

TTA is an IT standardisation association in Korea that regulates and implements ICT (information and communication technologies) standards in the country. TTA will leverage Keysight’s solutions to support the testing and certification services required for the effective deployment of 5G services.

The latest deal win is indicative of the strength in Keysight’s test and emulation solutions. Moreover, the company’s clout of offerings is growing amid the accelerated deployment of 5G and is expected to bolster revenues in the quarters ahead.

Robust Uptake of 5G Solutions to Fuel Growth

Higher infrastructure investments in the deployment of 5G mobile networks owing to the growing need for high-speed data, increased implementation of automation technologies and the rising adoption of Internet of Things (IoT) devices, holds promise.

This has led to a spurt in demand for Keysight’s 5G testing solutions. Keysight’s conformance and carrier acceptance test solutions have been implemented by SGS to fulfill the 5G NR certification criteria set by 3GPP and mobile operators in the United States and the Asia-Pacific region.

Further, its 5G test platforms were selected by Arcadyan to validate consumer premises equipment (CPE) for fixed wireless access applications (FWA).
In addition, Taiwan-based Gemtek chose Keysight’s 5G and 4G LTE test platforms to validate the data rate performance of mobile devices and consumer premises equipment (CPE).

Keysight is also witnessing higher adoption of the LoadCore offering, a 5G core network testing solution, which simulates complicated real-world subscriber models.

Additionally, in a bid to capitalize on momentum in 5G, the company  introduced a new test solution in a bid to aid 5G device vendors enhance the performance of 5G devices, in July. The new offering is based on MIMO and massive MIMO technology, and is aimed at enabling customers to increase data throughput and enhance network capacity.

Also, Keysight has acquired the software test automation platform Eggplant from The Carlyle Group, to boost its 5G testing solutions capability. Eggplant employs artificial intelligence and analytics for automating test creation and execution.

These initiatives augur well for Keysight and are expected to strengthen its competence in 5G test solutions market over the long haul.
Moreover, work-from-home and stay-at-home trends due to the coronavirus outbreak are driving demand for high-speed connectivity.

Per Allied Market Research data, the global 5G technology market is anticipated to see a CAGR of 122.3% between 2021 to 2026. Evidently, the company’s 5G test solutions are likely to witness an improved rate of uptake in the upcoming days.

Risks Remain

In spite of the growth momentum of Keysight’s solutions, supply-chain disruptions and market uncertainties stemming from the coronavirus outbreak are anticipated to be persistent overhangs on the company’s performance, at least in the near term.

Notably, in second-quarter fiscal 2020, Keysight’s commercial communications (CC) revenues declined 15% year over year to $468 million.

Also, lower international spending due to the ongoing crisis induced macroeconomic weakness, is likely to hurt the company’s prospects in the aerospace, defense & government (ADG) end-markets.

Zacks Rank & Key Picks

Keysight currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader sector are Apple (AAPL - Free Report) , Blackbaud (BLKB - Free Report) and Analog Devices (ADI - Free Report) . While Apple and Blackbaud flaunt a Zacks Rank #1 (Strong Buy), Analog Devices carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rate for Apple, Blackbaud and Analog Devices is currently pegged at 10.7%, 7.6% and 13.3%, respectively.

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