Wireless Industry Analyst

Craig Mathias wrote a piece last week on 802.21, a convergence standard promoted by the likes of InterDigital and Intel. Folks at 9to5 Mac immediately saw the iPhone connection and hatched what I thought was a highly speculative story. That Apple will push this yet official standard to include WiMAX into its impending 3G iPhone, based on convenient interpretation of a series of events, is the work of a very creative mind.

For the uninitiated, 802.21 is one of the various standards being promoted for convergence. So, if the infrastructure is in place, devices using this standard will perform ‘vertical’ handovers across the standards such as WiFi, WiMAX and 3G.

Before I move on to argue why I don’t see signs of a WiMAX-enabled iPhone yet, I should mention that as a fan of the convergence movement, I would love for one of the convergence standards to succeed. The idea of an iPhone enabling this seamless mobility does sound very appealing to me. Just that I don’t see the impending 3G iPhone implementing it to include WiMAX.

Let me dissect the evidence that the 9 to 5 Mac article presents to defuse the speculation –

“In March, that company revealed it has signed-up Apple (and RIM) as a licensee for its 3G technologies….. This news generated sparks of speculation that InterDigital’s SlimChip architecture might be deployed in products from Apple.”

The license agreement between Apple and IDCC is perhaps two-fold. Firstly, it is for the 3G intellectual property. Secondly, as I have written earlier, the iPhone will most likely have Infineon’s 3G chipset. Infineon, in turn, uses InterDigital’s 3G stack for which the latter gets a per-unit royalty. I think that Infineon’s solution has InterDigital’s contribution to the baseband design. But to think that the SlimChip will be central to the iPhone based on these signs is a stretch. In any case, 802.21 support or WiMAX is independent of SlimChip. You can read more about my iPhone 3G speculations here.

“..we know Apple has aggressive sales targets for this device, and that the company plans to introduce iPhones into more territories this year; we know that some of those target countries, Russia, for example, are moving to adopt WiMax;..”

This argument perhaps makes sense when the networks are more mature. In my opinion, a WiMAX-enabled iPhone this year will have limited value if you look at the bigger picture. Putting in a WiMAX solution not only hits its margins but also delays the product launch due to the additional logistics. That does not make economic sense to Apple and may in fact counter its aggressive sales target.

“Apple’s success in bringing new technologies to market was made most clear when it single-handedly popularised WiFi technology (AirPort) when it introduced the iBook in 1999….InterDigital’s move to join the WiFi Alliance this year, followed by its move to license its 3G modem technology to a shadowy (unnamed) Asian fabless semiconductor company also passed under the radar.”

Promoting a mobile standard is a much more complicated task. With WiFi, you are talking about interfacing with the consumer directly. With mobile-phones, the effort needs the confluence of the chipset vendor, handset vendor and the carrier. Also, InterDigital joined the WiFi alliance because of the technology’s role as a key component for 802.21. Neither this nor its modem technology licensing moves should relate to the iPhone.

While the idea of WiMAX+3G is great on paper, the logistics involve high-levels of risk that Apple will be unwilling to take. Platform stability and testing issues will limit Apple’s short-term options for iPhone. Hence, Infineon and most others who have already been designed into the current iPhone will retain their places. We will perhaps see GPS capabilities, but WiMAX, in my mind, is a non-starter for this version.

This does not however preclude a convergence standard/implementation like 802.21 from being included in the iPhone. I can see utility in having mobility between WiFi and 3G as a possible trend, and perhaps as the only real seamless mobility possibility for the 3G iPhone. But even this will be met with resistance from the carriers who will fear cannibalization of their revenue stream.

In summary, based on the current evidence and the inherent technical challenges, I will have to reject any suggestion of a WiMAX-enabled iPhone in 2008. I don’t see it, even with the InterDigital connection. To be fair to Andy Space who wrote the 9 to 5 Mac article, he has made it amply clear that this is pure speculation. While I did not find his central idea or his reasons as strong, I did enjoy reading the article for what it is – another out-of-whack and sensational iPhone rumor.

