3G: Startups Need Grownups
But, according to the latest magnum opus from our research division, Heavy Reading, entitled "2004 Next-Generation Wireless Infrastructure Market Perception Study" [ed. note: we call it "Trixie" for short], at least some new entrants are making a splash in this up-and-down sector (see Network Market Faces Fall).
The study collates what 169 qualified (i.e, they work directly for a service provider, consultancy, integrator, or value-added reseller) respondents think of 34 vendors in 10 different sectors of the infrastructure market. The vendors were ranked on their performance in five catergories: Name recognition, price leadership, product performance leadership, leadership in product quality, and reliability and leadership in service and support.
Startups such as Airvana Inc., IPWireless Inc., and Starent Networks Corp. all made a respectable showing against the big names in this market such as Cisco Systems Inc. (Nasdaq: CSCO), LM Ericsson (Nasdaq: ERICY), Nokia Corp. (NYSE: NOK), and Nortel Networks Ltd. (NYSE/Toronto: NT).
For instance, Airvana won 23.7 percent name recognition, out of 97 respondents, for its CDMA2000 basestations.
In UMTS world, 48.7 percent of the 37 people that answered questions about 3G Node Bs (the radio boxes that connect cellphones to the rest of the network) said they knew of IP Wireless, and some of those surveyed felt that startup beat out established players like Alcatel SA (NYSE: ALA; Paris: CGEP:PA) on price/performance.
Over in the world of the wireless router, Starent was ranked tenth overall as a GGSN and PDSN provider. Wireless routers (a.k.a. GGSNs in GSM-derived networks, and PDSNs in CDMA systems) are packet core network devices that handle service creation, billing, and IP traffic management capabilities in the network. Perhaps surprisingly, Starent's name got more recognition in the GSM sector than its CDMA equivalent -- even though the firm has had a CDMA box for much longer than a GGSN.
Rankings aside, all these startups have one thing in common that may be helping them to get recognition in this notoriously conservative market -- they have partnerships with more established players.
Airvana is supplying next-generation CDMA equipment to both Ericsson and Nortel (see Airvana: The Quiet Startup). IPWireless has a hook-up with UTStarcom Inc. (Nasdaq: UTSI) (see UTStarcom, IPWireless Team). And Starent has a deal with Samsung Corp. (see Starent Teams With Samsung).
In fact, the report author's comments about Samsung/Starent love-in could easily be applied to the rest of the partnerships: "[The] visibility shows that [Starent's] nearly three-year-old partnership with Samsung isn't overshadowing its own brand," says Tim Kridel, "That bodes well for Starent, because the partnership has been a major reason for the company's success in key regions such as Asia, where wireless data usage is at levels that justify major investments in packet infrastructure."
Proving that (as so often in life) in the wireless infrastructure business, it's good to have a friend that's bigger than you.
— Big Dan Jones, Site Editor, Unstrung