According to a recent In-Stat consumer survey, the majority of US cable telephony subscribers are happy with their phone service. Eighty-five percent of the survey respondents, all of whom were using telephony services provided by their local cable TV operator, stated that they were either “very satisfied” or “somewhat satisfied” with their cable telephony service. Only 6% stated that they were unsatisfied with their service. While most telephony service providers can boast of high customer satisfaction levels, for the cable industry, these are fairly heady numbers.
In addition to taking the pulse of cable telephony subscribers on their overall satisfaction with the service, the survey also found that:
A significant percentage of cable telephony subscribers in the US are new to the service. Forty-two percent of the respondents stated that they had just signed up for the service in the preceding 12 months.
The vast majority of cable telephony subscribers only have one line in their home. Across the country, the average number of cable telephony lines per household is currently 1.16.
Most cable telephony subscribers have never had a serious problem with their service. Seventy-four percent of the survey respondents said they had never made a service call to either fix or repair their service.
In addition to the consumer survey, recent In-Stat research on the US cable telephony market shows that there are currently 9.5 million cable telephony subscriber households in the country, which is equal to 8% of total US households. This total rose by 60% in the past twelve months.
As might be expected by the subscriber growth, cable telephony revenue growth has also been noteworthy. In 2006, US cable TV operators racked up $4.5 billion in revenues from their cable telephony services, a 66% increase over 2005 revenues.
For more details on what’s happening in the cable telephony market in the US and around the world, check out In-Stat’s “The Worldwide Market for Cable Telephony Services” (IN0703201MBS), which was just published in early April. This report is available online at:
In late calendar year 2006, Qualcomm acquired Airgo, a pioneer in applying Multiple-Input Multiple-Output (MIMO) technology to Wi-Fi. The amount that Qualcomm paid for Airgo was unclear, as its purchase price was reported together with two other acquisitions that Qualcomm made in the same timeframe. The company reported that it acquired the following three businesses for $178 million in cash: 1. Airgo, 2. RF Micro Devices’ Bluetooth assets, and 3. the assets of nPhase, a vendor of machine-to-machine products and services.
Airgo Backgrounder
Airgo, which was a Palo Alto, CA-based start-up, had successfully won over many clients with its TrueMIMO chipsets, software and reference designs. In fact, in the midst of a highly competitive WLAN chipset market filled with long-time players (like Atheros) and silicon heavyweights (like Broadcom, Marvell and Intel), Airgo managed to push its chipsets into practically every major home and small business networking vendor’s WLAN product line. Airgo was able to capitalize on these home and small business networking vendors’ desire to provide for a line of higher performance products that could generate higher margins than standard products, or even the various enhanced and “turbo” 802.11g products that were on the market at that time. Airgo brought its first generation chipsets to market in 2004, all the time providing for Wi-Fi certified interoperability with 802.11b and g products.
Two problems Airgo faced were 1. its relative success and decent revenue generation in 2004 and 2005, and 2. the release of Draft 1.0 (of the IEEE 802.11n standard) chipsets from Marvell, Broadcom and Atheros, beginning in the late 2005/early 2006 timeframe. Airgo’s revenues made it a relatively expensive acquisition target, and, at the same time, the established WLAN chipset vendors aggressively pushed out their “Draft-compliant” 802.11n chipsets, unleashing their ability to provide for volume pricing and aggressive marketing tactics in the early MIMO 802.11n arena. Although there has been much criticism around the sub-par performance of the Draft 1.0 chipsets, this early push allowed for Broadcom, Marvell and Atheros to get themselves back into the high-end, flagship products from the retail WLAN vendors, and push out Airgo from this space.
Draft 2.0 Chipset Launch
Qualcomm is expected to announce the availability of Airgo’s Draft 2.0-compliant chipsets (Airgo’s 4th generation TrueMIMO chipsets) in 2Q07. Qualcomm is hoping to capitalize on what it believes is Airgo’s significant performance advantage. From a manufacturing perspective, Qualcomm has the ability to provide for a much higher level of production efficiency and volume, and thus provide for more competitive chipset pricing. Also from a marketing and relationship perspective, Qualcomm will certainly provide a boost.
Qualcomm’s intentions with Airgo are interesting. Qualcomm views the Airgo acquisition as very strategic, and considers Wi-Fi technology as an important connectivity technology—in mobile PCs, in cellular handsets, and within the home as a wireless multimedia distribution technology.
