Amy, RE: Handset margins are low. The real money is in infrastructure - the stuff Cisco is great at. Additionally, lots of goodies this area could have for the future. That group is excited. Who cares what the terminal nodes are?
You're right. That is why Cisco allows Nextel in their game, because they DON'T care what the terminal nodes are. That's Nextel's choice.
I don't have the impression Cisco wants to waste its resources battling Intel. Why else is Flarion, a valid solution, stalled?
Because battling Intel is not a decision to be taken lightly.
The technology works, Nextel wants to move, Cisco wants to ponder. But Cisco knows that Intel is looking for revenue points outside of microprocessors, and WiMax is getting an inordinate amount of attention.
While there's room for both Intel and Cisco in a WiMax world, there isn't room for high margins for both of them. If Intel takes the margins and Cisco just sells routers, Cisco is in a vulnerable position.
I think it is possible that if Cisco sees that world evolve, they might just take the position that they're better off pushing Flarion and making sure they're the one making the rules, not Intel. As you say, right now companies yield to Cisco. Cisco does not want to give that up if they don't have to. |