(Thanks to Dan Butterfield from iPhonAsia for pointing me to this article)

[Long InterDigital at the time of writing]

• Tough times for Mobile WiMax means a field day for the proponents of the other two competing 4G technologies, UMB and LTE. With its existing relationship with Qualcomm, Sprint may migrate to UMB as and when there is a demand for 4G speeds in the market. On the other hand, LTE is very much in the running, especially if all competitors opt for the technology thereby driving their respective costs down.
  
• Sprint's focus will now be to secure the customers and build a better brand image to stabilize the future. What is the point of investing billions if it cannot guarantee a loyal customer-base!
• Companies like Motorola, Samsung and Intel that have vested interests in the success of mobile WiMax may now step in and be more proactive with the roll-outs, especially with Clearwire. Sprint perhap is also hoping that some posturing can help drive the WiMax costs down as well.

• re-inventing itself as it diversifies into new markets and product lines
• making handset vendors happy by reducing royalty rates 'somewhat' in return for a higher chipset market share.

• LTE is not a GSM technology, it is rather an evolution of the GSM standard
• WCDMA/HSDPA that serve as the link between GSM and LTE is based on CDMA physical layer. In other words, the core over-the-air interface is similar in flavor to CDMA2000
• UMB is not CDMA-based, but is rather an evolution of the CDMA2000 standard. In fact UMB and LTE are based on the same underlying Orthogonal Frequency Division Multiple Access (OFDMA) technology.
  
• This may be bad for UMB, but not entirely for QualComm.
  

• Irrespective of whether UMB or LTE, or for that matter, WiMax wins, at the end of the day, CDMA as a technology is on its way out and even QualComm knows this.
• Since the migration to UMB or LTE will have involved similar infra-structure overhauling, it makes sense for Verizon to go with LTE (I will elaborate on this in a subsequent article)

Two pieces of information over the past two days may spell some more bad news to QualComm. First came in the news that the European Union has decided to go with DVB-H patronized by Nokia. The EU wants to stick by it and maybe even make it a law to only use DVB-H for broadcast. This means that QualComm's MediaFlo is virtually out of Europe. Of course, this is not all bad since MediaFlo has gelled well with the U.S. carriers. With this news, also watch out for Sirf Technology Inc. which through the acquisition of TrueSpan has positioned itself to expand beyond the GPS market to get into the DVB-H market as well. Though their market cap is around $1.5 billion now, with GPS taking center-stage as one of the big features of tomorrow's mobiles and with DVB-H gaining traction, the company can go places, especially if it can ink some prudent GPS bundling agreements with cellular and/or WLAN chip-vendors. Another thought, as outrageous as it may seem, is that QualComm may make a bid for Sirf just for the synergy and the complementary technology that the latter can bring in. Of course, this would be at least around 3x bigger than the Flaarion acquisition.

Another piece that is most talked about today is the Sprint-Clearwire agreement to merge their WiMax networks. This is good for the WiMax proponents but is most likely a set-back for QualComm. A good possibility however is that Sprint sees this as a way to de-couple it's WiMax business (which is currently only a small proportion) and its more pervasive CDMA business. If this merged-unit is being treated as a new independent entity, then Sprint is implying a commitment to keeping alive and hence enhancing its CDMA2000 network with EV-DO and other capabilities along the 3GPP2 evolution path.

I came across an interesting article at

http://wirelessdreams.wordpress.com

where the author mentions that the future technologies may not live up to the promise of high-speed and that better user experience with iPhone V2 and 3G is only a myth. While I partially agree with arguments and that 3G won't be the panacea for all the user woes, there is some reason for the expectations.

My argument is two-folds. One is that while the GSM networks around are fairly well populated and leave little room for data speeds, the HS and other 3G networks currently rolled out are nowhere near capacity. In other words, as long as these networks are not dense, there is a possibility that the initial users (I can't give a time-frame though) are likely to get an enhanced user-experience with respect to speeds. I am implying that the infrastructure in place for 3G far exceeds the current usage and hitting the density of the GSM networks may take a while.

Secondly, the argument with WiMax, I suppose, is cheaper infrastructure costs. This means that more sectors/base-stations can be laid for the same cost thereby supporting more users/higher data-speeds for the same investment. This then can also mean higher data-speeds coming from the future generations.

This being said, I will definitely buy the author's argument when the sectors become capacity-limited or in other words when there are more users in the network than what it was designed for.