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Expect a wave of Apple TV imitators waving Atheros chips

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But when you look inside the Apple TV product all that the various commentators have remarked on is the fact that it has a Fujitsu hard drive, a WLAN module, three Intel chips and an Nvidia graphics chip. No one spent time looking at the specifics of the WLAN chip and it is only when these teardown specialists take a look at what's in the new 802.11n Airport Extreme that they come up with an AR5416-AC1E Atheros chip. At that point most of the hardware junkies shrug their shoulders and say "it's a WLAN, so what?" and carry on speculating about the other chips.

But the Atheros chipset is impressive. The company says it will intercept the imminent 802.11n standard, and that it includes its patent-pending Signal-Sustain Technology operating in dual-concurrent 2.4GHz and 5GHz spectrum and featuring either a 2x2, 2x3 or 3x3 MIMO smart antenna array. Products with this chipset are known to support a huge number of separate wireless channels and Atheros says its top of the range chip will deliver up to 600Mbps combined physical data rates across both types of channels and offers real world video throughput up to 180 Mbps.

Getting MIMO on a chip and working at Wi-Fi prices is what Atheros has been working towards and it is a straight fight between the chip based commodity Atheros technologies and the system based Ruckus Wireless technologies, which are being sold to offer much the same outcome for operators of IPTV systems throughout the world, using the slightly similar Ruckus beamforming approach, coupled with packet detection and resubmission.

In the end these two technologies are slightly different. One is an off the shelf chip just right to give companies like Apple an industry lead, while Ruckus is right for Telco closed systems that spray TV all over the home using Wi-Fi, but limited to the video offerings of the telco.

In effect they are two separate strategies to exploit very adjacent technologies, and you have to ask yourself are you the kind of person that will buy a couple of boxes from an Apple store and use them for what you like or do you want an engineer to come and install a few hundred dollars worth of technology in your home and have a working pay TV system for the next five to 10 years?

On the one hand Ruckus has 90 Telcos signed up to sell its products, a kind of BlackBerry style distribution model and Atheros makes chips for just about anyone and has ended up in the Apple Airport Extreme.

It's certainly working for Atheros in that it has shipped over 100 million wireless Lan chipsets and in 2006, saw 65 per cent revenue growth to $302m. Already Atheros has made 20 per cent of its revenues from its new generation 802.11n products in the last quarter. By comparison, Ruckus Wireless has only shipped one million Ruckus BeamFlex equipped access points up to the end of 2006, so it can count itself way behind.

Clearly not very much of that Atheros revenue as yet has come from Apple, although we understand some Atheros chips were also used in the previous generation of Airport Extreme, which gadget web sites are all saying work pretty well with Apple TV as well.

But "so what", you might be heard saying. Portal Player was known to manufacture the guts of the iPod and yet along came Samsung and took that contract away from Portal Player crashing its share price and driving it into the arms of Nvidia, a deal which happened quietly last November for a net $161m.

The difference here is that Apple owned all the designs of the iPod and all the intellectual property, where there was any. In the Airport Extreme most of the intellectual property behind the ability to stream TV around a home wirelessly is provided by the Atheros chip. Sure it could also still get acquired but not because it has been disappointed, only because it's proved itself valuable and is now, for the first time in a volume product from a major consumer electronics major.

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