WiMAX: Why will it Stick?
Doomsayers and analysts have in the recent past rubished future prospects of WiMAX in the face of a greater acceptance (by major operator/Telecom consortiums) of its competition standard LTE. Nokia has gone to the level of stating that it was withdrawing its investments in WiMAX since it believed that WiMAX was the analogical equivalent of Betamax in the war of standards. Read the reference story and an earlier post on this subject.
A recent market survey by Maravedis, “WiMAX and Broadband Wireless Access Equipment Market Analysis, Trends and Forecasts, 2009-2014,” has come up with a few interesting and noteworthy points on the viability of WiMAX as a technology standard.
1. Inspite of a tough year 2008, and a growing buzz about the 3GPP backed LTE being the telecom standard, the WiMAX ecosystem experienced a healthy growth in 2008 and mobile WiMAX has made significant inroads (although short of targets)
2. Over 1.2 million WiMAX complaint CPEs and embedded chipsets supporting mobility were shipped in 2008. MIMO mobile WiMAX devices being a new entrant into the market the previous year, new deployments in various regions worldwide created a substantial market for MIMO mobile WiMAX terminals and infrastructure equipment. Expansion of existing WiMAX networks and conversion of some existing networks from fixed to mobile WiMAX has also contributed to these numbers.
3. Contrary to belief, WiMAX equipment demand didnot taper and operators continued rolling out infrastructure, sourcing terminals and adding new users using 802.16d – 2004 technology. CPE shipments reached 880000 in 2008.
4. US $145 was the ASP of a mobile WiMAX device during 2008 and by the year end USB dongles were selling at prices between $60-70 for high volumes.
5. Mobile WiMAX devices shipped in 2008 were mainly indoor units.
6. 40% of mobile WiMAX devices had embedded VoIP capabilities and about 7% had other advanced functunalities such as WiFi. USB dongles accounted for 34% of total shipments and were operating almonst all in the 2.3GHz and 2.5GHz spectrums.
7. Korean vendors (Muyngmin, Modacom, Samsung) accounted for 36% of all mobile WiMAX terminal shipments. Taiwanese vendors (Zyxel, Asus, Gemtek, AWB) accounted for 25% of terminals shipped.
8. WiMAX market infrastructure: Alcatel-Lucent, Samsung, Alvarion and Motorola were the key suppliers of WiMAX equipments and 151,000 sectors were shipped at an ASP of $11,500 generating $1bn in revenues.
9. In the Chipsets makers, the market was dominated by Beceem, GCT and Sequans. Intel and Runcom had a stake in the Wave 1 devices capable of MIMO operations and with very limited support of mobility. Samsung’s own chipset solution gained 7% of the market share.
10. In light of recent technical and commercial wins by LTE, WiMAX is not certainly an all conquering solution, but Maravedis predicts that there will be an accumulated 75 million WiMAX subscribers by the end of 2014. Service revenues generated by BWA will reach US$15 billion in 2014 and WiMAX equipment market will reach an annual US$4 Billion in 2014, from over US $2 billion at the end of 2008.
What the report seems to be poiting at it that, though LTE has the backing and auspices of a majority, it is unlikely that LTE would deploy sooner than 2012. That gives WiMAX a 3 years headstart and it could greatly benefit WiMAX since, Proprietary and fixed WiMAX equipment markets will continue to grow organically to meet the needs of WISPs and vertical segments. These 3 years and the market traction would become a strong foothold for WiMAX in the face of competition from LTE as the 4G Tech Standard. WiMAX may not be the winner ultimately, but given its earlier time to market, it will not be the looser as well. The eco-system will thus have both tech standards and rightly so, because there are nuances in WiMAX that LTE cant better and vice versa. In effect, there are parallel markets that could thrive under both these technologies. After all, one technology standard may not be the healthiest thing in the market.
So much so for the analysts, doom-sayers and nay-speakers for WiMAX.