However several key factors have negatively impacted the growth rate, including
the LTE threat, the immaturity of the WiMAX certification process, the overall
network deployment delays, and the lack of compelling devices. 

The WiMAX subscriber station chipset ecosystem is acutely fragmented, with more
than 14 chipset vendors competing for market share.  This puts pressure on
vendors with insufficient customer traction, lacking funding or scale, or
offering only partial chipset solutions.  Several early movers who entered
the WiMAX market with fixed or Wave1 mobile solutions are now shipping Wave2
compliant chipsets, mainly composed of a base-band chip and a companion RF
transceiver IC.  However, most of the available chipsets are not highly
optimized because they were compelled to cover a broad range of application
segments.

The five key WiMAX chipset vendors have introduced differentiated chipset
solutions, enabling them to gain significant leadership in their target market
segments.  However, few players have the scale to effectively address all
segments and no global leader has emerged in 2009.

Similar to WiFi or 3GPP/3GPP2 platforms, WiMAX chipset vendors have leveraged
their first or second generations to further reduce chipset cost by migrating to
a smaller geometry process node and/or by introducing monolithic dies.  At
the same time, new packaging approaches such as System-in-Package and optimized
Bill Of Material have significantly reduced the footprint of the WiMAX platform,
allowing device manufacturers to launch a new generation of products that are
more appealing, more integrated, and that combine new standards such as 3G and
4G.

The new research report released by Maravedis in partnership with Reveal
Wireless entitled "WiMAX Wave2 Subscriber Station Chipset Vendors Competitive
Analysis" provides a detailed comparison of the key WiMAX chipset vendors,
identifies system architectures, estimates chipset and system BOM, cost of
available devices such as CPEs, USB dongles or Express Cards, and analyzes
vendor product roadmaps and SWOT.  The next challenge for most WiMAX
chipset vendors will be to find the right balance of R&D investments between a
transition to LTE, and a more integrated and cost effective path for their WiMAX
solution.

Maravedis and Reveal Wireless believe that WiMAX mass-market adoption requires
ubiquitous coverage and IOT mature, sub-US$10 chipsets that are power and
performance optimized for each application-specific segment.  Three chipset
vendors are best positioned to achieve the US$10 price target through base-band
and RF monolithic die integration in 65-nm.  Further, the WiMAX market is
not large enough to support 14 chipset vendors.  Consolidations, exits and
transitions toward LTE are expected in the next two years.

The new report also provides an in-depth analysis of key WiMAX chipset vendors. 
Here is a summary of some of the key findings:

Sequans has gained performance leadership mostly in the fixed market. 
Their whole Wave2 subscriber product line supports UL transmit diversity, which
can significantly reduce the cost and power dissipation of the PA subsystem,
while improving the uplink budget.  Their solution also supports UL MIMO
(Matrix A) operation.  They clearly lead the pack in terms of chipset cost
in 2009 thanks to a very aggressive baseband die-size in 90nm.  They were
the first to announce a 65-nm single-die BB+RF solution in Q1 2009, which should
replace their base-band and RF IC SiP gap filler by 2010 and enable them to
maintain their cost leadership.

Beceem has first mover advantage in most markets, with the exception of
the fixed market where Sequans still dominates.  Beceem was first on the
market with a Wave2 BB and RF chipset.  They have one of the most mature
Wave2 Protocol Stacks, which has enabled them to gain sockets with all the
leading mobile operators.  Their product portfolio is very broad, with
specific chipset for each segment, including a single-chip base-band and RF SiP
based on a 65-nm baseband die.  They were the first to introduce a
single-chip WiMAX VoIP Network-Processing-Unit SiP in 2008.

Intel demonstrated their BOM integration leadership by introducing a
complete dual-band WiMAX RF subsystem SiP that embeds the RF transceiver, PA,
filters, switch, and power management functions.  Intel dominates in the
embedded compute segment where they have leveraged their WiFi 11n leadership,
and the strength of their Centrino brand and ecosystem.  Intel was the
first to introduce a dual-mode WiMAX/WiFi 11n 1×2 chipset based on a WiMAX/WiFi
baseband SiP and a multi-band RF transceiver IC paired with a Front-End-Module.

GCT has been the most aggressive in terms of monolithic silicon
integration, using mature 130-nm CMOS process.  They were the first to
introduce a single-die base-band and RF solution, initially for the Wibro/Wave1
market.  Their solution is currently the only Wave2 single-die in
production; they have recently added the support of WiFi 11g.  GCT won the
WiMAX World power shootout and demonstrated low-power leadership in USB dongle
and PCIe minicard applications.

Samsung Electronics has not extended its reach outside of its internal
captive chipset market.  SEC provides chipset solutions only to the Samsung
device divisions, which have a strong presence in the portable and mobile
segments with products such as data cards/USB dongles, embedded mini-cards for
Samsung laptops, MIDs and handsets.

While Runcom is focusing on niche end-to-end markets and is no longer
considered as a player in mobile WiMAX, Tier2 players such as Wavesat, Comsys,
Altair, and Mediatek could emerge and potentially challenge the leading vendors
in some specific applications.  Wavesat is bringing its programmable PHY
solution to maturity and is gaining traction in Japan with PHS OFDMA evolutions
launched by Willcom.  Comsys has been targeting multi-mode mobile markets
with an integrated Edge/WiMAX baseband SoC, leveraging the maturity of their
2.5G modem and protocol stack.  Altair has demonstrated ultra low-power
SDIO solutions optimized for the mobile market.  Mediatek is gaining
traction in the fixed market and has the expertise to emerge as a low-cost
leader when the market matures.

