Ubiquiti Counterfeiting Crisis Deepens

Author: John Honovich, Published on Aug 14, 2012

It started off with a bizarre seemingly staged 'mob hit', got worse a few months later and now has become a major crisis. One of the most powerful companies in wireless networking and a growing force in the surveillance market, Ubiquiti, has been rocked again, with its stock dropping more than 40% in a single day and now down a total of ~75% since the 'mob hit' accusations in May. In this note, we examine the key drivers, geographical regions and product lines impacted.

Sales Hurt

*** ***** ** **** **** ****** ****** ********** ***************** ************* ******** *** ************* ******* ******* *****. ***** ****** was ** **% **** **** ****, ****'* * ***** ******* from ***** ********** **** ***% ****** ****. **** ***********, ******** projected **** *** ****** ** ************* ***** *** *** ****** of *** ******* ** ** *********** **** ** **** "****** [their] ******** ******* *** *** **** *** ****** ********." ******, for *** **** ******* ****** */**/****, ******** ** **** ********** "revenues ** $** ******* ** $** *******", *** ***** *** company's ******* * **** ***, * ******** ****.

AirMax *** **** *******

******, ********'* **** ******* ****, ** *** *** ***** *************. One ** ***** ****** *****, ****** ****** *** **** **% of ********'* ***** ******* (~$** ******* *** *** **** ****** quarter).

*** ************** ******* *******, **** ******** ******* ************* **** **** revenue ** *********** ******** ******** ***** ** ** *** **** of ******** ** ******* **** ****. *** * ***** ** comparison, **** *** *********** ***** *** ******* ***** ** ******** and *********'* ***** ****** ******* ********. ** **** ****, ** is ****** ******** ** ********* ***** **** ** ************* - indicating *** ***** *** ************ ********.

*** ******* ******* ** ***** ******* *** **** ****** ****** everywhere ****** ***** *******, **** ********. **** **** ****, "***** American ******** ********* **% ************" *** ** ************** ******* *** expect *******, ********* ****** ***** **** **** ********** *** *****.

Ubiquiti's ***************

********'* ******* ******** ***************:

  • *** ***** *** "****** ****-*********** ******** ** [*****] ********."
  • **** *** ******** ******* ********** *** ******** ******* ******* *** ringleaders.
  • ********** *$*** ******* ***** ********** ********* *********** ********** ** *** *******'* ******. **** ** ****** sizeable ***** *** *******'* ****** ************** ** *** ***** $*** million.

The ****** ******* ************

******* ***** ***** ** ** ********** ***** ******* ******** *** some ** ***** *********** ************. *** ********, ** ******* **********, ********'* *** ********:

"** ***** ********* *** [**** **] ******* *** *** **** relationships *** ******* *** ***** ******* ******** **** *** *** lack ** ****** **** ************, *** ** *** *** ********* know ********, *** ** **** **** ****** ** *** *********** team. ** **** **** ******** ************ *** ***** ** ********* demand ** *** ****** *** ******** *******.... **’** ** ********* and ** ******** **** *** **** *** *** ***** **** to *** **** ** *** **** *** ******* *** **** money *** ** ****** ** ***** ********."

*************, ******* ******** ************* ******* ** *** **** ******, **** *** ******** ***********:

"[********'* ***] ******** *** ******** **** *** *** ******. ** came ** * ***** **** ** **** ******* **** *** (distys) **** ** * ***'* **** ***. * *** ******* you **** * ****** *****."

*** ****** *********** *********:

"** ******* **** ******* ******** ******* *********** **** ***** *** no ******* (*** ***** ***** ** *****/******** ***).... **** ******* all *** ***** *** ****** **** ********* ** ******."

*** ******* *** ************ *** ***** ************ *** *** *** simple ** ******* ********* ******* ** *** *******. *******, ** Ubiquiti ** ** ******* **** **** **** ****, ************ **** need ** ** ******** *****. *** **** **** **** ** millions ** ******* ** *********** ******** ******** *** ****** ********** the ***** ********* **** * *** ** ********* *** ** on ****, **** ****** *********.

Detecting ************

***** *** ************** ** *** ************, ** ** *** ****** that *** *** ****** **** ** ****** ******* ** *** units (** *** ***** **** * **** ******* ** ********). Ubiquiti ********** **** ********* ******** ******* ********** ******** (********** ****) *** ***** **** **** *** ********* ** ********.

What's ****?

** *** *** * ******* ****** ****, ** **** ******* that **** *** *** ******* ** *** ***********. ******** ********** said **** **** ******* **** *** ********* ******* ***** **** counterfeits ********* ****.

****** ****** **** **** **** ** * **** ******* ***** that ** *********** *** ****** ** * ******* **** *** a *** **** ******* ***** ***** * *** ****** ***. And ** *** ***** ** **** ** *** ******* **** for********'* *** ** *** ** *** ****, ** *** **** ***** ********** *** ****** ** *** a ********* **** ** ********.

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