WiMAX Promise of Quantum Leap in Broadband Wireless Communications
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1 WiMAX Promise of Quantum Leap in Broadband Wireless Communications Business Model Considerations George Wu Director of Marketing Technology Solutions and ASSP Fujitsu Microelectronics America, Inc. International Technology Association of America (ITAA) Luncheon Presentation June 29,
2 Quantum Leaping to 2010 With Ubiquity Comes Affordability Seamless Network-to-network Roaming Multi-band and Multi-mode Cellular Handsets will be the Norm Convergence and Co-existence of Various Technologies 3G, HSDPA, WiMAX, WiFi and more An Ultimate User Experience for the Average Consumer 2
3 Ubiquitously Connected Unleash WiMAX 3
4 Wireless Market at a Glance MAN (Fixed Wireless) Cellular GSM/CDMA (3G) HSDPA (3.5G) Satellite Global LAN x, LMDS/MMDS/WLL PAN Bluetooth, UWB, ZigBee x, HiperLAN Narrowband* Broadband** PAN LAN MAN 3G/3.5G Cellular Satellite Cordless Phones WLANs Residential Towers Multimedia (Voice, Global Cellular PCs Hotel Businesses Video, Data) Phones, GPS PDAs Retail SoHo Cellular Phones Military Home Gateways Conference Government Business Military *Max. bandwidth up to 128Kbps **Min. bandwidth of 200Kbps 4
5 Previous Attempts at Broadband Wireless U.S. Experience with Broadband Wireless The U.S. broadband wireless market has been around for at least a decade Technology Broadband wireless technology is not a brand-new phenomenon in North America; companies have made attempts in the past Early Market Adopters Innovative companies like Winstar and Teligent took advantage of the telecom boom in the late 90s and launched broadband wireless services, but faced limited acceptance Sprint launched fixed wireless MMDS services to the consumer market and ended up writing down over $1B of unrealized gains 5
6 Why Did the Previous Attempts Fail? Proprietary Mix of Fixed Wireless Technologies Limited Spectrum Availability Line-of-Sight Requirement Lack of Economies of Scale Poor Quality of Service Absence of Long-term Commitment from the Operators Lukewarm Acceptance by the Average Consumer All Leading to a Disappointing Market Adoption of the Early Broadband Wireless Technologies 6
7 The Vicious Economic Cycle Proprietary Broadband Wireless level (custom ASICs & FPGAs) Higher chip level Higher BOM level Higher system deployment level Lower equipment level Lower subscription number Insufficient Market Adoption Lack of Economies of Scale 7
8 (000 s) Broadband Market Size Global Subscribers 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, DSL Cable Wireless Revenue from the sub-11ghz fixed wireless market will increase from $430M in 2003 to $1.6B in WiMAX will represent 50% of the total projected revenue in Fixed WiMAX market will cross the $1B mark in 2007 (In- Stat/MDR). WiMAX will double the number of broadband wireless links by Source: Yankee Group 8
9 The New Broadband Wireless Era Affordable Spectrum More affordable spectrums are becoming available on a worldwide basis Standards-based Systems Global uptake on BWA products/solutions will continue, especially for standards-based systems since they make great economic sense Cost-effective Deployment The worldwide BWA market is an ever-moving target innovative companies will compete to churn out pre-standards and standards-based products and solutions, enabling operators and MSOs to achieve cost-effective deployments Triple Play The voice, data and video triple play via the broadband pipe is becoming a commercial reality as deployment continues to gain momentum 9
10 Legitimizing Broadband Wireless Now WiFi The world has responded to WiFi with a bang the rapid-fire adoption of WiFi everywhere and anywhere is a reality OFDM Innovative service providers and operators who seek to optimize the price/performance ratio for their service offerings are adopting proprietary broadband wireless technologies such as flash OFDM WiMAX Since 2003, the WiMAX Forum has been signing up more and more members from all walks of the IT/communications industry operators, system providers and component vendors are all joining the WiMAX cause 10
11 Meet WiMAX WiMAX, the last best hope of the public access wireless broadband industry Broadband Wireless Business Changes broadband from wireline to wireless In-Stat WiMAX the (next) great wireless hope Red Herring WiMAX promises breakthrough in broadband access InfoWorld 10 Technologies to Watch in 2004 BUSINESS 2.0 To Deliver on its Greatest Promise, WiMAX Deployment in 2005 is Essential 11
12 WiMAX Forum The Global Community Magnet Currently More than 250 Member Companies and More Are Joining 12
13 WiMAX Ecosystem The Success of WiMAX Starts at the Semiconductor Level Carriers WiMAX System Partners RFICs Semiconductor Providers Baseband ICs 13
14 WiMAX Fulfilling the Broadband Wireless Challenge Pre-Standard Proprietary, vertical solutions Volume silicon opportunity missing System vendors design their own ASICs Post-Standard Interoperability between equipment Abundant opportunity for volume silicon System vendors use standards-compliant SoCs Operators System Integrators Network Mgmt Software Providers System Design & Architecture Operators System Integrators Network Mgmt Software Providers Equipment Manufacturers Custom MAC Custom, or DOCSIS PHY Custom Radio Large revenue opportunities Large revenue opportunities Volume Integrated MAC/PHY Silicon Solutions Volume Radio Suppliers 14
