Cisco buyout rumor mill focused on WiMAX vendor Navini

Will WiMAX drive a billion in new Cisco business?

Cisco is reported to be on the verge of closing a deal to buy a WiMAX base station vendor called Navini Networks.

A news report at Unstrung.com cited two industry sources, one named, for the pending deal. The report quoted a venture capitalist as saying that Cisco would be willing to fork over between US$200 million and US$230 million for Navini, giving the network giant a foothold in the emerging global WiMAX wireless broadband market.

Earlier rumors had indicated Cisco's interest in a flock of young WiMAX infrastructure vendors, which are wooing carriers worldwide in an effort to roll out fixed and mobile WiMAX nets. Late in September, rumors surfaced that Cisco was looking at Alvarion, Aperto Networks, and Redline Communications, as well as Navini, all with established products and a number of deployments.

Navini was founded by Silicon Valley entrepreneur Wu-Fu Chen and radio frequency expert Guanghan Xu. The company has reaped some US$160 million in venture backing as it developed and brought to market its RipWave MX line of mobile WiMAX base stations, customer premises equipment, and adapters. A particular feature is the company's patented beamforming technology that can shape and direct WiMAX radio waves, boosting range and performance.

In the United States, the two WiMAX carrier leaders are Sprint and Clearwire, which are investing billions in complementary nationwide deployments, using several WiMAX equipment suppliers. On the client side, Intel is readying a WiMAX chipset that eventually will be a standard embedded wireless interface in notebooks and other client devices.

"Cisco has been relatively mum regarding its plans in the WiMAX area and it seems as though there may, in fact, be two camps within Cisco," says Chris Silva, WiMAX analyst for Forrester Research. "One camp is pro-WiMAX and one a bit more skeptical on the technology's validity as a consumer and business wireless broadband solution."

If the Navini acquisition -- or any WiMAX infrastructure vendor acquisition -- takes place, it would be a solid addition to Cisco's suite of wireless networking offerings," Silva says. "Infrastructure vendors like Cisco would be smart to make acquisitions that broaden their ability to provide WiMAX connectivity infrastructure."

In fact, Sprint executives have explicitly said the enterprise IT market is a key focus of its unfolding WiMAX service.

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