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Cisco-Clearwire 'alliance' could portend much more

And what could that Cisco WiMax device be? A Flip video camera? A VoIP phone?

May 13, 2009 04:38 PM ET

Computerworld - The multiyear alliance announced today between Cisco Systems Inc. and Clearwire Corp. could be as simple as WiMax network provider Clearwire's finding a big, reliable wireless IP infrastructure supplier in Cisco.

Yet, the fact that the two companies called it an "alliance" instead of simply a supplier agreement, and that Cisco will be building WiMax gear, including some kind of mobile device, portends much more.

Industry observers came up with a few scenarios for what the expected WiMax mobile device could be. One possibility is a Flip video camera, since Cisco recently purchased the maker of the Flip, Pure Digital Technologies Inc. However, this device might work over long-range WiMax wireless and allow users to send and receive video streams or hold live video chats, said Yankee Group analyst Zeus Kerravala.

"That would be a pretty cool product," he said.

Another possibility for a Cisco mobile WiMax device is a WiMax VoIP phone. Since Cisco already has a VoIP phone that works over Wi-Fi, the networking gear vendor could easily convert the Wi-Fi radio to WiMax, said Jack Gold, an analyst at J.Gold Associates LLC.

Despite the possibilities, Cisco and Clearwire would only say that Cisco plans to introduce its first mobile WiMax device "later this year."

The companies also said that future converged WiMax and Wi-Fi devices are planned as part of the Linksys by Cisco line of consumer routers. Those products would probably be routers used in a home or small-office setting that bring in a signal from outside via WiMax and spread it through the home via Wi-Fi.

None of the financial terms of the alliance were revealed, but Cisco could earn millions of dollars by selling its 7600 series routers and optical networking gear to Clearwire to support the WiMax network rollout. However, the dollar amount would ultimately depend on how well WiMax catches on in the U.S., these analysts said.

The two companies called the alliance "multiyear" and then strongly implied that Cisco would provide infrastructure for the 80 U.S. cities where Clearwire will begin offering its Clear branded service by the end of 2010. Several analysts said that Clearwire's rollout schedule is ambitious.

One reason the announcement drew attention is that Cisco seems to be endorsing WiMax with the Clearwire alliance. However, Cisco is not closing any doors to the WiMax competitor in high-speed wireless network technology known as LTE (Long Term Evolution).

LTE will be deployed by Verizon Wireless and AT&T Inc. in coming years. As the next-generation (4G) technology favored by GSM wireless carriers that dominate wireless services globally, LTE would seem to have the upper hand in the long run.

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