The persistent rumors that Cisco is close to making a WiMAX infrastructure acquisition resurfaced at WiMAX World last month, with most of the independent WiMAX vendors in the frame.
Aperto, Airspan and Navini were all mentioned, though Alvarion and Redline were generally considered the frontrunners, since both already work quite closely with Cisco.
Although it would be a more difficult acquisition – Alvarion is publicly listed in Israel and has a substantial proprietary customer base to be supported – the company has been working increasingly tightly with Cisco.
As well as using the IP giant's ASN gateway, Alvarion has been talking up its ability to work with Cisco to be the primary suppliers of complex, multi-vendor systems. Alvarion is well placed, because of its heritage in broadband wireless, to take the prime integrator role among mid-tier operators and emerging markets where it has strong presence.
These markets, sometimes ignored by some of the tier one suppliers (though not Motorola), will be increasingly attractive to the likes of Cisco as it seeks to extend its channels, product bases and revenue streams. We would assume, with market capitalization currently around $800m and not quite profitable, that Alvarion would cost about $1bn, small change for Cisco.
However, a base station maker per se would seem of limited interest to Cisco, unless as part of a more general WiMAX initiative that would probably involve multiple acquisitions. Most of the thinking around the Alvarion rumors focused on Cisco trying to create a new revenue stream using readymade channels and products, and repeating the trick it pulled with the purchase of Airespace in enterprise Wi-Fi.
However, none of the WiMAX start-ups is in the early and dominant market position Airespace was in at the time of acquisition, and Cisco would be drawn into competition with carrier class giants in a sector that is far more complex, and more alien to its own strengths as a box shifter, than Wi-Fi switches.
A more diverse play for different WiMAX elements would make more sense, allowing Cisco to gain influence over the whole ecosystem and fill in profitable gaps, rather than going head-to-head with better established players in base stations.
One area where the giant is almost certain to take an interest will be in the metrozone market, where it is increasingly active with Wi-Fi (this could favor Aperto, because of that company’s focus on license-exempt WiMAX as well as licensed band).
The other obvious area will be the digital home sector, where Cisco aims to create an end-to-end offering of its own including set-top boxes, IPTV and, via Linksys, an expanded range of in-home equipment. This would make a WiMAX femtocell vendor a clear candidate for the company’s affections, as well as any technologies that would boost the Linksys inhouse developments, and/or a WiMAX ASN gateway specialist (such as WiChorus). Navini would be the strongest of the rumoured RAN acquisition targets in terms of giving Cisco a technology headstart, adding to its store of expertise in critical emerging platforms such as MIMO, beamforming and mobile IP.
Copyright © 2007, Wireless Watch
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