Sequans sees huge market potential in the WiMax smartphone

Beceem Communications may be rocking the WiMax dongle and customer premises equipment market in the U.S., but Sequans Communications believes it has trumped its 4G chipset competitor with its win of the country’s first 4G handset.

Sprint (NYSE:S) will launch the HTC Evo 4G this summer, kick-starting the potentially lucrative market for WiMax smartphones. And the better Sprint does in selling the Evo, the better Sequans’ once non-existent prospects for the U.S. 4G market look. The Evo is one of the first non-laptop WiMax devices on the Clearwire (NASDAQ:CLWR) and Sprint 4G network that doesn’t contain a Beceem radio, but if Sequans were only to win a single device contract, CEO Georges Karam said Sequans won the right one.

“This gives us a major footprint in the U.S. versus what Beceem has done with USB dongles and CPEs,” Karam said. “We’re going to see many more phones in the market [because of] Sprint.”

A USB dongle is a dedicated WiMax device — one dongle equates a single mobile broadband subscription. But as Clearwire builds out its 4G network, Sprint and Clearwire’s other MVNO partners will look to embed WiMax in as many handsets and other mobile devices as possible, seeking to take advantage of WiMax’s capacity and, in Sprint’s case, to offload mobile data traffic from its 3G network. Customers who buy WiMax-embedded phones will be doing so for many reasons other than 4G connectivity, which is the only reason to buy a dongle, Karam said, pointing to the millions of 3G phones sold on the market to customers who don’t necessarily sign up for a data subscription.

While the EVO is just one device, Karam said it is an important one. In landing the radio contract, Sequans not only carves a niche for itself in the handset space, but it also establishes a relationship with HTC, which will likely become one of the most important handset-makers for WiMax. Device vendor-chipset vendor relationships are important, which is one of the reasons why Beceem has done so well in the U.S., given its close working relationship with Motorola, Karam said.