Pascal Deriot, Senior Analyst & Partner, WiMAX & LTE Equipment at
Maravedis, has over 20 years of multidisciplinary experience in the mobile
handset business, including semiconductors, cellular phones, and wireless
technologies.  His experience encompasses cellular phone projects and
platform management, advanced purchasing, strategic and product marketing, as
well as business development.  As a co-founder of Reveal Wireless, Pascal
has strengthened his expertise in market intelligence, publishing WiMAX chipset
vendor competitive analyses.  Prior to founding Reveal Wireless, Pascal
held various roles at Nextwave Wireless, Texas Instruments, Spansion, Micron
technology, and Alcatel-Lucent.  Pascal holds a Master in Electronics
Engineering from Ecole d’Ingénieurs des Technologies de l’Information et du
Management, Paris.

About Maravedis

MARAVEDIS is a leading analyst firm focusing on disruptive technologies
including smart networks using WiMAX, IEEE, and 3GPP/LTE.  Maravedis works
with system and service providers, vendors, regulators, and institutional
investors.  Learn more at
www.maravedis-bwa.com

Earlier this year, we interviewed Sequans executives and moderated a panel
session in which they participated (see references 1 & 2 below).  In 2010, we expect to see the Sequans SQN 1200 family of
silicon to be embedded in new types of multi-functional WiMAX
CPE, portable WiFi hot spots with integrated WiMAX radios, netbooks and (at long
last) smart phones with WiMAX based mobile Internet access.  That’s a lot to look
forward to, but there’s also promise and potential for a whole lot more.

In fact, many new and different mobile WiMAX devices are possible, including
eReaders, smart meters, multi-user portable game players, video cameras and
surveillance, and health monitoring instruments.  If the components are low cost,
highly integrated functionality, low power consumption and small size, then the
ingredients for new such new devices are in place. 

However, the key to realizing
a wide variety of devices will be a combination of several factors that are
predominantly controlled by the network operator.  Those include WiMAX coverage,
pricing plans, and business models network operators adopt with content
providers.  For example, the mobile/ portable subscriber would like wide
coverage, excellent availability, good performance, but only one bill from the
network provider-independent of the number of wireless devices owned which use
the WiMAX network.  (See Reference 3.  for more details on possible
devices for mobile broadband networks.)

Sequans Silicon Solution for Mobile WiMAX CPE and Devices

Taking advantage of Moore’s Law (to realize ever higher silicon functional
density), in house RF and mixed signal expertise, and the ever- popular ARM
core, Sequans has pulled off a tri-fecta with its latest generation of WiMAX
silicon. 

The SQN 1220 integrates a baseband (IEEE 802.16e-2005 MAC and PHY)
element, tri-band RF (2.3 – 2.4 GHz, 2.5 – 2.7 GHz, 3.3 – 3.8 GHz)
module, and an (ARM based) applications processor- all on a single
silicon die.  To an old time data communications chip architect and
microprocessor applications engineer (like this author), it’s an amazing feat!
The mixed signal processing (digital and analog) capability is especially
impressive.  Additionally, the SQN1220 implements dual transmit channels, which
enable uplink MIMO (as specified in Release 1.5 of the WiMAX Forum system
profile).  As pointed out in our first Sequans article (see Reference 1.) uplink
MIMO results in significantly increased link budget, improved cell coverage,
lower overall power consumption, and lower system cost.

The on-chip applications processor could be used for a variety of tasks,
including: SIP for VoIP, IMS and FMC functions, IP routing over the WiMAX access
network, residential gateway, diagnostics and test functions, smart meter or
instrument reading and control, user interface for a LCD screen and/or keyboard,
device commands and status indicators.  Ultimately, it will be left to the
ingenuity of the device maker to specify the software functions to be
implemented on the on-chip processor.

The SQN1210 is a single die, baseband – RF combo chip without the applications
processor.  It is designed for the smallest of mobile devices, such as mobile
handsets, smart phones, MIDs, and netbooks.  It may be used with notebook PCs
through USB dongles or ExpressCards, or directly embedded in PCI Express
MiniCards or Half MiniCards.  Zyxel has announced their use of the SQN1210 in a
USB dongle- the ZyXEL MAX-507 USB.

Care has been taken to reduce power consumption, which is a critical factor for
all mobile devices.  The SQN1200 family employs the state-of-the-art power
reduction techniques to extend battery life.  Smart software algorithms optimize
resource management for additional power reduction improvements.  The SQN1220 and
SQN1210 consume less than 350 mW of power with fully loaded MIMO traffic and
less than 0.5 mW in standby.

Sequans’ S3MAX software package includes the complete IEEE 802.16e-2005
software stack and all drivers and host applications required for a WiMAX end
system.  Host software includes drivers for all major operating systems (Windows
XP, Vista, Windows CE, MAC OS, and Linux), Sequans’ own connection manager, a
supplicant engine for EAP authentication, a fully-fledged OMA-DM client, and a
field diagnostic tool.  S3MAX also provides a full simulation and verification
environment, which can be easily customized to address specific device maker
needs.

Sequans has sampled the SQN1210 and SQN1220 chips to more than a dozen device
manufacturers who are currently developing next-generation products using that
silicon.  A wide variety of WiMAX products are now in design: USB dongles,
embedded modules for notebooks/netbooks/CE devices, multimode cellular handsets,
portable hotspots, and WiMAX CPE.  Let’s now examine the functionality of a few
of those new products.

In addition to the customers who are actively developing new products, there is
another group of manufacturers evaluating the SQN1200 family chips.  This
number is more than a dozen and is increasing over time.  Sequans expects that many of
these will convert to the ‘active development’ category above once they
recognize the value of the integration we’ve done, the performance, the small
footprint, the low power consumption, the IOT maturity, other features and
benefits. 

In 2010, Sequans expects its silicon to be inside new WiMAX CPE and mobile
devices, to be sold by many different WiMAX network operators.  Those operators
include: UQ Communications (Japan), Packet 1 (Malaysia), Yota and Scartel
(Russia), Axtel (Mexico), Unwire (Australia), Korea Telecom (South Korea), Globe
(Phillipines), Clearwire and its MVNO partner companies (e.g.  Sprint, Comcast,
and TWC).