Target Market Segments
Interestingly, Qualcomm did not acquire Airgo just to have a WLAN solution to add to its mobile phone chipset platform; rather, the company plans to address a variety of different market segments. First, Qualcomm will push into the mobile PC and access point markets, targeting both the client and infrastructure sides in order to enable the full performance enhancements of its 802.11n solution. Qualcomm will offer Draft 2.0 mini card solutions, with the vision of offering combination 3G/Wi-Fi mini cards in the future, in essence being able to free up one entire slot on the PC. Secondly, Qualcomm plans to offer Wi-Fi as part of its mobile handset chipset platform, aiming for sometime in 2008. Until then, Qualcomm will continue to push either Atheros or NXP Wi-Fi chipsets for integration into cellular chipset reference designs. (Both vendors partnered with Qualcomm on this initiative in 2005). Thirdly, Qualcomm is open to pursuing Airgo’s attempt to leverage its high-performance 802.11n solution for wireless distribution of HD content in the home, via 802.11n gateways, USB adapters for station CE devices, and embedded modules for CE devices, etc.
Qualcomm vs Intel
It is hard to imagine that Qualcomm could take market share from Intel in the mobile PC market, given Intel’s tight tie-in of its Wi-Fi module to its mobile processor platform (i.e. if a PC OEM does not take its Wi-Fi module, it cannot utilize the name of the mobile processor platform within its marketing around the specific solution). One factor affecting Qualcomm’s decision to jump into Wi-Fi has been the desire to become a major supplier of wireless connectivity solutions to PC OEMs. Qualcomm’s vision is to push the integration of Wi-Fi and 3G/4G onto a mini card, while Intel, comparatively, is pushing the integration of Mobile WiMAX and Wi-Fi onto to single mini card.
Qualcomm wants to ensure that it will have a large stake in supplying wireless connectivity solutions for the converged handset/mobile PC devices of the future. Since it already is a dominant supplier of wireless connectivity solutions for mobile handsets, a presence in the mobile PC market would place Qualcomm in an excellent position to satisfy this emerging market with its wireless connectivity solutions.
Qualcomm and Wi-Fi in the Home
One challenge Qualcomm will have to overcome is Airgo’s relative disappearance over the last year or so from the chipset market. Atheros, Marvell and Broadcom have now been refining their Draft n chipset solutions for about 18 months now, each having share in the retail space, for wireless routers and external cards. All have been licking their lips over the possibilities for embedding 802.11n into home gateways, especially Atheros, who has been concentrating on this space. Ralink, a Taiwanese chipset vendor, has even announced a Draft 2.0 802.11n chipset. Surely, this market is extremely competitive. But, this market may be where Qualcomm really leverages Airgo’s high performance characteristics.
Conclusion
Undoubtedly, Qualcomm’s push into the Wi-Fi chipset space is the most exciting thing to happen in the space for a long time. As the technology has matured, the number of chipset vendors has decreased. Many times, start-ups have been swallowed up by bigger companies, never to surface again. But at least this time, Qualcomm seems to want to carry on Airgo’s legacy, its commitment to high performance and the distribution of high bandwidth content in the digital home, and will even battle it out in the mobile PC space.
Be sure to check out all of In-Stat’s WLAN research online at:
After two years of promises, and a few false starts, it finally looks like Wireless USB products will hit the market in 2007. The first products to arrive by the middle of this year should be dongle and wireless hub pairs that will bring standardized wireless connectivity to notebook and desktop PCs, PC peripherals, and consumer electronics. As with wired USB, PCs will adopt Wireless USB first, before the technology spreads out to the rest of the PC ecosystem.
Wireless USB, or more properly Certified Wireless USB, is a standard that was approved and is governed by the USB Implementers Forum (USB-IF), the same body responsible for Wired USB. Certified Wireless USB is based on the WiMedia version of Ultrawideband (UWB). WiMedia’s UWB flavor is in turn based on multiband orthogonal frequency division multiplexing (MB-OFDM), which allows for frequency-hopping to avoid interference with other wireless protocols within UWB wide frequency spectrum of 3.1 – 10.6 GHz.
The quest to develop Wireless USB solutions has created a few casualties along the way. Freescale Semiconductor, which was marketing its own version of Direct Sequence (DS) UWB technology for its own Cable-Free USB standard, was unable to offer UWB chips economically enough to meet its customers requirements. The company has ended its Cable-Free USB efforts, while its DS-UWB effort remains up in the air.
The next step in the evolution of Certified Wireless USB will be integration into PCs, as well as PC peripherals and consumer electronics. This will replace dongles and wireless hubs with integrated, or in-the-box solutions. A few notebook PCs will ship with integrated solutions by the end of 2007. A few printers and digital cameras will ship with integrated Wireless USB by the end of the year as well. Wireless USB will serve as a differentiating feature for these higher-end devices.
Overall, In-Stat expects explosive growth for Wireless USB devices, with annual shipments increasing at over 250% per year between 2007 and 2011, though starting from a very small base in 2007.
Please keep and eye out for In-Stat’s annual USB report, which will be available soon online at:
