Is Ericsson Abandoning WiMax?
unstrung.com
MARCH 22, 2007
Networking giant Ericsson AB (Nasdaq: ERIC - message board) may be pulling the plug on its development of WiMax to concentrate on upgrading the 3G cellular technology it favors for broadband speeds.
The company appears to have stopped internal iMax development efforts at the end of last year and is instead relying on a reseller strategy for the technology. Mikael Persson, in strategy and business development at Ericsson, is scheduled to speak at the WiMax MEGNA conference next month in Dubai to explain why Ericsson decided in December last year to discontinue development of WiMax infrastructure in favor of high-speed packet access (HSPA) 3G technology, according to the conference brochure.
The brochure states that Persson will compare the performance of WiMax and HSPA and question the "commercial viability of WiMax given the ongoing success of HSPA."
Ericsson hasn't replied to calls and emails about a possible WiMax pullout. But news of a possible development freeze did not come as too much of a surprise to those in the industry who have followed Ericsson's lukewarm relationship with WiMax over the years.
"It depends on what degree you reckon they are in WiMax now," notes one industry source who said that the company had not done any serious internal work on WiMax for around two years.
He doesn't, however, expect Ericsson's internal affairs to affect its WiMax reseller agreement with Airspan Networks Inc. (Nasdaq: AIRN - message board). "They do have contract wins reselling Airspan," the source tells Unstrung. (See Ericsson Resells Airspan and Airspan Scores Ericsson OEM.)
Ericsson's worst nightmare is that big operators will decide to go for mobile WiMax instead of waiting for long-term evolution (LTE) to develop, which is the next technology upgrade. In fact, Vodafone Group plc (NYSE: VOD - message board) CEO Arun Sarin issued a barely disguised threat to this effect at the 3GSM conference in Barcelona in February. Sarin expressed frustration at the slow pace of mobile technology development, saying that if LTE progressed more quickly, there would be no need to deploy WiMax. (See 3GSM: Mobile's Fear Factor.)
But by relieving itself of any WiMax research and development, Ericsson will now focus on LTE for 4G. The vendor claimed to have the world's first LTE demonstration at the show. (See Ericsson Demos at 3GSM.)
Ericsson was skeptical of WiMax from the start and concerned that it might cannibalize its core WCDMA business. It was the last major vendor to join the WiMAX Forum , in December 2004. It is still listed as a principal member on the Forum's Website.
At that time, Ericsson positioned WiMax as a complement to DSL for wireline operators and was determined to keep the new wireless technology at arm's length from its core WCDMA mobile business. The vendor told Unstrung then that it did not see WiMax as a mobility solution. (See Ericsson Cool on WiMax, Ericsson Hovers on WiMax, and Ericsson Joins WiMax Forum.)
As of June last year, Ericsson was still not committing to mobile WiMax, unlike many of its peers, including Nokia Corp. (NYSE: NOK - message board), Nortel Networks Ltd. (NYSE/Toronto: NT - message board), Motorola Inc. (NYSE: MOT - message board), and Samsung Corp. . The vendor said its WiMax development would focus on "fixed-nomadic-portable" applications based on OFDMA in the 3.5GHz frequency band.
— Michelle Donegan, European Editor, Light Reading, and Dan Jones, Site Editor, Unstrung
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