SCOTTSDALE, Ariz. – The worldwide wireless market in the developed world is approaching saturation, with carriers offering little compelling differentiation except for price points and, to a limited degree, signal quality, reports In-Stat. Mobile triple-play services (voice, video, and Internet) revenue opportunities are the most likely solution to this situation, but only when cell operators first solve signal coverage and capacity issues in the indoor home environment, the high-tech market research firm says.

“Femtocells (small cellular base stations designed for use in residential and small business environments that provide enhanced coverage at the edge of the wireless network) are a practical, near-term cure for these problems, with no practical limitations,” says Allen Nogee, In-Stat analyst. “Femtocell technology is unlikely to be superseded by another technology in the foreseeable future.”

Recent research (Worldwide Femtocell Access Point Market, 2007-2011 [1]) by In-Stat found the following:

• Worldwide femtocell subscriptions (installed devices) are expected to grow to 40.6 million by 2011.
• Femtocell end-users will reach 101.5 million over the next five years.
• Femtocell device/service pricing will be a major short-term challenge, likely requiring operator subsidization.

A femtocell is a small cellular base station designed for use in residential or small business environments. A femtocell is also sometimes referred to as a “home base station”, “access point base station”, “3G access point”, “small cellular base station” and “personal 2G-3G base station”. It connects to the service provider’s network via broadband (such as DSL or cable) and typically supports 2 to 5 mobile phones in a residential setting.  A femtocell allows service providers to extend service coverage inside of your home - especially where access would otherwise be limited or unavailable - without the need for expensive cellular towers. It also decreases backhaul costs since it routes your mobile phone traffic through the IP network.

Back in June, NETGEAR and Ubiquisys announced their collaboration to deliver a comprehensive residential gateway with integrated DSL modem, Wi-Fi, VoIP and 3G femtocell technology. This gateway device will offer mobile operators worldwide a single-box, converged solution at a competitive price. It is anticipated that the NETGEAR gateway integrating Ubiquisys’ femtocell technology will be available for operator testing by Q4 2007, with commercial availability slated for early 2008.

Last month, Ubiquisys said that the company secured B-round funding totaling $25m. The company’s A-round backers– Accel Partners, Atlas Venture and Advent Venture Partners – were joined by search engine Google in the investment. Just prior to the funding of Ubiquisys, Tatara Systems secured $8 million in additional funding to fuel the company’s growth in the femtocell market. This investment was led by Highland Capital Partners and North Bridge Venture Partners.

Tatara Systems was selected by Bell Mobility in July to provide Bell customers with a secure and seamless mobile broadband connection solution. The deal will allow laptop's to access and connect to the Bell high-speed mobile data network wirelessly through a tethered handset, PC card, WiFi Hotspot, or private WiFi network.

Motorola introduced its Linux based MOTOMAGX platform [2] last week. What differentiates Motorola from the rest of the pack is that the company is providing a complete third-party platform for developers. A whole ecosystem if you will. Since its based on open source, anyone with Linux, Eclipse and Java could write the next killer app. Along the same lines, Google is rumored to be working on a Linux based mobile phone [3]. Google probably will extend the their platform to third-party developers too.