ABI Research Observes Wireless Infrastructure Metamorphosis.

OYSTER BAY, N.Y. -- The wireless infrastructure industry is in a period of metamorphosis. It is characterized by a shift from hardware-oriented base station manufacturing industry to one based on software and services.

"The base station hardware isn't the 'big thing' any more. Those are all becoming software-reconfigurable," says Ray Jodoin, principal analyst of wireless infrastructure research at ABI Research. "The hottest area now is whatever you use to carry messages, route messages, and attach value to them."

That is why, according to Jodoin, about a year ago, Alcatel bought WaterCove Networks: they had the kinds of technology that the coming wave of infrastructure would require. "Now," he adds, "everyone is attempting to do the same thing: it's becoming an important part of the value chain for service providers."

To examine this market, ABI Research has launched a completely restructured Wireless Infrastructure Research Service, a suite of annual subscription products focused on wireless infrastructure markets. It contains eight annual research reports on various aspects of the sector, two user-searchable industry databases and one forecast database, four quarterly "market updates", and three special reports examining developments in the world's fastest-growing region, Asia. Subscribers also receive analyst support time.

One result of this change from hardware to software - the kind that allows a base station to be upgraded from GSM to GSM-EDGE just by downloading and installing certain algorithms - is turning out to be enhanced profitability for most hardware vendors in the space.

However, Jodoin warns, they face incoming competition from abroad, notably from two Chinese vendors - ZTE and Huawei - which may affect profitability results by the end of this year. How serious will such low-priced competition from the Far East be? That depends on the interplay of many factors, including such basic ones as China's access to industrial fuels. Underlying variables such as these are among the aspects studied in the new ABI Research Service.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations that support annual research programs, quarterly intelligence services and market reports in wireless, automotive, semiconductors, broadband, and energy. Their market research products can be found on the Web at www.abiresearch.com, or by calling 516.624.2500.