Since we last spoke with Shlomo back in March 2009, Percello have completed development of their femtocell chips and are taking orders in volume. Shlomo shares his view of the current femtocell marketplace, indicates the types of ongoing femtocell development and provides some insights into the expected takeup and commercial launch across the world.
Can you give a progress update on Percello’s femtocell chipset and its market availability? Is it now ready for true commercial launch in high volume?
Both the PRC6000 and PRC6500 are already in production – we have received our first production order which will be shipped before the end of 2009. Both chips use similar package size and identical pin assignment so they are pin compatible. The additional capacity -of the PRC6500 is achieved through higher clock rates and software.
Our chipset doesn’t need any change or fixes to meet the full HSPA specifications and we are confident that any future customer needs can be met through software updates. Since the specifications for HSPA are mature and stable, we don’t forsee any change to the requirements in the short term.
Our customers using the chipset are very happy with the performance - there is no other HSDPA (14.4Mbs) and HSUPA (5.76Mbs) solution capable of 16 concurrent calls in the market that can be shipped today.
There has been only one press announcement of any femtocell vendor adopting the Percello chipset (Ubiquisys). Are other vendors actively working with your chipset today, and when would you expect further press announcements could be made?
There are several vendors (including at least 3 big companies) and several ODMs (Original Device Manufacturers) in Korea/Taiwan who are using actively our chipset. All of them are building their platform based on PRC6000/PRC6500. Unfortunately for us, they are reluctant to make a formal press release about their vendor choice, but I believe that soon we will be able to make further announcements.
Which protocols stack vendors are working with Percello chips today? Is any femtocell vendor considering building their own for use with your chipset?
Most new femtocell developments start from an existing off-the-shelf protocol stack baseline and either do the rest by themselves or use the protocol stack vendor to support them. In today’s marketplace, you can find all the combinations.
The main protocol stack vendors today are Continuous Computing (CCPU), Aricent and Node-H.
We've heard of a large number of different femtocell vendors developing their own products. For example, Continuous Computing are claiming their 16th customer of their femtocell protocol stack. What type of femtocell products are being developed today and by what type of company (i.e. standalone femtocell vendors, OEM modules, integrated set-top box vendors).
Most of the effort I see today other than standalone femtocell or modules (driven mainly by Ubiquisys, ip.access, Alcatel Lucent, Huawei and Airvana) is by the Residential Gateway (RGW) players. They build the set-top box based on existing features and incorporate a femtocell. You can see the same effort coming also from ODMs(Original Device Manufacturers) from Taiwan, China and Korea.
Will Franks of Ubiquisys points out that there is significant complexity inside a femtocell above the chipset/basic protocol stack. Anil Kohli from NEC has highlighted the extensive handset interoperability testing needed to commercialise a femtocell. Do you think so many different femtocell vendors can survive as market volumes take-off?
There is a lot of specialist knowledge in these main 3 or 4 femtocell companies. They’ve learnt the hard way through experience of the technical knowledge required within the product. But it won’t take the same length of time for that knowledge to be developed by new entrants. It will be easier in the future because of more standardised interfaces internally inside the femtocell, such as Layer 1/2 and the Iu-h interface.
The femtocell market has no choice except to work together to create an optimal end to end solution. The challenge is to become a commodity market so that it can grow very large. This “chicken-and-egg” problem requires everyone to work together to reduce price and use common standards and only then we can achieve the volume.
The companies that will survive will be those who will be able to bring an end to end solution (Hardware with stable protocol stack integrated with the femto gateways).
When we last spoke, you provided some market estimates (2009 will be less than 500K femtocells, 2010 around 3-5 million and 2011 will be the trigger point of more than 10 million). Do you still hold this view/has anything changed?
I think these numbers are still valid although in 2009 we might reach only about 300K. We’ve heard from different sources of major operator launches in the US and China which together may account for 2.5M units in 2010 alone. Other European operators are also expected to launch, so my estimate of at least 3M in 2010 still seems reasonable.
What are operators asking for in their femtocell products today?
Some of the operators who have already been running trials are pushing really hard on the requirements for their latest round of RFPs (Request for Proposals).
They are looking for comprehensive features and an end-to-end solution. For example, I have never seen cellular operators so aggressive in their equipment procurement and so determined for this solution to be in place by the middle of next year. They are all suffering heavily with capacity shortages in many cities and don’t want to disappoint their customers, such as those with iPhones – they urgently need a workaround. Operators are pushing all elements in the femtocell food-chain to work together and be aligned.
All operators have learnt a lot from the initial femtocell market trials. Their first step was to understand the problems of launching femtocells and make it easier to accommodate other vendors. I think it is likely most of them will add one or two other femtocell products in addition to their existing model, probably something combined with their broadband service and be more of a residential gateway than a standalone femtocell.
Some operators are pushing for WiFi to be incorporated into their smartphones as standard. Why will end users choose a femtocell rather than WiFi for data in the home?
In the medium to long term, I expect most femtocells to be integrated into residential gateways with standalone femtocells being a niche market. In order to achieve this, the BoM (build of material cost) of the Residential Gateway and Femtocell is being targetted by some operators at below $100.
I think most operators will take this same approach in Europe and Japan too.
The limiting factor on data speed in the home remains the broadband internet speed. This limits the maximum rate for both WiFi and 3G services. Where the same data service is available through the femtocell, many end users will find it easier to use than setup or change their WiFi settings, especially if there is no cost saving.
What plans do you have for your next chip release? Timeframe, key attributes etc. Do you have plans for any other femtocell technologies, such as LTE, CDMA etc.
Our main next milestones is of course LTE. Some operators are asking for LTE immediately, such as in US and Japan. We forsee it will be some 3 or 4 years before mature LTE handsets are available and mature end to end solutions for LTE are ready for the real mass market.
Today, Qualcomm is the dominant player in handset chips and appears to have little incentive to push LTE while it can make more money from 3G. We’ve learned it took time for 3G to evolve – after the initial 2002 launch, the real market volume started some 3-4 years later. So it’s not clear LTE will happen in big numbers at the start. We’ll see launches in 2010 and 2011, but these will really be market trials rather than full scale deployment.
Percello plan to have a chipset available at the end of 2010 which will be combined LTE and HSPA dual-mode.
For femtocells, we think LTE will happen more slowly than expected and that 3G will give more that what you can get today.
Did you read Shlomo Gadot's earlier interview on Percello femtocells from March 2009 or our interview with Nigel Toon from picoChip, their primary competitor.