WiMAX – Promise of Quantum Leap in Broadband Wireless ... · WiMAX – Promise of Quantum Leap in Broadband Wireless Communications Business Model Considerations George Wu Director

1International Technology Association of America (ITAA) Luncheon Presentation – June 29, 2005

WiMAX – Promise of Quantum Leapin Broadband Wireless Communications

Business Model Considerations

George WuDirector of MarketingTechnology Solutions and ASSPFujitsu Microelectronics America, Inc.

2Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005

Quantum Leaping to 2010With Ubiquity Comes AffordabilitySeamless Network-to-network RoamingMulti-band and Multi-mode Cellular Handsets will be the NormConvergence and Co-existence of Various Technologies • 3G, HSDPA, WiMAX, WiFi and more

An Ultimate User Experience for the Average Consumer


Ubiquitously Connected – Unleash WiMAX


Wireless Market at a GlanceSatellite

Bluetooth,UWB, ZigBee

802.11x,HiperLAN

802.16x,LMDS/MMDS/WLL

GSM/CDMA (3G)HSDPA (3.5G)

Global

PAN

LAN

MAN(Fixed Wireless)

Cellular

Narrowband*

Broadband**

PAN LAN MAN 3G/3.5G Cellular SatelliteCordless Phones WLANs Residential Towers Multimedia (Voice, Global CellularPCs Hotel Businesses Video, Data) Phones, GPSPDAs Retail SoHo Cellular Phones MilitaryHome Gateways Conference Government

Business Military *Max. bandwidth up to 128Kbps**Min. bandwidth of 200Kbps


Previous Attempts at Broadband WirelessU.S. Experience with Broadband Wireless• The U.S. broadband wireless market has been around for at

least a decadeTechnology• 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


Why Did the Previous Attempts Fail?

Proprietary Mix of Fixed Wireless TechnologiesLimited Spectrum AvailabilityLine-of-Sight RequirementLack of Economies of ScalePoor Quality of ServiceAbsence of Long-term Commitment from the OperatorsLukewarm Acceptance by the Average Consumer

All Leading to a Disappointing Market Adoption of the Early Broadband Wireless Technologies


The Vicious Economic Cycle

Proprietary Broadband Wireless Market

@Component level (custom ASICs & FPGAs) → Higher chip costs @Board level → Higher BOM cost@Equipment level → Higher system cost @Network deployment level → Lower equipment usage @End-user level → Lower subscription number

Insufficient Market Adoption → Lack of Economies of Scale


Broadband Market Size

Revenue from the sub-11GHz fixed wireless market will increase from $430M in 2003 to $1.6B in 2008. WiMAX will represent 50% of the total projected revenue in 2008.

Fixed WiMAX market will cross the $1B mark in 2007 (In-Stat/MDR).

WiMAX will double the number of broadband wireless links by 2009.

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

2003 2004 2005 2006 2007 2008DSL Cable Wireless

Global Subscribers(000’s)

Source: Yankee Group


The New Broadband Wireless EraAffordable Spectrum• More affordable spectrums are becoming available on a

worldwide basisStandards-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


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 realityOFDM• 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


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


WiMAX Forum –The Global Community Magnet

Currently More than 250 Member Companies and More Are Joining


WiMAX EcosystemThe Success of WiMAX Starts at the Semiconductor Level

SemiconductorProviders

Carriers System

Partners

WiMAX

RFICs Baseband ICs


WiMAX –Fulfilling the Broadband Wireless ChallengePre-Standard• Proprietary, vertical solutions • Interoperability bet• Volume silicon opportunity missing• System vendors design their own ASICs

Post-Standardween equipment

• Abundant opportunity for volume silicon • System vendors use standards-compliant SoCs

Operators

System Design & Architecture

Custom MAC

Custom Radio

Custom, 802.11 or DOCSIS PHY

Network MgmtSoftware Providers

System IntegratorsOperators

Equipment Manufacturers

Volume Integrated MAC/PHY Silicon Solutions

Volume Radio Suppliers

Network Mgmt Software Providers

System Integrators

Large revenueopportunities

Large revenueopportunities


What is WiMAX?A non-line-of-sight broadband wireless standard capable of transmitting massive bits of information over long distancesA great bridging solution between the last mile and the WANBackfilling areas where landline technologies have trouble, backhauling WiFi hotspots and cellular networks

