Lang wouldn’t predict that WiMax will be Cisco’s next billion dollar market. But he says the acquisition gives Cisco an entry into rapidly growing emerging economies. “WiMax is a catalyst for the ongoing growth for these emerging markets," he says. "We’re seeing 35-45% growth rate in these markets."
The buy is a milestone, following hot on the heels of the ITU's endorsement of WiMax as a 3G standard. Cisco benefits with a quick entrance into the market, with an already well-known equipment vendor and early proponent of mobile WiMax, “where the future of the standard lies,” says Daryl Schoolarm, senior analyst at In-Stat. And there’s no overlap in the two vendors’ product lines, he adds.
Navini's mobile WiMax focus is a good fit with what Cisco can offer customers. ranging from service providers to enterprises, says Phil Solis, WiMax analyst with ABI Research. "Mobile WiMax uses a flat IP-based network as transport, which keeps latency low across the entire network, not just the wireless part," he says. "With the WiMax attach rate in laptops expected to climb very rapidly in the next few years, the wide array of devices that could embed WiMax, and WiMax's high data rate and low latency, Cisco realises that WiMax will play a big part in the overall networking picture."
There’s uncertainty if not controversy over just how successful the WiMax market will be. A recent ABI Research study predicts that by 2012, there will be about 95 million WiMax home or office subscribers and 200 million mobile devices equipped with the technology. But where the Wi-Fi market was historically a space for small vendors, the WiMax market today includes giants like Motorola and Nokia. In the United States, the WiMax network charge is being led in the multi-billion Xohm gamble by Sprint and Clearwire.
In-Stat’s Schoolar is unconvinced by one part of Cisco announced strategy, the presumed complementary fit of WiMax with Wi-Fi mesh. "I think this is a bad sign for Wi-Fi mesh," Schoolar says. "Cisco has been a significant player in that market as well, and I see WiMax as a whole negatively impacting the growth of mesh."
The acquisition, in cash and assumed options, is expected to be completed by the end of 2007.