Access has never been Cisco Systems’ (NASDAQ:CSCO) strong point, a conclusion that the vendor itself seems to have reached by abandoning its WiMax radio business. PCWorld originally reported on Friday that Cisco had stopped developing and manufacturing WiMax base stations, and FierceBroadbandWireless today confirmed it. That leaves Cisco to focus on the area of the 4G network it is arguably best positioned to dominate, the IP core.
Cisco made a go of the WiMax market for more than two years, after buying Navini and its beamforming technology in 2007, but while Cisco racked up a few modest contract wins with its new base station portfolio, it never landed a major WiMax radio access contract, watching them go instead to Samsung, Motorola (NYSE:MOT) and Alvarion (NASDAQ:ALVR). Meanwhile long-term evolution (LTE) gained momentum as the 4G technology of choice among the world’s established wireless operators, further whittling away at the Cisco’s potential share of the overall 4G market.
Though Cisco failed to win the biggest WiMax contract to date, Clearwire’s (NASDAQ:CLWR) nationwide 4G deployment, it wound up taking home a big prize: Clearwire’s IP core contract. But that contract, while sizable, was for the backbone transport network. WiChorus, which was acquired by Tellabs (NASDAQ:TLAB) last year, beat out Cisco and 10 other vendors to supply the access service network (ASN) gateway, the first router WiMax traffic hits and the one that handles the key mobility funcationality for the larger network. Cisco appears to be making the most of its IP expertise to sell routers into increasingly data-centric mobile networks, but–at least in WiMax–it isn’t making much headway into the part of IP core that makes these networks distinctly mobile.
On the LTE side, though, it doesn’t have that problem. Last year it strengthened its 3G and LTE core portfolio considerably through its purchase of Starent Networks. Starent had already become the dominant maker of packet data service network (PDSN) gateways for the CDMA market (beating out, among others, Cisco) and it had begun making susbstantial headway into gateway GPRS serving node (GGSN) sector for high-speed packet access (HSPA) networks and into the new LTE market with an evolved packet core (EPC) win with early 4G adopter Verizon Wireless (NYSE:VZ, NYSE:VOD). For the larger LTE market, in partiular, Cisco seems well positioned to deliver both the mobile core and IP core elements to operators. And if it winds up melding Starent’s gateway technology into primary router lines, it could offer both those functions on the exact same infrastructure.