So far this year, technology infrastructure IPOs have been fairly strong. Some examples include Data Domain and Aruba Networks. But as for last week's offering of Airvana
Airvana develops technologies to help carriers like Verizon
As for Airvana's financials, revenues surged from $2.3 million to $170.2 million over fiscal 2005 to 2006. Amazing, huh?
Not necessarily. Because of Airvana's OEM distribution model, a large chunk of revenue must be deferred until there are specified upgrades. This means extreme volatility. Keep in mind that first-quarter results in 2007 showed revenues of only $269,000.
Another issue is that Nortel
Airvana also faces grueling competition. Some rivals include Alcatel-Lucent, Hitachi, Huawei, and Samsung.
Airvana also plans to expand its technology for the fixed-mobile (FMC) market, which allows carriers to leverage their wireline broadband networks to deliver wireless services. But the market is in the early stages and already has competition from Cisco
Even though Airvana has spent nearly $200 million developing its products and is addressing a growth market, the company faces some major challenges. It's got Wall Street concerned, and Fools should be cautious as well.