1 International Technology Association of America (ITAA) Luncheon Presentation – June 29, 2005 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.
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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
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Ubiquitously Connected – Unleash WiMAX
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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
5Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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
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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
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Insufficient Market Adoption → Lack of Economies of Scale
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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
9Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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
10Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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
11Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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
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WiMAX Forum –The Global Community Magnet
Currently More than 250 Member Companies and More Are Joining
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WiMAX EcosystemThe Success of WiMAX Starts at the Semiconductor Level
SemiconductorProviders
Carriers System
Partners
WiMAX
RFICs Baseband ICs
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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
15Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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
Selectable channel bandwidths between 1.75MHz and 20MHz
16Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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
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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
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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
19Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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)
20Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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
21Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005
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)
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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
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WiMAX Deployment Milestone –Fujitsu’s Perspective
2006 • Fixed WiMAX system plug fests and network trials continue• Mobile WiMAX SoC introduced
After 2008 • Fixed WiMAX network deployment continues• Mobile WiMAX network deployment progresses
2005 • Fixed WiMAX system plug fests and network trials start
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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
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The “Win-Win” Economic CycleWiMAX-enabled Broadband Wireless Market
Significant Market Adoption → Achieving Economies of Scale
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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
27Fujitsu Microelectronics America, Inc. / ITAA Luncheon Presentation – June 29, 2005