Small cells

Ubiquisys Rumor

4:50 PM -- Word on the femtocell grapevine is that U.K. pioneer Ubiquisys Ltd. is preparing for a significant strategy revamp.

According to an Unstrung source, the startup wants to morph into a software licensing company to be the "Microsoft of femtocells" and get out of the hardware side of its business. The company would focus on licensing its designs and software stack, rather than actually making the hardware itself. Ubiquisys currently uses the manufacturing facilities of the Sony UK Technology Center for its ZoneGate femtocell device. (See Ubiquisys Ramps Up Production.)

Ubiquisys marketing VP Keith Day told Unstrung: "We're not looking to make a massive and strategic shift right now… Plans or speculation to change our strategy are premature if not completely off the mark."

And in response to whether or not Ubiquisys was planning to stop manufacturing the standalone ZoneGate femtocell, he said, "Today, we're not planning to do that." [Ed. note: How about tomorrow?]

Unstrung has also learned that one of the company's founders, Len Schuch, is leaving the company at the end of this month. Schuch, who was also VP of business development, is not included on the list of executives on the company's Website.

Day would not comment on Schuch's departure.

But something is afoot at the femto pioneer: Day said the company would announce its "next phase of expansion in the market" in the next two weeks, but he would not disclose any details.

If Ubiquisys were indeed looking to focus its energies on software licensing, such a move would make sense. Femtocell volumes are not as high as many in the industry had hoped by now, and additional funding for a new company can't be easy to come by in the middle of a global recession.

But financial strains wouldn't necessarily be the motivation for this kind of a strategy change. Ubiquisys's strength is its technology, which is the femto radio know-how and the software (or "secret sauce" as some wags put it) that differentiates the little base stations, as opposed to the ability to compete with the world's high-volume consumer electronic device manufacturers. The startup had to make the devices to get the market going. Now, it has partners that can do that, such as Netgear Inc. (Nasdaq: NTGR) and SerComm Corp. (See Netgear Gateway Goes Femto and Ubiquisys, SerComm Team Up.)

Ubiquisys, which counts Google (Nasdaq: GOOG) and T-Mobile International AG as strategic investors, has commercial contracts with SoftBank Mobile Corp. and Orange France as well as a trial with TDC A/S (Copenhagen: TDC). (See Huawei, NEC Score Orange Femtocell Deal, NEC, Ubiquisys Win Softbank Femto Deal, T-Mobile Invests in Femto Firm, TDC Joins the Femto Club, and T-Mobile Invests in Femto Firm, and UbiquiSys Gets Google Boost.)

— Michelle Donegan, European Editor, Unstrung

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