Ubiquisys Femtos Go Soft

Femtocell pioneer Ubiquisys Ltd. unveiled a new strategy to focus on licensing femtocell software, marking a shift not only for the company but also for the fledgling femtocell industry. (See Ubiquisys Does Software Femto.)

The new strategy will see the Swindon, U.K.-based femto firm hone its focus on providing software for femtocells to original equipment manufacturers (OEMs) rather than on delivering the access point hardware and design -- a change in strategy that Unstrung first reported was in the works in July. (See Ubiquisys Rumor.)

However, the decision to morph to a more software-focused model is not motivated by a need to scale back costs, insists Ubiquisys CEO Chris Gilbert.

"This has nothing to do with cost reduction at all at the company," says Gilbert. "What we're trying to do as a pure-play femto company... [is] to make [the femtocell] as mass market as we possibly can."

In fact, Gilbert reckons that Ubiquisys -- which counts Google (Nasdaq: GOOG) and T-Mobile International AG as investors -- has all the funding it needs and will not require more after raising $11 million in August this year. But he did not commit to a timeframe for the company to reach profitability. "The feeling is that we'll not need more money," he says. "We've booked most of our revenues for next year already." (See Ubiquisys Flush With Femto Funds, T-Mobile Invests in Femto Firm, UbiquiSys Gets Google Boost, and Google Invests in 3G Startup, and Femtocell Startup Pockets $25M.)

Most of Ubiquisys's revenue already comes from the software licensed with its ZoneGate femtocell, which is manufactured by Sony Corp. (NYSE: SNE) and commercially deployed by SFR in France and SoftBank Mobile Corp. in Japan. Now, the vendor is aiming to license its software to a wider customer base. (See France Fires Up Femtocells and NEC, Ubiquisys Win Softbank Femto Deal.)

With the company's new software licensing model the idea is that the femto technology will be available at a lower costs to OEMs of all sorts of devices -- DSL residential gateways, WiFi modems, or cable modems, just to name a few. The hope is that the mass production capabilities of these manufacturers will help to increase the unit volumes and lower the unit prices of femtocells, and then the nascent industry would grow to mass market size.

The market could use a little shove: Operator femtocell deployments have gone much more slowly than expected this year. ABI Research recently cut its estimate for femto shipments from 790,000 by the end of this year to 350,000. (See Femto Forecast Cut.)

Ubiquisys calls its femtocell software the "Femto-Engine," which is spiced up with self-organizing network (SON) and interference management capabilities. The company also has a hardware program called "Engine-Ready" for manufacturers to design and make the femtocells.

The first product based on the Femto-Engine is the G3-Mini, manufactured by Taiwan-based SerComm Corp. and based on a chipset from Percello Ltd. . The device supports up to eight simultaneous callers and data speeds up to 14.4Mbit/s. (See Ubiquisys, SerComm Team Up, SerComm Gets Certified, and Ubiquisys Picks Chips for Next-Gen Femto.)

Ubiquisys will continue to sell the ZoneGate femto product, which is based on Picochip 's chipset, as well.

— Michelle Donegan, European Editor, Unstrung

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