LTE should benefit from WiMAX beachhead!

April 27, 2010

This is the concluding part of the Maravedis seminar on 4Ggear: Equipment market update and chipset trends, which I had the opportunity to participate late last month. Here is the perspective from Maravedis’ LTE and WiMAX Equipment Analysis Service – Q1 2010, presented by Adlane Fellah, Research Director – Maravedis and Robert Syputa, Senior Market Analyst, 4Ggear – Maravedis.

4G equipment executive summary 2009
One, mobile WiMAX chipset shipments surged. Further, there has been a shift in devices. The year 2009 has also down as the year of transition between WiMAX and LTE. In fact, WIMAX has established a beachhead, while LTE has been gaining in momentum. It is apparent that the LTE chipsets landscape is already crowded.

Maravedis also presented some BWA/WIMAX statistics for 2009 — 5.6 million chipsets, 4.8 million devices, and 3.5 million new subscribers (Source: 4Ggear Quarterly Report –March 2010).

When one looks at the WiMAX chipset breakdown by device during 2009, indoor fixed CPEs segment accounted for 49 percent, followed by USB dongle and PC cards at 42 percent. Embedded PC (netbook, notebook) contributed 4 percent, while outdor CPEs added up to 3 percent and indoor fixed CPEs accounted for 2 percent, respectively.

LTE/WiMAX trends
Now, let us look at some selected LTE and WiMAX key trends, as per the 4Ggear report.

Among WiMAX chipsets, the vendors have offered differentiated chipsets to address the emerged markets. The aggressive chipset prices have led to higher volume and optimized platforms. In case of LTE chipsets, as of now, the early solutions support LTE only. It may be pointed out here that the early suppliers may not be the long term winners.

Turning to devices, in the case of WiMAX devices, there have been diversified deployments of low cost CPEs, dual-mode USB dongles, and smartphones. In the case of LTE devices, the demonstrators have single-mode followed by dual-mode USB dongles.

As for the 4G equipment equipment itself, it is clear that WiMAX has already established a beachhead for technological progress. Definitely, LTE stands to and will benefit from all that.

WiMAX and LTE chipsets trends/landscape
Now, let’s have a look at the WiMAX chipset trends as well as the LTE chipsets landscape and challenges. First, WiMAX.

According to Maravedis, shipments of mobile WiMAX chipsets reached 5.2 million units in 2009. There was a surge in Q4-09 accelerating device shipments in H1-10. Notably, the top five chipset vendors had a combined market share in excess of 95 percent. On the technology front, 802.16e owns the lion’s share with a share in excess of 95 percent as well.

There has also been a shift to very integrated and lower cost WiMAX chipset. It started with the nerging of functions — WiMAX+WiFi, WiMAX+NPU, BB+RF, etc. Next, there was a migration to lower process geometry in order to save cost and power consumption, leading to 65nm boom. Thereafter, a pressure on price has led to fierce competition and market demand.

There is a distinct move toward LTE, leveraging OFDM technology and BWA ecosystem expertise. Mergers and acquisitions are expected in 2010, owing to scale and lack of funding, as well as perhaps, limited market share.

Now to the LTE chipsets landscape and challenges.

For starters, it has been a crowded LTE baseband market with as many as 12 players in the fray durung Q1-10. The incumbents are Qualcomm, Nokia, ST-Ericsson, and NEC/PMC/Fujitsu (and recently Icera). LG and Samsung are the new cellular entrants. The leading WiMAX players include Altair, Beceem, Comsys, Sequans and Wavesat, who have also entered this segment.

Obviously, all of these different actors have different strengths, different strategies. The incumbents are focusing on dual-mode and the cellular ecosystem. The new entrants are paying attention to their time-to-market and broader patents portfolio. On the other hand, the WiMAX vendors are looking at OFDM and TD-LTE leadership.

Key challenges for LTE
So, what are the key challenges ahead for LTE? Possibly, one, software complexity, with issues such as interoperability, hand-over, and global coverage. Two, as of now, the size of the niche markets unknown — whether TDD or LTE-only.

Lastly, there could be fierce competition ahead for the existing players with potential late entrants such as Broadcom, Infineon, Marvell, and MediaTek, and possibly Intel!

Makes for a compelling year ahead in global telecoms!

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