Let’s look at a few of the new WiMAX end point products expected next year.

Multi-function WiMAX CPE

Consider that most WiMAX deployments today are for fixed broadband access-
effectively a DSL or cable modem replacement.  The SQN 1220 can be exploited in
WiMAX CPE for that application, which includes VoIP as well as a WiMAX modem
with a USB or Ethernet interface to a desktop or notebook PC.  Up until now, VoIP
over WiMAX required multiple boxes and cables.  With VoIP integrated into WiMAX
CPE there is only one box you plug your phone and PC into. 

Craig Miller, Sequans Business Development and Marketing Manager, says that
there are "about a half dozen" customers working on this type of WiMAX CPE for
2010 commercial availability.  Some of those products are currently being tested
in certification labs at the WiMAX Forum and network operators, according to Mr. 
Miller.  Sequans says their SQN1220 solution enables the WiMAX industry’s lowest
cost WiMAX CPE.

Sequans has partnered with Hellosoft to provide a very compact and cost
effective VOIP/ WiMAX capability for CPE.  They have integrated the Hellosoft’s
VOIP media engine into the SQN1220.  According to Craig Miller, " It’s a proven
set of high quality voice codecs available to customers developing VoIP CPE, and
it is available as part of our development license – customers do not need to
negotiate a separate license with Hellosoft.  Our integration effort means that
customers have less software integration and test effort to perform on their
own.  This should reduce their time to market and their development costs.  And,
since these codecs execute on the embedded application processor in the SQN1220,
the VoIP solution is extremely low cost."

Sequans CEO Georges Karam: "With Hellosoft’s VOIP media engine solution, we are
reducing complexity for our customers by offering a pre-integrated,
pre-validated VoIP and Mobile WiMAX total solution.  Adding Hellosoft’s widely
accepted and high quality voice capability to our already highly integrated chip
underscores our commitment to providing the highest performance at the lowest
cost, and to moving WiMAX toward mass market acceptance."

Opinion:  While Vonage offers a VoIP service over any broadband
connection, it would be more attractive if the WiMAX network operator offered
VoIP over (fixed) WiMAX service.  We understand that Clearwire offers such a VoIP
over (fixed) WiMAX service in all of the nation-wide markets that they are
deploying.  We believe that VoIP will have huge growth outside the U.S.  and that VoIP over WiMAX will be a very viable service if the CPE and the tariff are
reasonably priced.

4G Personal WiFi Hot Spots

Best exemplified by Clearwire’s Clearspot (made by Cradle Point), a 4G personal
hot spot is a battery powered WiFi AP/Router that fits in a briefcase.  You can
connect your notebook PC, iPOD touch, iPhone (or other WiFi equipped smart
phone), and other WiFi enabled gadgets to this portable hot spot, as long as
they are within 15 to 20 meters away.

Cisco has announced its intention to make such a unit this year.  Sprint sells a MiFi hot spot that connects to its 3G- EVDO based network.

Currently, 4G personal hotspots use a USB connection to connect to an external
WiMAX modem (AKA as a USB dongle or WiMAX dongle).  But in 2010 we expect to see
the WiMAX modem functionality integrated into the hotspot.  Mr.  Miller states, "Sequans
has several customers developing integrated WiFi/WiMAX portable hot spots." We
think this is a great idea – for both portable and in-home use.

Smart Phones with embedded WiMAX

To date, the only commercially available WiMAX mobile phone we are aware of is
an HTC device sold by Yota in Russia.  That device uses an earlier generation of Sequans silicon (the SQN 1130).  While no other WiMAX equipped smart phones have
been announced, we believe that HTC and Samsung will introduce such devices in
2010.  Sequans says that they have a couple of customers developing smart phones
with their new generation of WiMAX chips.  Obviously, they can’t disclose names
or timeframes.

Opinion: T his author independently concludes that the HTC phone will use
the SQN 1210.  We have tried to confirm this with HTC but were told that they
don’t comment on unannounced products.  We think the Sprint tri-mode phone
scheduled for next year will be from Samsung, as that company already has
produced the Mondi MID that works on CLEAR.  Furthermore, we think that the
mobile WiMAX enabled phones will use either GSM or CDMA for voice, rather than
VoIP over WiMAX.  This is because there are several problems with mobile VoIP,
including QOS guarantees, session continuity and handover/ inter-working with
cellular voice and the PSTN (or other TDM based voice networks). 

Columbia University Professor Henning Schulzrinne says,"Session continuity
between WiFi and 3G doesn’t work, in general.  I think the WiMAX problem is made
worse by the fact that initial deployments are going to be pretty spotty, so
vertical hand-off becomes more important than for traditional cellular voice."

Summary

Sequans believes they’re leading the WiMAX industry in the direction of ‘mass
market’ status, in the same way as WiFi ramped up when highly integrated
components made low cost devices and embedded interfaces ubiquitous.  The SQN1200
family is so highly integrated that it has the potential to remove cost as a
barrier to growth and adoption by device manufacturers.  This capability is
perfectly timed now that WiMAX network operators are finally showing signs of
the kind of broad coverage that could represent a very significant market
opportunity for the device manufacturers.  Sequans’ Craig Miller, "We believe
that mass market WiMAX can be a real phenomenon now – all the pieces are in
place." And we can’t disagree. 

In our opinion, Sequans is providing very valuable silicon and software
technology to the rest of the WiMAX ecosystem.  It is now up to the network
operators and device makers to exploit that technology to build a healthy
business model and move mobile WiMAX forward toward mass-market status.

__________

References

Introduction – Why Sequans?

