McAfee Leads in USB Devices - Analyst Blog

Internet security company

(

) has announced that it is now the dominant original equipment manufacturer (OEM) for universal serial bus (USB) devices, with two-thirds of manufacturers across the world opting for its security solutions.

The company’s current USB partners include Kingston Digital Inc, iShares S&P Global Materials (MXI), Rocky Mountain Ram,

(

), SPYRUS, Hagiwara and Yoggie Security Systems.

The demand for secured USB devices is growing by the day among both individual and enterprise customers, especially within highly regulated industries, where data security is a major concern.

With USB media storage devices growing in popularity, there is a growing concern that these devices could pick up malware from the PC host that the device is attached to. However, the McAfee protected USB device runs an automatic scan upon insertion that identifies malware on the PC host, thus preventing the corruption of the USB storage device.

McAfee’s OEM Alliance program also covers other areas, such as end points, servers, data and the network where enhanced protection is required. The company’s solutions have so far been deployed across the retail, healthcare, energy, financial services and transportation industries, to name a few.

Moreover, in June, McAfee launched its new Software-as-a-Service (SaaS) Web Protection solution, which is powered by McAfee’s Global Threat Intelligence network to ensure proactive delivery of reliable security services. The new cloud-based security solution enables rapid deployment from anywhere across the world and ensures cost reduction benefits.

McAfee’s innovative solutions enabled the company to report impressive first quarter results, with total revenue increasing 12.0% compared to the year-ago quarter. The increase in revenue is attributable to growth across all business segments. However, earnings per share of 41 cents remained below the Zacks Consensus Estimate of 50 cents per share.  McAfee provided encouraging guidance for the second quarter.

A strong product portfolio, growth prospects in all its served markets, acquisitions, customer win momentum and good cash generation ability are positives for McAfee. However, we are slightly concerned about the intense competition that the company faces from players like

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),

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) and

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), as well as hardware and software manufacturers entering the IT security business.

We have a short-term Hold rating implying a Zacks #3 Rank on McAfee shares.