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March 13, 2006
Wimax is hot –Wimax is not
Venture capital firms that have invested in Wimax chip companies might be getting nervous these days if they were hoping for an exit this year as some potential acquirers say they're not buying.
On the one hand market research firms, such as RNCOS from India, are bullish:
"WiMAX and other emerging high-speed wireless technologies will capture more than 42% of the wireless broadband business over the next few years, whilst 3G will have to content with less than 59% of the market in 2009."
And there is some market pull, with several operators in Europe tapping Wimax, while in the US Clearwire is deploying an “early version of Wimax”. Clearwire has raised some $1.1B in the past year for network investment, according to press reports.
But on the other hand, potential acquirers, such as Broadcom and Agere, are not showing much interest. Electronic News reporting from an industry conference last week provided some insight into the chip manufacturers’ attitudes:
“The markets for UWB and WiMAX are immature and our strategy is to engage in high volume markets … and the markets will be served by existing technologies. 802.11n -MIMO-enhanced WiFi - will be out before UWB, because it is compatible with 802.11 a, b and g.”
And Agere’s CEO was quoted as saying that WiMAX startups will never be able to gain the really lucrative customer wins.
“They’ll never have a tier one customer; they’ll never have a competitive cost-base, and they’ll never have a significant IP base.”
A lot of capital has been invested in Wimax silicon with exits still not visible.
Since Intel is the biggest proponent of Wimax, it is not surprising that its rivals are not jumping on the bandwagon. But we still wonder what the exit activity will be like for startups in the sector.
Some VC-backed Wimax and Wimax-related startups are listed here.
Sequans
Picochip (Recently brought in AT&T as a strategic investor in addition to VC)
Cambridge Broadband (Active in East Asian, its backhaul equipment supports Wimax, in addition to other wireless networking protocols)
Orthogon Systems (Sells Wimax compatible gear for backhaul application)
Alvarion (Products include Wimax gear targeted carriers, alternative telcos, mobile network operators, and private networks)
Read- Clearwire raises $360 million (Seattle Times)
Read- Wireless firms stand back as start-ups thrash it out
(Electronics Weekly)
Read- Wimax Forecast (RNCOS)
Posted on March 13, 2006 07:53 AM | Posted to Semiconductors | Venture Capital | Wireless | Permalink
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