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Keysight's Connected Car Test Solutions Adopted by FAW Group

Keysight TechnologiesKEYS connected car test solutions have been implemented by China FAW Group Co, Ltd (or FAW).

The company’s suite of connected car test solutions aids automakers, like FAW, to test cases for performance and dependability of devices, applications and entire vehicle-to-vehicle (V2V) as well as in-vehicle communications network across cellular vehicle-to-everything (C-V2X), eCall, Ethernet, 4G, and 5G spectrums.

Keysight’s suite of connected car test solutions include solutions like Virtual Drive Test Toolset, which facilitate automakers to build virtual test routes in the lab by integrating network and channel emulation capabilities as well as combining data captured in the field.

Meanwhile, the automotive networking solutions enable validation of adherence to Ethernet protocols. The 4G/V2X solution helps to validate location-based services and 4G LTE connectivity.

The latest deal win from FAW, which is one of the leading automobile manufacturers based in China, is indicative of the strength in Keysight’s connected cars test and emulation solutions. Moreover, the company’s growing clout of offerings amid the increasing proliferation of connected cars, bodes well. This is expected to bolster revenues in the quarters ahead.

Rapid Proliferation of Connected Cars

Per a MarketsAndMarkets report, post COVID-19, the worldwide connected cars market will witness a CAGR of 25.2% from 2020 to 2025. Per the report, a steady increase in car production post coronavirus outbreak will contribute to growth for connected cars market. 

Moreover, the rapid deployment of 5G networks is expected to have a transformative effect on autonomous vehicles and connected cars. 5G will enable support to many connected and autonomous vehicle capabilities when integrated with network function virtualization (NFV) and software-defined networking (SDN).

In a bid to capitalize on momentum in autonomous driving, connected cars, and electric vehicles, Keysight has announced collaboration with IPG Automotive and Nordsys. The collaboration is aimed at co-development and acceleration in design of a new modular test platform to speed up the validation process of advanced driver-assistance systems (ADAS) and related functions for autonomous driving.

In July, Keysight expanded its Scienlab Charging Discovery System (CDS) portfolio with two latest certification and test solutions for charging interfaces within an electric vehicle (EV) or electric vehicle supply equipment (EVSE).
With strong growth prospects in the autonomous vehicles space, Keysight’s connected car test solutions are likely to witness higher rate of adoption in the coming days, which is expected to boost the top line. 

Near-Term Challenges

In spite of 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 in the near term.

Also, the auto industry has been rattled by the coronavirus pandemic. Sluggish demand for vehicles amid weak consumer confidence may hurt connected car growth prospects. This, in turn, might impact the adoption of Keysight’s connected cars test and emulation solutions.

Zacks Rank & Key Picks

Keysight currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the broader sector are Apple AAPL, Blackbaud BLKB and Analog Devices ADI. 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 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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