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Moto Jumps to Mobile

Light Reading
LR Mobile News Analysis
Light Reading
7/26/2005

Motorola Inc. (NYSE: MOT) is to leapfrog development of its own fixed-wireless WiMax equipment and will instead jump straight into the mobile 802.16e market, continuing the growing trend of cellular infrastructure vendors to hold out for mobile WiMax services. (See Moto Touts Mobile WiMax Plans.)

The company today unveiled its future WiMax product portfolio, dubbed “MOTOWi4” and touted for availability in the first quarter next year. [Ed. note: What is it with WiMax and these ridiculous names?]

The move will see Motorola migrate its Canopy wireless broadband division to support the 802.16e specification from the Institute of Electrical and Electronics Engineers Inc. (IEEE), which is expected to be ratified by September this year and officially named 802.16-2005.

“We will only be delivering 802.16e as a standard,” says Andy McKinnon, WiMax principal for the company’s EMEA networks division. McKinnon claims that mobile WiMax services will be “far more efficient in terms of throughput” than the initial fixed-wireless 802.16d standard, and cites recent planned trial announcements with Sprint Corp. (NYSE: FON) as evidence of Moto's market know-how (see Sprint Picks Moto for WiMax).

The main performance difference between the fixed and mobile WiMax specifications is that 802.16e is -- eventually -- supposed to deliver broadband services at "vehicular speeds", meaning that you may even be able to download email while driving [ed. note: woohooo!]. The general move in the industry towards mobile WiMax could also help to delay rollout of the technology as a whole, because fixed Wimax products are being tested now and are expected to be on the market early in 2006, whereas the equivalent mobile products probably won't make it onto the market until 2007 (see WiMax: A Spec Divided).

Motorola’s viewpoint is in keeping with the majority of its rivals, who have either chosen to opt out of development of fixed-wireless WiMax kit or are simply reselling equipment from traditional fixed-ireless players.

Of the big name mobile players, Alcatel (NYSE: ALA; Paris: CGEP:PA) and Lucent Technologies Inc. (NYSE: LU) have leaned on Alvarion Ltd. (Nasdaq: ALVR) for the supply of 802.16d kit; while Ericsson AB (Nasdaq: ERICY) has agreed to a resale partnership with Airspan Networks Inc. (Nasdaq: AIRN). (See Alvarion & Alcatel Get Fixed Up, Lucent to Resell Alvarion, and Ericsson Resells Airspan.)

LG Electronics Inc. (London: LGLD; Korea: 6657.KS), Nokia Corp. (NYSE: NOK), Nortel Networks Ltd. (NYSE/Toronto: NT), and Samsung Corp. have not announced any plans for the fixed-wireless WiMax market. Only Siemens AG (NYSE: SI; Frankfurt: SIE) and ZTE Corp. (Shenzhen: 000063; Hong Kong: 0763) have developed their own inhouse kit (see Siemens Soars on WiMax and ZTE: Future WiMax Hero?).

Meanwhile, nearly all these names have been linked to the future development of inhouse mobile WiMax equipment alongside Motorola’s efforts. Alcatel and Nokia have announced silicon partnerships with Intel Corp. (Nasdaq: INTC), and Siemens claims that its fixed wireless kit will be ready for an 802.16e upgrade (see Alcatel, Intel in WiMax Lovefest and Nokia Commits to Mobile WiMax). LG and Samsung are heavy proponents of 802.16e via their WiBro initiative in Korea, and Nortel is said by sources to be developing an 802.16e platform inhouse.

Analysts are unsurprised by such a trend. “Although the introduction of WiMax systems is expected to spur the market for fixed wireless broadband, that market is nowhere near as alluring, nor as threatening, for the world’s major mobile network infrastructure suppliers as mobile WiMax,” writes Gabriel Brown in a recent Unstrung Insider report.

“It’s notable that mobile infrastructure players have scaled down, shut down, or sold off their fixed wireless access divisions over the past five years; generally speaking, we believe they have formed partnerships because they don’t see a great opportunity to make money on fixed WiMax.”

— Justin Springham, Senior Editor, Europe, Unstrung

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