15 What is WiMAX? A non-line-of-sight broadband wireless standard capable of transmitting massive bits of information over long distances A great bridging solution between the last mile and the WAN Backfilling areas where landline technologies have trouble, backhauling WiFi hotspots and cellular networks Completed a: Jan a/ e : Q Estimating Q3/Q Spectrum Channel Conditions Bit Rate Modulation Mobility Channel Bandwidths < 11GHz Non-line of sight Up to 75Mbps at 20MHz channelization OFDM 256, OFDMA BPSK, QPSK, 16QAM, 64QAM Fixed Selectable channel bandwidths between 1.75MHz and 20MHz < 6GHz Non-line of sight Up to 15Mbps at 5MHz channelization Same as Pedestrian mobility High-speed mobility Same as with subchannelization 15
16 Fixed WiMAX ( ) Market Landscape Target Market Underserved and rural areas where DSL & cable modem fall short Competition A handful of semiconductor companies competing for worldwide market share Deployments The first wave of product development and deployment by companies shipping proprietary OFDM-based systems Applications From WiFi hotspot backhauling to home gateway to test equipment, and more will surface in the future Deployment Schedule Plug fests in 2005, followed by trial-based network deployments in late 2005 and 2006; this trend should continue well into 2008 and beyond 16
17 Fixed WiMAX Business Model Supporting Frequency Bands Support both licensed and license-exempt frequency bands, offering enormous flexibility to the worldwide operator / service provider community Applications and Deployment Not hype, but a real gap filler in areas where there is no access not from fiber, cable modem or DSL Most likely to be introduced as a trial access option in a bundled service package along with WiFi and VoIP, or with DSL, giving end users the opportunity to test its performance under different conditions Should be viewed as a long-distance transport medium without wire in order to envision its potential applications Most existing broadband wireless gear makers will make incremental system upgrades to make their equipment fixed- WiMAX-ready to achieve fast TTM advantage 17
18 Mobile WiMAX (802.16e) Market Landscape Competing Technologies Tons of market buzz, making mobile WiMAX one of the key competing technologies for 3G, 3.5G and 4G in the worldwide cellular handset market Competition Many semiconductor companies will be competing for worldwide market shares Standard Status The e specification is still a work-in-progress Market Potential The revenue potential of mobile WiMAX has drawn many operators to becoming WiMAX Forum members, further validating the market potential of mobile WiMAX Mobile WiMAX Deployment Unlikely to happen before
19 Mobile WiMAX Business Model Supporting Frequency Bands May be only in the licensed frequency band for performance and regulatory reasons Applications and Deployment A completely different playing field compared to fixed WiMAX more complex, more trade-off considerations, requiring more global cooperation at all levels Partial mobility vs. full mobility Multi-mode and multi-band handheld gears will likely become the norm Notebooks/laptops vs. cellular handsets vs. Internet Access Devices (IADs) WiBRO merging with e (the success of WiBRO may or may not imply the same degree of success for e) 19
20 Interplay of the WiMAX Ecosystem Base Stations Subscriber Stations OEM (Original Equipment Manufacturers) OEM Engagement Baseband SoC Provider System Makers Component Vendors RFIC Provider Cost Optimization Subscriber Stations ODM (Original Design Manufacturers) Subscriber Stations Cost Optimization 20
21 WiMAX Competitive Strengths Bridge the information gap between developed and developing nations Offer carriers and their customers more options to choose from, depending on their business models and lifestyles Support both point-to-point and point-to-multipoint broadband wireless access Lower network investment costs compared to 3G, DSL or cable-modem-powered networks Operate in licensed (2.5GHz, 3.5GHz) and license-exempt (5.8GHz) radio spectrums, and other potentially lower frequency bands (700MHz 900MHz) 21
22 A Myriad of WiMAX Applications More Applications Underway Use Set-Top Box as - WiFi Router - PVR - Others Cellular Backhauling Remote Casino Gaming Distributed Video Gaming Public Safety - Fire Department - Hospital - Others Off-Site Seminars/Training Homeland Security TV Programs & PPV Broadcasting Remote Test Data Measurements Residential Gateway Emergency - e911 Long-Distance Interactive Advertising Remote Tax Filing WiFi Backhauling Campus-Campus Communications VoIP-based Video Conferencing 22
23 WiMAX Deployment Milestone Fujitsu s Perspective 2005 Fixed WiMAX system plug fests and network trials start 2006 Fixed WiMAX system plug fests and network trials continue Mobile WiMAX SoC introduced Fixed WiMAX network deployment continues Mobile WiMAX network deployment begins After 2008 Fixed WiMAX network deployment continues Mobile WiMAX network deployment progresses 23
24 Why WiMAX Will Succeed Standards-based broadband wireless technology More available spectrum Non-line-of-sight requirement Large economies of scale Robust quality of service Strong interest and project starts from global service providers and operators Long-term standards-compliant SoC commitments from major heavyweights All Leading to Mass-market Adoption by the Average Consumer 24
25 The Win-Win Economic Cycle WiMAX-enabled Broadband Wireless level (i.e. standards-based SoC) Lower chip level Lower BOM level Lower system deployment level Higher equipment level Higher subscription number Significant Market Adoption Achieving Economies of Scale 25
26 Let s Seize the Opportunity Make plenty of affordable spectrums a reality Encourage and facilitate ongoing government endorsements Empower and enlist academic involvement Make WiMAX-compliant SoCs available in 2005 Submit WiMAX-compliant systems to plug fest in 2005 Begin trial-based network deployment in
27 Ubiquitously Connected Unleash WiMAX 27
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