Subject: [NEXTEL-1] Antennas Help Data Quality, Minimize Upgrade Costs

From: [email-masked]
Date: Sat, 23 Aug 2003 09:58:44 -0400

Antennas Help Data Quality, Minimize Upgrade Costs

Jul 02, 2003

All the attention given to wireless networks and mobile data applications
overshadows the role antenna technologies play in driving data usage with mobile
telecom devices. However, Wireless Data News expects recent and upcoming
developments will increase the spotlight on how device antenna technologies help
grow service providers' data revenues and boost wireless users' affinity toward
data features.

The most important change in mobile device antennas is the use of diversity
architecture, which is standard in Wi-Fi network equipment and devices. The latest
diversity developments for the mobile environment improve transmission and
reception capabilities in handsets and other wireless devices by using dual
antenna inputs and outputs to create more robust signals.
Earlier diversity developments for mobile phones applied strongest-signal
detection only in the receiving, or downlink, function. However, no handsets with
diversity antennas for the uplink and downlink modes are commercially available.

Combining uplink and downlink diversity antenna technology adds as much as 10dB
improvement to the strength of signals received and transmitted by devices.  That
enhancement is especially valuable in such multi-path environments as urban
canyons, where signals bounce off of buildings; the multi-path effect causes
mobile telecom signals that are parts of the same connections to follow different
paths from their sources to their intended destinations. Without diversity
capability, a device antenna likely will receive the weakest signal rather than
the strongest, which limits the quality of the connection and drains more energy
from a device's battery.

Network products commonly known as "smart antennas" were developed for much the
same purpose: to focus signal transmissions in order to increase the quality of
connections and improve spectral efficiency (WDN, Nov. 17, 2001).
Now, mobile operators' interest is growing in new device antenna products, not
only because of the potential to grow their average revenue per user (ARPU)
levels, but also because distributing handsets with better antennas is much less
expensive than paying for network antenna upgrades. "When you modify the network,
the base station, it's extremely expensive," Russ Craig, the Aberdeen Group's
semiconductor market research director, tells WDN.

In addition, improving the performance of device antennas produces other results
similar to improving network antennas. It boosts the spectral efficiency of a
network, so service providers are able to handle more voice calls. They also can
offer data features more efficiently without increasing spectrum capacity.

Chip developer Magnolia Broadband, one of the companies hoping to capitalize on a
performance-enhancing product for device antennas, offers a dollars-and-cents
perspective of the cost difference service providers would face when upgrading
their network antennas or distributing mobile devices with better antennas.
Clinton, N.J.-based Magnolia says wireless carriers' per-subscriber costs for
upgrading their network antennas would equal $17, but would be $2 to $3 if they
have their handset suppliers integrate Magnolia's DiversityPlus chip technology in
device antennas.

"That's the message that the operators are actually receiving with warm welcome,"
says Magnolia CEO Haim Harel.
Magnolia's RF products are based on its proprietary algorithms and RF integrated
circuit (RFIC) designs. Carriers in Asian markets tested handsets with antennas
featuring its chips in 2002, and U.S. carriers are testing them this year. It
plans to begin shipping its first products for 2G and next-generation CDMA
handsets in sample quantities at the end of the third quarter. It later plans to
offer chips compatible with wideband-CDMA.

Magnolia has good reason not to launch a chip for GSM device antennas. Philips
Semiconductors, the chip-making unit of Philips Electronics [NYSE: PHG], already
dominates the market with a similar product for GSM devices. Unlike Magnolia,
Philips can deliver to device manufacturers antennas with its chip technology
integrated. Magnolia, though, must work with third-party antenna players to offer
an integrated package to handset companies. So far, it's working with manufacturer
Jazz Semiconductor, and with packaging and testing vendor Amkor Technology.

"This is not a slam dunk for Magnolia," Craig observes. "This is going to require
some work, but I think that they're pretty well-positioned to drive it forward.
The key thing is if somebody puts them into a reference design [for wireless
chipsets or operating systems]. That's really the next proof point for these
guys."

In addition, just how much more wireless carriers will pay handset vendors and
antenna players for devices with new antenna technologies is a matter of debate.
For instance, operators won't want to foot the entire bill for adding Magnolia's
chip technology to a handset model, but phone vendors won't want to absorb any of
the cost and antenna original equipment manufacturers will expect other parties to
pay.

Magnolia, however, says all the proof it needs is already known by carriers. "The
problem we are trying to solve is, each year operators need to sell more minutes
for less dollars," Harel explains. "On top of that, data services are going to
phase in. Data is not a premium service, so the charges are going to be even
smaller than that. So the capacity is becoming more and more of an issue. "The two
options are more infrastructure, or changing the other side," he adds.  "What we
are doing is enabling the carriers, for a very marginal, fractional total cost, to
double their capacity in both directions."

Making Room For Two

Laurel, Md.-based antenna player Etenna also is in the diversity game, but not in
competition with Magnolia. Etenna only offers antenna technology to be installed
inside a device, and it developed technology that enables placing two antennas in
closer proximity than otherwise possible.

Handset designers want to package multiple antennas as closely together as they
can to help keep their products as small as possible, but RF characteristics can
cause antennas to fail if they are too close to each other. If hardware vendors
want to achieve diversity capabilities with two internal antennas, they need
Etenna's offering or something similar with which to do it. Otherwise, they're
looking at products with both external and internal antennas.

"Putting two of those inside a phone is problematic when they barely have room for
one," Etenna Executive Vice President Greg Mendolia tells WDN. "That's a lot of
room to find inside a handset, where the industrial design guys are constantly
making it smaller and sexier and they're trying to put more stuff in there. If
they do have the room, it gets occupied with other electronics fast. That's really
what's been the resistance to diversity."

Etenna is working with Magnolia on integrating its chip technology, though the two
companies have not announced joint-development plans. Etenna expects diversity
antenna- enabled mobile phones featuring its internal offering and another
company's external antenna to be available by early in the fourth quarter through
as-yet-undisclosed CMDA operators in Asia and GSM operators in Europe and North
America. While the company will continue focusing on the art of internal antennas,
it doesn't expect diversity offerings to become the biggest part of its business.

"Only cutting-edge phones are going to see that," Mendolia says. I would say that
a good 90 percent to 95 percent of our business is going to be that scenario and
only 5 to 10 percent of the business this year is going to be in diversity. It
still hasn't really taken off yet, simply because of the additional costs and
room."
>>Russ Craig [email-masked]; Haim Harel, 908/735-0372; Greg
Mendolia, [email-masked]<<

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