802.16a/802.16-2004 802.16eCompleted 802.16a: Jan 2003

802.16-2004: Q3 2004Estimating Q3/Q4 2005

< 6GHzNon-line of sight

Up to 15Mbps at 5MHz channelization

Same as 802.16-2004

Pedestrian mobility High-speed mobility

Same as 802.16-2004 with sub-channelization

Spectrum < 11GHzChannel Conditions

Non-line of sight

Mobility Fixed

Bit Rate Up to 75Mbps at 20MHz channelization

Modulation OFDM 256, OFDMABPSK, QPSK, 16QAM, 64QAM

Channel Bandwidths

Selectable channel bandwidths between 1.75MHz and 20MHz


Fixed WiMAX (802.16-2004) Market Landscape

Target Market• Underserved and rural areas where DSL & cable modem fall

shortCompetition• A handful of semiconductor companies competing for

worldwide market shareDeployments• The first wave of product development and deployment by

companies shipping proprietary OFDM-based systemsApplications• From WiFi hotspot backhauling to home gateway to test

equipment, and more will surface in the futureDeployment 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


Fixed WiMAX Business ModelSupporting 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


Mobile WiMAX (802.16e) Market LandscapeCompeting 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 sharesStandard Status• The 802.16e 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 2007


Mobile WiMAX Business ModelSupporting Frequency Bands• May be only in the licensed frequency band for performance

and regulatory reasonsApplications 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 802.16e (the success of WiBRO

may or may not imply the same degree of success for 802.16e)


Interplay of the WiMAX Ecosystem

ODM(Original DesignManufacturers)Baseband SoC

ProviderRFIC

Provider

Component VendorsOEM(Original Equipment

Manufacturers)

System Makers

Subscriber Stations

Subscriber Stations

Base StationsSubscriber Stations

OEM EngagementCost Optimization

Cost Optimization


WiMAX Competitive Strengths

Bridge the information gap between developed and developing nationsOffer carriers and their customers more options to choose from, depending on their business models and lifestylesSupport both point-to-point and point-to-multipoint broadband wireless accessLower network investment costs compared to 3G, DSL or cable-modem-powered networksOperate in licensed (2.5GHz, 3.5GHz) and license-exempt (5.8GHz) radio spectrums, and other potentially lower frequency bands (700MHz – 900MHz)


A Myriad of WiMAX Applications

More Applications Underway

CellularBackhauling

Use Set-Top Box as- WiFi Router

- PVR- Others

DistributedVideo Gaming

Public Safety- Fire Department

- Hospital- Others

Remote Casino Gaming

Off-SiteSeminars/Training

Long-DistanceInteractiveAdvertising

ResidentialGateway

VoIP-basedVideo Conferencing

Emergency- e911

Campus-CampusCommunications

TV Programs &PPV Broadcasting

Remote Tax Filing

HomelandSecurity

Remote Test Data Measurements

WiFiBackhauling


WiMAX Deployment Milestone –Fujitsu’s Perspective

2006 • Fixed WiMAX system plug fests and network trials continue• Mobile WiMAX SoC introduced

2007 - 2008 • Fixed WiMAX network deployment continues• Mobile WiMAX network deployment begins

After 2008 • Fixed WiMAX network deployment continues• Mobile WiMAX network deployment progresses

2005 • Fixed WiMAX system plug fests and network trials start


Why WiMAX Will Succeed

Standards-based broadband wireless technologyMore available spectrumNon-line-of-sight requirement Large economies of scaleRobust quality of serviceStrong interest and project starts from global service providers and operatorsLong-term standards-compliant SoC commitments from major heavyweights

All Leading to Mass-market Adoption by the Average Consumer


The “Win-Win” Economic CycleWiMAX-enabled Broadband Wireless Market

@Component level (i.e. standards-based SoC) → Lower chip costs @Board level → Lower BOM cost@Equipment level → Lower system cost @Network deployment level → Higher equipment usage @End-user level → Higher subscription number

Significant Market Adoption → Achieving Economies of Scale


Let’s Seize the Opportunity

Make plenty of affordable spectrums a realityEncourage and facilitate ongoing government endorsementsEmpower and enlist academic involvementMake WiMAX-compliant SoCs available in 2005Submit WiMAX-compliant systems to plug fest in 2005Begin trial-based network deployment in 2005


Ubiquitously Connected – Unleash WiMAX

Documents

WiMAX – Promise of Quantum Leap in Broadband Wireless ... · WiMAX – Promise of Quantum Leap in Broadband Wireless Communications Business Model Considerations George Wu Director