Cisco (Nasdaq:CSCO) Leaves WiMax Radio Business


Saturday, March 6th, 2010

Cisco (Nasdaq:CSCO) announced that it will no longer develop or manufacture the WiMax radio business and will instead focus on the Internet Protocol (IP) networks placed in the back of them.

When Cisco acquired Navini Networks in 2007, they were looking at the WiMax RAN equipment they developed as a means of offering emerging countries broadband Web access via WiMax.

Although at this time the business is a good one for the company, most industry watchers concur that Long-Term Evolution (LTE) will be the leader in 4G mobile technology, so getting out now is a good move, even though they're making money on it.

"Cisco's mobile strategy has always been to provide a radio-agnostic approach that focuses on the packet core and IP network, where the company can add differentiated value. After a recent review of our WiMax business, we announced a decision to discontinue designing and building new WiMax base stations and modems, and we also announced a support plan for transitioning existing customers," Cisco spokesman Jim Brady recently said.

Cisco's strength continues to be its IP equipment in this space, adn while they have a strong presence there, butting up against the larger cellular equipment providers was something they didn't want to continue on doing with the WiMax radio business.

Not only is LTE supported by the industry body backing Global System for Mobile Communications (GSM), but as mentioned, almost every major carrier is gravitating toward it now or is already implementing it.

Now that they're moving out of manufacturing and developing radios, they'll use products from their acquisition in 2009 of Starent Networks, which can work with LTE or WiMax.

Analysts believe this is a good move for the company and over the long haul will work out better for them, as the LTE market is the future in the industry for some time to come.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: cisco , lte , navini networks , wimax

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