Sequans is one of the leaders in the WiMAX semiconductor business. We suspect
this is due to their broad product line-up, excellent IC performance, and a very
pragmatic market focus. Unlike some WiMAX chip companies that only focus on a
particular class of end product (e.g. Intel on notebooks, netbooks, and MIDs),
Sequans has components that can be used for any type of WiMAX equipment, gadget
or device. They are selling chips for both fixed and mobile WiMAX, base stations
as well as subscriber units, VoIP CPE, USB dongles, smart phones, and other
devices. Indeed, the company seems to have the broadest range of WiMAX
components among all the WiMAX chip companies.

Component performance features are quite impressive. They include excellent
receiver sensitivity (which can increase link budget and/or result in lower bit
error rates), up-link as well as down-link MIMO (with 2 transmitters and 2
receivers per base band component), low power consumption (crucial for mobile
device battery life), and very high throughput per channel (for your video
apps). Many of these features can be used on a stand-alone basis, but others
(e.g. up-link MIMO) can be more effectively exploited by using Sequans
components at both ends of a WiMAX radio link, i.e. in the Base Station and
Subscriber Unit. The company is now targeting pico-base stations as a
significant growth opportunity (more on this later in the article).

Multi-country design, development and testing make a very interesting Sequans
story. The company has engineering operations in France, UK, Israel, and the
Ukraine. [There's also a business development and sales office in Cupertino, CA
where this interview took place.] Proper chip partitioning, task assignments and
co-ordination of a complex chip design are quite an accomplishment, in this
author’s opinion (he is a former datacom chip architect). IP video conferencing
is effectively used on a regular basis for design review meetings and other
co-operative engineering efforts. Based on their track record of getting product
to market, this design and development methodology works quite well. It could be
a model for other high tech start-ups.

Company History

In September 2003, seven former co-workers founded Sequans Communications. They
had previously all worked together in Paris, designing custom silicon for cable
modem termination systems at Pacific Broadband Communications- a company that
had been sold to Juniper Networks in 2001. The initial business plan was
focusing on fixed WiMAX, which at the time was being standardized by IEEE
802.16d and was the main focus of the WiMAX Forum.

The co-founders believed there were sufficient similarities between the DOCSIS
and WiMAX (IEEE 802.16d) MAC sub-layers to give them a head start. Sequans
founder and CEO Georges Karam identified the following common MAC functions:
control scheduling, uplink ranging channel, Uplink and Downlink channel maps,
bandwidth requests, grants and scheduling. The OFDM based WiMAX PHY was a
technology that the team was also familiar with from past design experiences.
CEO Georges Karam and Chief Scientist Hikmet Sari were early pioneers in OFDMA
technology for CATV networks . The Sequans engineers had also acquired analog
and RF design expertise, which proved to be invaluable in the design of the RF
front-end component of a WiMAX chip set.

Having raised 1.5M Euros in June of 2004- deemed to be sufficient start-up
capital-the co-founders hired a core group of engineers that had worked at
Pacific Broadband. The new company started designing Fixed WiMAX base station
and subscriber station chips in the second quarter of 2004. Later that year, the
802.16d-2004 standard was finalized. By October 2004, Sequans had completed the
design of an FPGA based fixed WiMAX solution that was used by equipment maker
Airspan. In September 2005, samples of the SQN2010 base station and SQN1010
subscriber station components became available.

About the same time that the Fixed WiMAX standard was finalized, Intel, KT, and
the WiMAX Forum started a campaign to accelerate standardization of OFDMA based
IEEE 802.16e "Mobile WiMAX," which could be used for either fixed or mobile
WiMAX deployments. Sequans responded to that challenge by designing the SQN1110
- Wave 1 mobile station chip (see chip scorecard chart below). This component
was available in summer of 2006. It was followed by the SQN1130 and SQN2130:
Wave 2 base station and mobile station chips for 802.16e-2005, which came to
market in March 2007 and July 2007, respectively. The SQN1130 is embedded in the
HTC smart phone being sold by Scartel in Russia (see photo).

The SQN1210 multi-frequency combo chip is the latest Sequans component. It’s an
integrated 802.16e baseband and RF chip, which promises to lower costs of
handheld WiMAX devices, such as smart phones and MIDs. We expect it will be used
in many low cost WiMAX devices.

So in less than five years of actual operations, Sequans has designed nine
different WiMAX components and got each of them working properly. That short
time from conception/design -to-market is quite impressive. But what’s even more
amazing is that all of the commercially available Sequans components worked on
the first silicon spin- a very rare feat indeed!

Fixed/Nomadic WiMAX now, Mobile WiMAX soon?

To date, Sequans is only producing WiMAX components. They hope to solidify their
strong revenue position in fixed and nomadic WiMAX while waiting and hoping that
(truly) mobile WiMAX becomes a commercial success. Fixed/nomadic WiMAX customers
include Huawei, ZTE, Alcatel, and other companies.

Editors note: We are all waiting to see real mobile WiMAX results (e.g.
deployments, subscriber growth and revenues) from Clearwire in the U.S., UQ
Communications in Japan, KT’s WiBro in Korea, Scartel in Russia, Taiwan’s WiMAX
Year One, Packet 1 in Malaysia, etc).

Sequans components are currently being used in equipment that has been deployed
in several WiMAX networks. Those include Clearwire Xohm (formerly SPRINT) in
Baltimore, MD (with Zyxel CPE), Scartel in Russia (HTC smart phone), Packet One
in Malaysia (Gemtek CPE), Reliance in India (Telsima 802.16d Base Station and
CPE), and Mobilink in Pakistan (Gigaset CPE). Here are some specific uses for
the Sequans IC’s:

• The SQN1130 chip is used in Fixed WiMAX CPE including: out door modems (ODU),
  desktop modems, VoIP modems, gateways (WiMAX + VoIP + WiFi combo)
• The SQN1130 & SQN1170 are used in USB dongles and in Embedded modules:
  mini-cards, half mini-cards, and dedicated modules (a bare die version of
  SQN1130).
• The HTC smart phone deployed in Russia uses the SQN1130.
• We expect future WiMAX smart phones and hand held gadgets to use the recently
  introduced SQN1210.

