Optical/IP Networks

RadioFrame Exits Femtocell Biz

RadioFrame Networks Inc. is the first high-profile company to exit the femtocell hardware business, Unstrung has learned, although it will continue to make chips for the tiny home basestations.

This morning, Redmond, Wash.-based RadioFrame confirmed rumors that it had closed down its European office -- while stressing that it is still very active in the U.S. -- and said it was getting out of the customer equipment side of the femtocell business.

"While we closed down Europe specific to Femto cell, we are now focused on our iDEN and ASIC businesses," the company's CEO Jeff Brown said in an email reply to Unstrung.

"We are trying to be prudent with our money in these tough economic times and we have pared back to a core set of businesses that will take advantage of our unique market position while maximizing our use of funds."

RadioFrame's EMEA business was headquartered in Dublin. It is not yet clear how many people the closure may affect, and the company isn't commenting.

According to an industry source, RadioFrame has recently laid off employees, and European staff were mainly in business development and sales roles, but it is unclear just how many employees are involved.

Chatter about the company grew when it wasn't at the major European Mobile World Congress tradeshow in Barcelona last month, and it appears there are no plans for CTIA Wireless 2009 in Las Vegas either. On the company's Website in the "Upcoming Events" section, it says "Nothing scheduled at this time."

Back in August last year, RadioFrame -- founded by McCaw Cellular veteran Rob Mechaley -- raised $28 million in Series F equity and debt financing, which brought the company's total funding to $100 million since 2001. (See Femto Vendor Lands $28M.)

At the time of the last funding round, CEO Brown told Unstrung that the money would be used to further develop its femtocell products. Currently, the company's revenues come mainly from iDEN and GSM picocell sales. Nokia Networks resells RadioFrame's picocell products and is also a system integrator partner for femtocell products. (See RadioFrame Pumps Up iDEN, NSN, RadioFrame Team, Orange Uses RadioFrame Pico, and TeliaSonera Tackles Indoor Coverage .)

RadioFrame's femtocell product -- a 7.2 Mbit/s HSDPA standalone device dubbed the [email protected] -- is not yet commercially available and is not in any operator trials. See our report, Who Makes What: Femtocells, to see how RadioFrame compares to its femto rivals. (See Radioframe Intros OmniCell.)

— Dan Jones, Site Editor, and Michelle Donegan, European Editor, Unstrung

freetoair 12/5/2012 | 4:09:48 PM
re: RadioFrame Exits Femtocell Biz "RadioFrame Networks Inc. is the first high-profile company to exit the femtocell hardware business."

The problem is the lack of a business. So they did not really exit the business -- they have just acknowledged the lack of a viable business.
joset01 12/5/2012 | 4:09:47 PM
re: RadioFrame Exits Femtocell Biz A fair point, I wonder how many more will follow their lead over the next year?

El Rupester 12/5/2012 | 4:09:41 PM
re: RadioFrame Exits Femtocell Biz "Who will be next?"

Well, if freetoair is right and there is no femto market and never will be, then that would be sad.

But if you think there will be a market, what is interesting is actually how sparse the space is.

Looking at the "Who Makes What" list and compare it to other "sexy" markets.

In WiFi there was something likr $2bn VC invested in chip companies alone, and dozens of OEMs. Most of those went 'pop'.

In WiMAX, there were about 14 chip companies and over 100 OEMs.

In femtos there are three chip companies and a handsful of pure-play OEMs.

Perhaps that reflects that this market will not exist and VCs are wise.

Or perhaps it reflects that investment is very hard these days, and only the best companies get funded - and that when the market does succeed it will be shared between these fortunate few.
takayoshi3 12/5/2012 | 4:09:40 PM
re: RadioFrame Exits Femtocell Biz This is rather a series of mis-executions of this particular company rather than the general femto industry. They made some mistakes that lead to where they are today. Their financial problem has been more or less known by the insiders.

IMHO, this is just a process of natural selection in the market.
freetoair 12/5/2012 | 4:09:37 PM
re: RadioFrame Exits Femtocell Biz Sure radioframe has been a train on a track to nowhere forever.

But tell me about the "general femto industry"? What industry is that? How many units shipped / installed? How much revenue? What is the typical unit profit vs cost for a vendor?

If you cannot or do not have such data it is hard for me to consider it an "industry". But rather a "potential opportunity" which has floundered around and really gone - going nowhere.
El Rupester 12/5/2012 | 4:09:35 PM
re: RadioFrame Exits Femtocell Biz freetoair

I think you are being a bit harsh.

It is clearly true that femto is not yet a mature industry, but who said that it was?

The famous hype cycle: last year was a time of unrealistic claims from both vendors & journalists, and this year is starting backlash - with equally little relation to reality.

"Potential opportunity" is accurate, but "floundered around and really gone - going nowhere" seems premature.

The first few carriers have launched (Sprint, Verizon), and others say they will launch later this year (ATT, Tmobile, Softbank). No surprise, there are challenges and those first launches are tricky - but would you say that 3G was a failure based purely on DoCoMo in 2002? That would be silly: you have to see if the thyings suceed over a year or two of testing & maturity before judging.

Perhaps you are right, and perhaps those launches will fail, or perhaps it will be raging success -- but it is hard to say that now.
freetoair 12/5/2012 | 4:09:34 PM
re: RadioFrame Exits Femtocell Biz OK accept the feedback.
Lets see where it goes from here.
mobileinsider 12/5/2012 | 4:09:31 PM
re: RadioFrame Exits Femtocell Biz Gents:
Femto (home Node B) is indeed an emerging technology/product segment within our broader wireless/mobile industry. It is not a stand-alone solution whatsoever (we agree). I just posted a blog about Femto Hype and the recent news re: Radioframe. http://tinyurl.com/ctw83x


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