ATHR Acquisition Gives Company Significant Lead In Home Hybrid Networks Market, Piper Jaffray Reports

Piper Jaffray said that it expects 2011 to be the year that Home Hybrid Networks start to gain significant traction.

“Adoption will be driven by a number of factors. First driver is WiFi pollution,” Piper Jaffray writes. “In densely populated areas, WiFi access points and other devices operating in the 2.4 GHz band are creating interference reducing networks' performance.”

The solution, Piper Jaffray said, is a hybrid network including a wireline option.

“The emerging P1901 standard is likely a second catalyst for the market,” Piper Jaffray continues. “In addition, a new standards committee (P1905.1) is working on interoperability with other Ethernet standards and easy of use.

“Finally, the increased number of IP addresses in a home and increasing bandwidth requirements will drive the need for more robust home networks.”

Piper Jaffray said that it believes that Atheros Communications, Inc.'s (NASDAQ: ATHR) acquisition of Intellon has given the company a significant lead in the hybrid home network market and could drive upside to its estimates in CY11 and beyond.

Atheros Communications closed Wednesday at $35.49.