Cisco Wants WiMax

Cisco (CSCO) is kicking tires in the WiMax lot, and not necessarily those of the established names in the emerging field.

The San Jose, Calif., networking giant is close to a deal with closely held Navini Networks, according to people familiar with the company and a report in Unstrung, a wireless tech industry publication.

The deal would mean that Cisco has passed on acquisition plans for other WiMax players including Alvarion (ALVR) and Airspan (AIRN). Both were seen as likely targets.

WiMax, known formally as 802.16 or Worldwide Interoperability of Microwave Access, is a wireless technology that is not fully standardized. The conventional industry thinking had held that WiMax would offer broadband access to mobile devices in what would represent a fourth-generation wireless technology.

But WiMax service providers such as Clearwire (CLWR) and Sprint (S) have encountered investor backlash as the effort falls short on a viable growth plan and sales momentum.

Cisco's interest in the technology does not indicate a sudden shift in fortunes for the sector, says Free Sky Research analyst David Gross.

"Cisco likes to be able to offer just about everything," says Gross. "This would be just one more hole to fill in the product line."

Observers say that, while the hype around WiMax as a massive 4G success has cooled off considerably, the application may make sense for Cisco as it attempts to add strength to its business WiFi gear.

Cisco shares fell 22 cents to $32.70, Alvarion shares rose 15 cents to $12.50 and Airspan stock was down a penny to $2.50 in midday trading Monday.

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