It comes as no surprise that WiMAX silicon vendors are seeking to leverage their technology expertise and market position in order to secure a place in the LTE chipset market.
Altair and Wavesat have already announced they will enter the LTE silicon market in the coming months, and a recent announcement from Sequans Communications indicated the same. While Beceem and GCT Semiconductor have not made public specific plans to introduce LTE chipsets, it is likely that LTE will factor into their roadmap in the near future.
Indeed, WiMAX has disappointed those who bet on its supremacy as the dominant 4G standard, and it is only natural for its supporters to look elsewhere for growth opportunities. WiMAX provided a fertile terrain for silicon companies to thrive alongside Intel, which had more to gain from overall WiMAX ecosystem growth than from a monopoly position in the WiMAX chipset market.
3G and LTE chipset marketplaces present a different situation. These markets are the bread and butter of mammoths such as Qualcomm, Texas Instruments, Broadcom and the like. Furthermore, LTE chipset buyers will be large companies that have historically worked with a handful of suppliers, and will be reluctant to allow smaller players into their exclusive circles. LTE is therefore a much tougher market for startup companies. Do WiMAX chipsets vendors stand a chance in this context? Are combo LTE-WiMAX chipsets the way to go? These are million dollar questions, and while I do not pretend to be able to give definitive answers, I would like to share some thoughts about these issues.
One could infer that companies that have been able to harness WiMAX technology and successfully bring to market silicon solutions empowering a range of devices could do the same with LTE. Much of the technology is common to both standards. Furthermore, companies that demonstrated the ability to manage the complexity of such developments, including performing the plethora of tests involved in the WiMAX certification process, fine tuning their solutions for field trials, and supporting a large portfolio of customers, have proven capable of bringing to market silicon solutions for LTE. WiMAX companies have covered much distance in the learning curve starting with OFDMA technology in the development phase, and the subsequent phases of interoperability testing, certification and field trials.
Integration is key
From a product perspective, WiMAX vendors' main weakness is their lack of familiarity with 2G and 3G standards. Backward compatibility of LTE solutions with legacy voice and data standards is likely to be a must-have. Integration with 2G and 3G will be a clear-cut requirement for all LTE chipsets, especially at the time of market launch when the scale of 3G deployments is supposed to offset the initially limited LTE footprint. In contrast to Qualcomm, Texas Instruments and other veteran 2G and 3G players, WiMAX companies could only implement third-class 2G and 3G IPs from small IP vendors, with no real field experience and no proven track record. Even if they introduce LTE chipsets with HSDPA or EV-DO compatibility, these are likely to underperform compared with the incumbents.
Regardless of their ability to deliver products compliant with market requirements, the LTE market structure presents serious challenges to new entrants and smaller players. This applies even to silicon market leaders that have gained valuable experience with WiMAX. Although LTE and WiMAX are pretty close from a technology perspective, such is not the case in terms of their respective markets: competitive environments, the buyer-supplier relationship between chipset and terminal vendors, and market segmentation are all quite dissimilar between the two standards...Continued
Next page