The Sequans Competitive Advantage: low cost and diversification

Mr. Karam claims Sequans’ silicon produces the lowest cost CPE for fixed/
nomadic WiMAX. He cited a WiMAX CPE box with both high-speed Internet access and
VoIP with a target cost of between $60 and $100. Those two services are being
offered by almost all of the WiMAX operates providing service to homes and small
businesses. Another example is a USB dongle (external WiMAX modem), which a
network operator often pays less then $60 for. Georges believes that CPE vendors
are using "forward pricing" to lower their prices in anticipation of greatly
increased demand from more subscribers. One key factor contributing to low WiMAX
CPE costs is the absence of IPR issues, like the royalties and licensing fees
imposed by Qualcomm, Ericsson and others for their 3G patents (a subject this
author researched for Nokia).

Diversification for Sequans currently comes from being in all types of WiMAX
markets:

• Base Station and CPE end-to-end silicon solution (see illustration below)
• 802.16d and 802.16e silicon now, 802.16m (4G version of WiMAX standard) later
  if mobile WiMAX is commercially successful

We think it’s significant that Sequans is the only chipmaker to have its
components certified for both base stations and subscriber stations for both
fixed and Mobile WiMAX. [The term "WiMAX Forum Certified?" is a trademark of the
WiMAX Forum].

New Growth Opportunities: WiMAX and LTE

Pico base stations are seen as a near term WiMAX growth opportunity for
Sequans. The larger macro base stations are much more expensive, but not nearly
as cost effective. Macro base stations support multiple sectors to realize a
large cell size (signal coverage) and to penetrate buildings for indoor use.
Pico base stations are much smaller, with much lower power consumption. While
supporting a smaller cell size with 300m to 700m range radios, more of them will
be required for a given geographical area. Up till now, smaller base stations
needed ASICs or custom VLSIs to be competitive. But Sequans hopes to change that
with lower cost standard components. Mr. Karam says that UQ and Clearwire are
currently evaluating pico base stations, which are becoming "a very strong
industry trend." The SQN2130 is being designed into pico base stations. Work has
just started on Femto Base Stations, with customers initially using the SQN2130.
Some of the Sequans customers in this space are Alvarion, ZTE and Harris-Stratex.

The company is also involved in unlicensed WiMAX – mostly a proprietary market
in Eastern Europe at 5.8GHz frequency- with Alvarion and Motorola counted as
customers. In anticipation of the US broadband stimulus funding, the company is
also investigating 3.65GHz "lightly licensed" WiMAX as an opportunity (as are
many small, independent network operators).

Beyond mobile WiMAX, Sequans sees LTE as a growth opportunity- not as a backup
plan. Due to use of OFDMA, the LTE PHY layer is similar to 802.16e-2005. Hence,
those OFDMA design aspects are being carried forward in LTE components currently
in design and expected to be available sometime in 2010. Issues for the LTE chip
design include: LTE market development (not just hype), time to market, power
consumption, and die size. An optimized LTE chip is being developed, rather than
a combo LTE/WiMAX chip as some other semiconductor vendors have alluded to.

Source: The information in this article was obtained in a "no holds barred"
interview with CEO Georges Karam and in discussions with PLM Director Ambroise
Popper, who recently participated in an IEEE ComSoc SCV 4G panel session

Part II of this article will examine Sequans strategic view of 4G mobile
networks (LTE and 802.16e evolving to 802.16m). We will also include views and
opinions of other semiconductor companies that participated in the May 13th
ComSoc-SCV panel session, moderated by this author.

Introduction – Why Sequans?

Sequans is one of the leaders in the WiMAX semiconductor business. We suspect
this is due to their broad product line-up, excellent IC performance, and a very
pragmatic market focus. Unlike some WiMAX chip companies that only focus on a
particular class of end product (e.g. Intel on notebooks, netbooks, and MIDs),
Sequans has components that can be used for any type of WiMAX equipment, gadget
or device. They are selling chips for both fixed and mobile WiMAX, base stations
as well as subscriber units, VoIP CPE, USB dongles, smart phones, and other
devices. Indeed, the company seems to have the broadest range of WiMAX
components among all the WiMAX chip companies.

Component performance features are quite impressive. They include excellent
receiver sensitivity (which can increase link budget and/or result in lower bit
error rates), up-link as well as down-link MIMO (with 2 transmitters and 2
receivers per base band component), low power consumption (crucial for mobile
device battery life), and very high throughput per channel (for your video
apps). Many of these features can be used on a stand-alone basis, but others
(e.g. up-link MIMO) can be more effectively exploited by using Sequans
components at both ends of a WiMAX radio link, i.e. in the Base Station and
Subscriber Unit. The company is now targeting pico-base stations as a
significant growth opportunity (more on this later in the article).

Multi-country design, development and testing make a very interesting Sequans
story. The company has engineering operations in France, UK, Israel, and the
Ukraine. [There's also a business development and sales office in Cupertino, CA
where this interview took place.] Proper chip partitioning, task assignments and
co-ordination of a complex chip design are quite an accomplishment, in this
author’s opinion (he is a former datacom chip architect). IP video conferencing
is effectively used on a regular basis for design review meetings and other
co-operative engineering efforts. Based on their track record of getting product
to market, this design and development methodology works quite well. It could be
a model for other high tech start-ups.

Company History

In September 2003, seven former co-workers founded Sequans Communications. They
had previously all worked together in Paris, designing custom silicon for cable
modem termination systems at Pacific Broadband Communications- a company that
had been sold to Juniper Networks in 2001. The initial business plan was
focusing on fixed WiMAX, which at the time was being standardized by IEEE
802.16d and was the main focus of the WiMAX Forum.

