Alvarion Heads Downmarket

The news that Alvarion Technologies Ltd. (Nasdaq: ALVR) has formed a joint venture with a Taiwanese partner to build end-user devices brings the development of WiMax networks to a new phase, according to executives on both sides of the deal. (See Vendors Form WiMax JV.)

Tel Aviv-based Alvarion says it will partner with Accton Technology Corp. of Taipei to build "high volume customer premises equipments (CPEs) and other end-user devices" for mobile WiMax networks based on 802.16e-2005 from the IEEE. The paired entity will be called Accton Wireless Broadband, and the first product, due out in the second quarter of this year, will be a PC-MCIA card for connecting to WiMax networks. Other items to be debuted this year will include self-installable indoor and outdoor residential gateways.

The companies have not specified the ownership terms of the JV, but Accton is reportedly putting up the bulk of the $4 million to launch the new company.

The Asia play, says Alvarion vice president of marketing Carlton O'Neal, marks an important next step in the accelerating march of WiMax toward widespread deployments.

"It's really a harbinger of the future of WiMax from an end-user perspective," explains O'Neal. "We've announced this partnership, and it's the first one of its kind in the industry, but it won't be the last. Every company that's serious about being a systems company will eventually have to have some kind of operation in Asia."

The partnership with Accton gives Alvarion a direct path to marketing low-priced customer premises equipment directed at consumers and small businesses -- something Alvarion has not focused on to date. (See Alvarion's WiFi Stopgap.)

"As a company, it signals a shift from doing just higher-end CPE to mainstream-type gear that can really be produced in such a way that you can put it in almost any device and get it done cheaply," adds O'Neal. "That's a big deal for us -- we'll keep doing what we're doing at the higher end, but the really large volumes are going to be in this segment."

The market for WiMax infrastructure and proprietary CPE will climb to $3.7 billion in 2012 from $490 million last year, according to research firm Maravedis Inc. . The market has been boosted by Sprint Corp. (NYSE: S)'s plan to build a nationwide WiMax network that the carrier says will reach 100 million people by 2008.

— Richard Martin, Senior Editor, Unstrung

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