Part 1, WiMax Market Update from the Field

March 03, 2006

Part 1, update by Alan J. Weissberger.

Trendsmedia and Heavy Reading have just provided new insights into the future of WiMax. In separate reports, they examine WiMax market dynamics, vendor positioning, service provider plans, and WiMax Forum activities. On March 1st, Trendsmedia held a webinar for analysts, while Heavy Reading provided selected results of their WiMax service provider study via email. Both organizations announced the availability of their new WiMAX market research reports.

The WiMAX Vendor Map 2006-7, by Caroline Gabriel, Research Director, Rethink Research Associates (author of Trendsmedia’s WiMax report):

- Traditional fixed WiMax applications include: backhaul, rural access, developing nations without a broadband infrastructure, some metrozone/municipal (but WiFi dominates this space), SME services that would otherwise need T1/E1 access.

- Competing technologies: Lots of proprietary WiMax-like broadband wireless systems and extended range WiFi. Longer life predicted for proprietary technologies, e.g. Motorola’s Canopy.

- WiMax Spectrum: Most popular frequencies are 2.1-2.3GHz, 3.5Ghz (most trials use this), and 5.8GHz.

- Factors that are contributing to an emerging market for WiMax: Start of Certification and Harmonized Profiles from WiMax Forum, Increased R&D, Performance enhancements (many start-up vendors with unique intellectual property), Promise of portability and eventually mobility.

- Considering that IEEE 802.16e will support fixed, portable and mobile, and has major vendor support, how will 802.16-2004 (WiMax fixed) survive? The answer was a suprise: Most operators that deploy 802.16-2004 will not upgrade to 802.16e! They are focused primarily on fixed wireless applications to homes and SME or on enterprise T1/E1 access replacement via WiMax backhaul. They don’t need higher performance, mobility or new handsets for their targeted applications, and therefore do not have a need to move to 802.16e.

- Vendor strategies for 802.16-2004 (fixed WiMax): Improved economics for traditional markets, Extension to consumer markets, New backhaul partnerships, Combination with Wi-Fi, Low cost CPE, Coexistence with proprietary versions of WiMax, start-ups partnering with larger OEM vendors. The key driver to extend WiMax to consumer markets will be availability of low cost laptop add-in cards and USB plug-in cards.

- Other fixed WiMax applications include: DSL extension, Cellular backhaul, Portability, and Hybrid models which combine WiMax with WiFi.

- Despite the large vendors who will enter IEEE 802.16e market (e.g. Motorola, Alcatel, Samsung), the startups are expected to dominate... initially. The leaders are expected to be IP Wireless and Navini Networks. Other new players: ArrayCom, NexNet, Flarion and Soma. Fixed market leader Alvarion is expected to migrate to IEEE 802.16e for portability and eventually mobility.

- The operator view of IEEE 802.16e: gradual shift from portability to mobility: 60% of current top 20 BWA deployments are in developing countries (but all mobile broadband operators have a presence in developed countries). Operators are more interested in portability then true mobility!

- Chip Makers: While Intel remains the quintessential cheerleader, the start-ups are now leading the market. Likely that most will not survive as independent entities, but will be acquired for their intellectual property.

- Due to the dynamic nature of the market(s), it is predicted that in one year’s time there will be a dramatic change in the WiMax vendor map.

That concludes Part 1 of this WiMax Market Update. Due to the length of this report, we will be bringing this to you in three parts over the weekend, ending on Sunday.

Part 2 will include a WiMax Forum Status Update, by Mo Shakouri of Alvarion and Part 3 will cover some of Heavy Reading’s WiMax findings.