The co-founders believed there were sufficient similarities between the DOCSIS
and WiMAX (IEEE 802.16d) MAC sub-layers to give them a head start. Sequans
founder and CEO Georges Karam identified the following common MAC functions:
control scheduling, uplink ranging channel, Uplink and Downlink channel maps,
bandwidth requests, grants and scheduling. The OFDM based WiMAX PHY was a
technology that the team was also familiar with from past design experiences.
CEO Georges Karam and Chief Scientist Hikmet Sari were early pioneers in OFDMA
technology for CATV networks . The Sequans engineers had also acquired analog
and RF design expertise, which proved to be invaluable in the design of the RF
front-end component of a WiMAX chip set.

Having raised 1.5M Euros in June of 2004- deemed to be sufficient start-up
capital-the co-founders hired a core group of engineers that had worked at
Pacific Broadband. The new company started designing Fixed WiMAX base station
and subscriber station chips in the second quarter of 2004. Later that year, the
802.16d-2004 standard was finalized. By October 2004, Sequans had completed the
design of an FPGA based fixed WiMAX solution that was used by equipment maker
Airspan. In September 2005, samples of the SQN2010 base station and SQN1010
subscriber station components became available.

About the same time that the Fixed WiMAX standard was finalized, Intel, KT, and
the WiMAX Forum started a campaign to accelerate standardization of OFDMA based
IEEE 802.16e "Mobile WiMAX," which could be used for either fixed or mobile
WiMAX deployments. Sequans responded to that challenge by designing the SQN1110
- Wave 1 mobile station chip (see chip scorecard chart below). This component
was available in summer of 2006. It was followed by the SQN1130 and SQN2130:
Wave 2 base station and mobile station chips for 802.16e-2005, which came to
market in March 2007 and July 2007, respectively. The SQN1130 is embedded in the
HTC smart phone being sold by Scartel in Russia (see photo).

The SQN1210 multi-frequency combo chip is the latest Sequans component. It’s an
integrated 802.16e baseband and RF chip, which promises to lower costs of
handheld WiMAX devices, such as smart phones and MIDs. We expect it will be used
in many low cost WiMAX devices.

So in less than five years of actual operations, Sequans has designed nine
different WiMAX components and got each of them working properly. That short
time from conception/design -to-market is quite impressive. But what’s even more
amazing is that all of the commercially available Sequans components worked on
the first silicon spin- a very rare feat indeed!

Fixed/Nomadic WiMAX now, Mobile WiMAX soon?

To date, Sequans is only producing WiMAX components. They hope to solidify their
strong revenue position in fixed and nomadic WiMAX while waiting and hoping that
(truly) mobile WiMAX becomes a commercial success. Fixed/nomadic WiMAX customers
include Huawei, ZTE, Alcatel, and other companies.

Editors note: We are all waiting to see real mobile WiMAX results (e.g.
deployments, subscriber growth and revenues) from Clearwire in the U.S., UQ
Communications in Japan, KT’s WiBro in Korea, Scartel in Russia, Taiwan’s WiMAX
Year One, Packet 1 in Malaysia, etc).

Sequans components are currently being used in equipment that has been deployed
in several WiMAX networks. Those include Clearwire Xohm (formerly SPRINT) in
Baltimore, MD (with Zyxel CPE), Scartel in Russia (HTC smart phone), Packet One
in Malaysia (Gemtek CPE), Reliance in India (Telsima 802.16d Base Station and
CPE), and Mobilink in Pakistan (Gigaset CPE). Here are some specific uses for
the Sequans IC’s:

• The SQN1130 chip is used in Fixed WiMAX CPE including: out door modems (ODU),
  desktop modems, VoIP modems, gateways (WiMAX + VoIP + WiFi combo)
• The SQN1130 & SQN1170 are used in USB dongles and in Embedded modules:
  mini-cards, half mini-cards, and dedicated modules (a bare die version of
  SQN1130).
• The HTC smart phone deployed in Russia uses the SQN1130.
• We expect future WiMAX smart phones and hand held gadgets to use the recently
  introduced SQN1210.

The Sequans Competitive Advantage: low cost and diversification

Mr. Karam claims Sequans’ silicon produces the lowest cost CPE for fixed/
nomadic WiMAX. He cited a WiMAX CPE box with both high-speed Internet access and
VoIP with a target cost of between $60 and $100. Those two services are being
offered by almost all of the WiMAX operates providing service to homes and small
businesses. Another example is a USB dongle (external WiMAX modem), which a
network operator often pays less then $60 for. Georges believes that CPE vendors
are using "forward pricing" to lower their prices in anticipation of greatly
increased demand from more subscribers. One key factor contributing to low WiMAX
CPE costs is the absence of IPR issues, like the royalties and licensing fees
imposed by Qualcomm, Ericsson and others for their 3G patents (a subject this
author researched for Nokia).

Diversification for Sequans currently comes from being in all types of WiMAX
markets:

• Base Station and CPE end-to-end silicon solution (see illustration below)
• 802.16d and 802.16e silicon now, 802.16m (4G version of WiMAX standard) later
  if mobile WiMAX is commercially successful

We think it’s significant that Sequans is the only chipmaker to have its
components certified for both base stations and subscriber stations for both
fixed and Mobile WiMAX. [The term "WiMAX Forum Certified?" is a trademark of the
WiMAX Forum].

