nications industry bubble syndrome.
hit some significant hurdles. The danger in this is that,
with such hype, the bubble could burst with disastrous
effect to the progress of the market in general and also
the manufacturer community. ABI Research contends
that a full and frank understanding of some of the
emerging challenges facing this market will provide a far
more realistic sense of expectation and, therefore, a more
measured approach to assessing the relative success and
failure of this market's development.
others. Network management, network interface and
architecture, interference, cost, scale and feature sets are
subjects that are plain for all to see and have been discussed
at great length over the past 12 months. However, there are
four "side" issues that rarely make the agenda and should
be viewed with great diligence; Intellectual property rights,
net neutrality, broadband connection quality and health
issues.
IPR environment as a whole in the cellular space is currently
subject to huge amounts of upheaval as companies jockey
for position in the notion of winning a strong position that
can be leveraged into the coming 4G market, but also with
a view to improving their stakes in the developed CDMA
dominated world of 3G. The femtocell itself is a curious
object in that it falls somewhere between that of a handset
and a basestation.
make money out of IPR licensing as it would be ludicrous to
envisage them turning down another revenue stream. The
problem arises in that the already squeezed OEM community
that is actively forward pricing to meet carrier-driven price
points, will be squeezed yet further. As a result, this could
entail OEMs having to raise the cost of their devices in order
to maintain some inkling of profitability and thus price
themselves out of the running with a lot of carriers plans.
in the region of 7.9%. The WCDMA portion of this resides
somewhere near 5%. The only reason this is so low is due
to the fact that the market is dominated by large OEMs with
huge IP portfolios that they actively cross license in lieu of
any royalty payment. The femtocell market is being led by
smaller OEM's such as ip.access, Ubiquisys, Radioframe,
as well as companies with little 3G IP portfolio such as
Samsung. With little of their own IP portfolio, the best these
companies could hope for would be something in the region
of 5% cumulative royalty rates, the very worst would be
above 18%, which would be a killer most certainly to some
of those smaller players. The only hope in this situation is
that IP holders will wait till the market generates significant
volumes before demanding royalties which will give the
smaller vendors time to build some position of strength and
allow carriers to lobby against this threat.
traffic from a third party service provider over its network
without significant reimbursement is one that logically
results in a "no way" response. In markets where there is
no legislation forcing net neutrality, and where traffic for
femtocell users grows exponentially over the next decade,
More realistic view will be beneficial to All