Following our recent article on the Femtocell Product lifecycle, I thought it would be useful to map the various vendors against this and identify some of the trends and various groupings.
We picked out several key groups in the lifecycle:
chipset vendors,femtocell vendors, femtocell gateway, systems integrators and broadband/DSL modems vendors.
Femtocell Chipset Vendors
picoChip must take the credit for being the first and most vocal proponents of specialist femtocell chipsets. They've been accompanied by Percello, a startup due to produce its first chipset in 2009, and RadioFrame who've developed their own chip specifically for their own product range.
The other approach is to reuse a standard DSP chipset. Texas Instruments seems to lead the field here, have recently announced that their chip has been used by several well known vendors including Samsung and Huawei.
The tradeoff seems to be partly about time to market (which could be faster if you don't have to wait for dedicated chips to be designed, or your staff can reuse their knowledge of an existing chip) versus product cost and performance (dedicated chips are more efficent and don't need so much power). Femtocell chip vendors have addressed the time to market issue by producing reference designs in partnership with software companies who can provide off-the-shelf software stacks.
Femtocell only vendors
These have to be fast and nimble, but can be very focussed because the femto is their only product. One of the first to market was Ubiquisys, with UK-based 3Way (since bought by Airvana) pioneering around the same time. Partnerships are very important for this group - Airvana appear to have taken the view of working mainly with Nokia-Siemens, who provide a femto gateway and also a direct route to market through their own sales force.
Ubiquisys have successfully partnered with several companies, and have had specific success with Kineto/NEC. They have visibly rebranded their products with operator logos and also resold through Motorola.
In several cases, these independent femtocell vendors have provided their femtocell as an OEM module within DSL broadband modems. We've seen a few more small femtocell startups appear more recently - I believe they'll need to acquire good partnerships to be successful. Digimoc in China is perhaps a good example - focussing exclusively on a TDS-CDMA femtocell for the Chinese market, they don't yet appear to have much competition either.
Subsystem vendors, providing both femtocell and femto-gateway
These come in two flavours:
a) The traditional RAN (Radio Access Network) vendors, who already have their own outdoor and larger indoor cellsite products, but have invested in complete femtocell solutions. Alcatel-Lucent, Samsung and Huawei are the leading examples here. They can build on their existing relationships with network operators, their own sales force and systems integrators, to push these products to market. Not all RAN vendors are so keen on femtocells - Ericsson is a notable exception (limiting themselves to 2G GSM femtocells for enterprise/business use only), and Nokia-Siemens hasn't built their own femto product (but does have a femto gateway).
b) The femtocell subsystem only vendors. Often coming from a 2G GSM picocell background, these vendors may already have a successful, if comparatively small (by RAN vendor size) business. Companies such as ip.access and RadioFrame fit in this space, re-using and adapting their knowledge to 3G. With smaller sales forces, and tighter budgets, they use their expertise and specific focus on femtocells to compete with the RAN vendors.
DSL Modem Vendors
There is already a mass market in broadband internet modems, and certainly more of these deployed than cellsites worldwide. These vendors are already well established with fixed network operators, shipping tens of millions of devices annually. Most seem to have linked up with an independent femtocell (or femtocell subsystem) vendor and simply incorporated an OEM module to create a combined product. These companies can use their existing sales force and local system integration staff to promote sales and simplify installation.
I suspect that the sales channel to network operators for femtocells is still primarily through their radio network department, rather than a wireline broadband internet division, although both departments would be involved in the vendor assessment. This probably gives the traditional RAN vendors some advantage (from a sales perspective due to longer standing relationships, installed equipment etc.).
Dedicated femtocell companies would need to demonstrate that femtocell operational requirements really are radically different from existing macrocellular/microcellular radio networks. There are many more departments within the network operator affected (billing, customer care, shipping devices to customers, service activation etc.), which needs a much more co-ordinated and carefully orchestrated approach.
It can be argued that providing, shipping and maintaining customer femtocells has more in common with the DSL modem processes than traditional cellsite installation. Being compatible with, or building on, the existing broadband modem infrastructure may be seen to be as important as the femtocell radio performance.
Will femtocells simply become a standardised OEM component within the DSL broadband modem, much as WiFi is today? I think not (at least for some years) - there still remains considerable differentiation in the "smarts" required to operate effectively and provide an excellent user experience. We can also expect further innovation and additional features in femtocells in the coming period.
Dedicated femtocell chipset (specifically picoChip) seem to have been most successful with the independent femtocell vendors. RAN vendors have tended to go with a standard DSP chip from Texas Instruments. This is probably because they can reuse their inhouse expertise and software from other RAN products.
Independent femtocell vendors have aligned themselves with either Kineto or Nokia-Siemens femto gateway. Ubiquisys is unique in testing against both.
Other vendors have all gone with their own femto gateway, which presumably allows them a bit more flexibility on the femtocell to femto-gateway interface. Over time, these will converge to meet the new femtocell Iuh interface standard specified in 3GPP Release 8 (due out December 2008).
Routes to market. The major RAN vendors already have their own direct sales force. Other vendors either seem to have joined forces with large companies (Airvana selling via Nokia-Siemens, Ubiquisys and Kineto being sold via NEC), or are using their existing relationships as established 2G picocell vendors to sell directly or via other partners (ip.access, RadioFrame). In these cases, the large System Integrators can complement the specific technical expertise of femtocell vendors with the scale and wider range of capabilities required to fully integrate and launch femtocell solutions. NEC seems to be the major independent system integrator offering a pre-packaged solution, whilst other SI's such as Aricent can bring expertise on a more customised basis.
Who will win?
The wider range of technical skills and backoffice impact to launch commercial femtocell solutions will affect a wider range of departments within network operators. The traditional RAN vendors may have relationships and existing systems in place which will help specifically for technical trials. Some operators may feel that there is less risk is taking this route for rapid deployments (e.g. Huawei in Starhub, Singapore and Alcatel-Lucent at Chunghwa Telecom in Taiwan). But the dedicated focus of smaller and possibly more nimble femtocell vendors is likely to provide some compelling competitive differentiators in the long run.
2009 will be an interesting year for femtocells, that's for sure.
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