New Growth Opportunities: WiMAX and LTE

Pico base stations are seen as a near term WiMAX growth opportunity for
Sequans. The larger macro base stations are much more expensive, but not nearly
as cost effective. Macro base stations support multiple sectors to realize a
large cell size (signal coverage) and to penetrate buildings for indoor use.
Pico base stations are much smaller, with much lower power consumption. While
supporting a smaller cell size with 300m to 700m range radios, more of them will
be required for a given geographical area. Up till now, smaller base stations
needed ASICs or custom VLSIs to be competitive. But Sequans hopes to change that
with lower cost standard components. Mr. Karam says that UQ and Clearwire are
currently evaluating pico base stations, which are becoming "a very strong
industry trend." The SQN2130 is being designed into pico base stations. Work has
just started on Femto Base Stations, with customers initially using the SQN2130.
Some of the Sequans customers in this space are Alvarion, ZTE and Harris-Stratex.

The company is also involved in unlicensed WiMAX – mostly a proprietary market
in Eastern Europe at 5.8GHz frequency- with Alvarion and Motorola counted as
customers. In anticipation of the US broadband stimulus funding, the company is
also investigating 3.65GHz "lightly licensed" WiMAX as an opportunity (as are
many small, independent network operators).

Beyond mobile WiMAX, Sequans sees LTE as a growth opportunity- not as a backup
plan. Due to use of OFDMA, the LTE PHY layer is similar to 802.16e-2005. Hence,
those OFDMA design aspects are being carried forward in LTE components currently
in design and expected to be available sometime in 2010. Issues for the LTE chip
design include: LTE market development (not just hype), time to market, power
consumption, and die size. An optimized LTE chip is being developed, rather than
a combo LTE/WiMAX chip as some other semiconductor vendors have alluded to.

Source: The information in this article was obtained in a "no holds barred"
interview with CEO Georges Karam and in discussions with PLM Director Ambroise
Popper, who recently participated in an IEEE ComSoc SCV 4G panel session

Part II of this article will examine Sequans strategic view of 4G mobile
networks (LTE and 802.16e evolving to 802.16m). We will also include views and
opinions of other semiconductor companies that participated in the May 13th
ComSoc-SCV panel session, moderated by this author.

Introduction – Why Sequans?

Sequans is one of the leaders in the WiMAX semiconductor business. We suspect
this is due to their broad product line-up, excellent IC performance, and a very
pragmatic market focus. Unlike some WiMAX chip companies that only focus on a
particular class of end product (e.g. Intel on notebooks, netbooks, and MIDs),
Sequans has components that can be used for any type of WiMAX equipment, gadget
or device. They are selling chips for both fixed and mobile WiMAX, base stations
as well as subscriber units, VoIP CPE, USB dongles, smart phones, and other
devices. Indeed, the company seems to have the broadest range of WiMAX
components among all the WiMAX chip companies.

Component performance features are quite impressive. They include excellent
receiver sensitivity (which can increase link budget and/or result in lower bit
error rates), up-link as well as down-link MIMO (with 2 transmitters and 2
receivers per base band component), low power consumption (crucial for mobile
device battery life), and very high throughput per channel (for your video
apps). Many of these features can be used on a stand-alone basis, but others
(e.g. up-link MIMO) can be more effectively exploited by using Sequans
components at both ends of a WiMAX radio link, i.e. in the Base Station and
Subscriber Unit. The company is now targeting pico-base stations as a
significant growth opportunity (more on this later in the article).

Multi-country design, development and testing make a very interesting Sequans
story. The company has engineering operations in France, UK, Israel, and the
Ukraine. [There's also a business development and sales office in Cupertino, CA
where this interview took place.] Proper chip partitioning, task assignments and
co-ordination of a complex chip design are quite an accomplishment, in this
author’s opinion (he is a former datacom chip architect). IP video conferencing
is effectively used on a regular basis for design review meetings and other
co-operative engineering efforts. Based on their track record of getting product
to market, this design and development methodology works quite well. It could be
a model for other high tech start-ups.

Company History

In September 2003, seven former co-workers founded Sequans Communications. They
had previously all worked together in Paris, designing custom silicon for cable
modem termination systems at Pacific Broadband Communications- a company that
had been sold to Juniper Networks in 2001. The initial business plan was
focusing on fixed WiMAX, which at the time was being standardized by IEEE
802.16d and was the main focus of the WiMAX Forum.

The co-founders believed there were sufficient similarities between the DOCSIS
and WiMAX (IEEE 802.16d) MAC sub-layers to give them a head start. Sequans
founder and CEO Georges Karam identified the following common MAC functions:
control scheduling, uplink ranging channel, Uplink and Downlink channel maps,
bandwidth requests, grants and scheduling. The OFDM based WiMAX PHY was a
technology that the team was also familiar with from past design experiences.
CEO Georges Karam and Chief Scientist Hikmet Sari were early pioneers in OFDMA
technology for CATV networks . The Sequans engineers had also acquired analog
and RF design expertise, which proved to be invaluable in the design of the RF
front-end component of a WiMAX chip set.

Having raised 1.5M Euros in June of 2004- deemed to be sufficient start-up
capital-the co-founders hired a core group of engineers that had worked at
Pacific Broadband. The new company started designing Fixed WiMAX base station
and subscriber station chips in the second quarter of 2004. Later that year, the
802.16d-2004 standard was finalized. By October 2004, Sequans had completed the
design of an FPGA based fixed WiMAX solution that was used by equipment maker
Airspan. In September 2005, samples of the SQN2010 base station and SQN1010
subscriber station components became available.

About the same time that the Fixed WiMAX standard was finalized, Intel, KT, and
the WiMAX Forum started a campaign to accelerate standardization of OFDMA based
IEEE 802.16e "Mobile WiMAX," which could be used for either fixed or mobile
WiMAX deployments. Sequans responded to that challenge by designing the SQN1110
- Wave 1 mobile station chip (see chip scorecard chart below). This component
was available in summer of 2006. It was followed by the SQN1130 and SQN2130:
Wave 2 base station and mobile station chips for 802.16e-2005, which came to
market in March 2007 and July 2007, respectively. The SQN1130 is embedded in the
HTC smart phone being sold by Scartel in Russia (see photo).

