10/30/2007 -- Last week, Cisco Systems Inc. decisively threw its hat into the WiMax arena, announcing an agreement to purchase Navini Networks Inc. -- a developer of mobile WiMax solutions -- for approximately $330 million in cash.

Navini brings a lot to the table, including patented beamforming technologies, beamforming and MIMO IPR, and more than 75 customers.

For this reason, analysts are gung-ho on the acquisition, which they say gives Cisco a much-needed WiMax shot in the arm.

"[W]hile confirming Cisco's commitment to carrier-deployed wireless, the deal broadens Cisco's revenue base with a proven WiMax player," wrote Peter Jarich, a research director with consultancy Current Analysis.

But at the same time, he added, Cisco's WiMax strategy probably still needs some additional fleshing out.

"Yet, while Cisco is getting into WiMAX at the right time -- before competitors secure incumbency but after momentum has been built -- its market focus on the developing world is rather narrow and the company's ability to execute on product and service synergies is still unproven," Jarich said.

According to Jarich, Cisco's Navini acquisition is a departure of sorts for the networking giant.

"[D]espite a longstanding focus on mobile networking, the company has not traditionally participated in the radio access network," he pointed out. "Where municipal WiFi products have given Cisco experience with wide area wireless, WiMax gives it products aimed at service providers, and not just in the core or service delivery segment of the market."

There's a further wrinkle here, too, added Jarich: "[W]ith 2G and 3G dominated by a handful of network vendors, as a new technology, WiMax represents one of the few opportunities for Cisco to get into the space...[Y]et, as competitors build market traction the window of opportunity is clearly limited."

On the whole, industry watchers see the acquisition as a good thing for both Cisco and Navini.

"[O]n its own, Navini had limited market reach or market power -- it was a small company with roughly 260 employees competing against players like Motorola, Samsung, Alcatel-Lucent, Nortel and Nokia Siemens Networks," Jarich said. "Cisco bolsters the company's prospects with added resources -- [for example] sales, marketing [and] support -- though it remains to be seen how well Cisco can execute on the opportunity." --Stephen Swoyer