The SQN1210 multi-frequency combo chip is the latest Sequans component. It’s an
integrated 802.16e baseband and RF chip, which promises to lower costs of
handheld WiMAX devices, such as smart phones and MIDs. We expect it will be used
in many low cost WiMAX devices.

So in less than five years of actual operations, Sequans has designed nine
different WiMAX components and got each of them working properly. That short
time from conception/design -to-market is quite impressive. But what’s even more
amazing is that all of the commercially available Sequans components worked on
the first silicon spin- a very rare feat indeed!

Fixed/Nomadic WiMAX now, Mobile WiMAX soon?

To date, Sequans is only producing WiMAX components. They hope to solidify their
strong revenue position in fixed and nomadic WiMAX while waiting and hoping that
(truly) mobile WiMAX becomes a commercial success. Fixed/nomadic WiMAX customers
include Huawei, ZTE, Alcatel, and other companies.

Editors note: We are all waiting to see real mobile WiMAX results (e.g.
deployments, subscriber growth and revenues) from Clearwire in the U.S., UQ
Communications in Japan, KT’s WiBro in Korea, Scartel in Russia, Taiwan’s WiMAX
Year One, Packet 1 in Malaysia, etc).

Sequans components are currently being used in equipment that has been deployed
in several WiMAX networks. Those include Clearwire Xohm (formerly SPRINT) in
Baltimore, MD (with Zyxel CPE), Scartel in Russia (HTC smart phone), Packet One
in Malaysia (Gemtek CPE), Reliance in India (Telsima 802.16d Base Station and
CPE), and Mobilink in Pakistan (Gigaset CPE). Here are some specific uses for
the Sequans IC’s:

• The SQN1130 chip is used in Fixed WiMAX CPE including: out door modems (ODU),
  desktop modems, VoIP modems, gateways (WiMAX + VoIP + WiFi combo)
• The SQN1130 & SQN1170 are used in USB dongles and in Embedded modules:
  mini-cards, half mini-cards, and dedicated modules (a bare die version of
  SQN1130).
• The HTC smart phone deployed in Russia uses the SQN1130.
• We expect future WiMAX smart phones and hand held gadgets to use the recently
  introduced SQN1210.

The Sequans Competitive Advantage: low cost and diversification

Mr. Karam claims Sequans’ silicon produces the lowest cost CPE for fixed/
nomadic WiMAX. He cited a WiMAX CPE box with both high-speed Internet access and
VoIP with a target cost of between $60 and $100. Those two services are being
offered by almost all of the WiMAX operates providing service to homes and small
businesses. Another example is a USB dongle (external WiMAX modem), which a
network operator often pays less then $60 for. Georges believes that CPE vendors
are using "forward pricing" to lower their prices in anticipation of greatly
increased demand from more subscribers. One key factor contributing to low WiMAX
CPE costs is the absence of IPR issues, like the royalties and licensing fees
imposed by Qualcomm, Ericsson and others for their 3G patents (a subject this
author researched for Nokia).

Diversification for Sequans currently comes from being in all types of WiMAX
markets:

• Base Station and CPE end-to-end silicon solution (see illustration below)
• 802.16d and 802.16e silicon now, 802.16m (4G version of WiMAX standard) later
  if mobile WiMAX is commercially successful

We think it’s significant that Sequans is the only chipmaker to have its
components certified for both base stations and subscriber stations for both
fixed and Mobile WiMAX. [The term "WiMAX Forum Certified?" is a trademark of the
WiMAX Forum].

New Growth Opportunities: WiMAX and LTE

Pico base stations are seen as a near term WiMAX growth opportunity for
Sequans. The larger macro base stations are much more expensive, but not nearly
as cost effective. Macro base stations support multiple sectors to realize a
large cell size (signal coverage) and to penetrate buildings for indoor use.
Pico base stations are much smaller, with much lower power consumption. While
supporting a smaller cell size with 300m to 700m range radios, more of them will
be required for a given geographical area. Up till now, smaller base stations
needed ASICs or custom VLSIs to be competitive. But Sequans hopes to change that
with lower cost standard components. Mr. Karam says that UQ and Clearwire are
currently evaluating pico base stations, which are becoming "a very strong
industry trend." The SQN2130 is being designed into pico base stations. Work has
just started on Femto Base Stations, with customers initially using the SQN2130.
Some of the Sequans customers in this space are Alvarion, ZTE and Harris-Stratex.

The company is also involved in unlicensed WiMAX – mostly a proprietary market
in Eastern Europe at 5.8GHz frequency- with Alvarion and Motorola counted as
customers. In anticipation of the US broadband stimulus funding, the company is
also investigating 3.65GHz "lightly licensed" WiMAX as an opportunity (as are
many small, independent network operators).

Beyond mobile WiMAX, Sequans sees LTE as a growth opportunity- not as a backup
plan. Due to use of OFDMA, the LTE PHY layer is similar to 802.16e-2005. Hence,
those OFDMA design aspects are being carried forward in LTE components currently
in design and expected to be available sometime in 2010. Issues for the LTE chip
design include: LTE market development (not just hype), time to market, power
consumption, and die size. An optimized LTE chip is being developed, rather than
a combo LTE/WiMAX chip as some other semiconductor vendors have alluded to.

Source: The information in this article was obtained in a "no holds barred"
interview with CEO Georges Karam and in discussions with PLM Director Ambroise
Popper, who recently participated in an IEEE ComSoc SCV 4G panel session

Part II of this article will examine Sequans strategic view of 4G mobile
networks (LTE and 802.16e evolving to 802.16m). We will also include views and
opinions of other semiconductor companies that participated in the May 13th
ComSoc-SCV panel session, moderated by this author.