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Not much chance say two analyst firms. But it could nicely co-exist reckons a third…
Two recent analyst reports pooh-pooh the idea that that mobile WiMAX – IEEE 802.16-2005 (nee IEEE 802.16e) – could knock the stuffing out of 3G cellular. A third sees a harmonious co-existence.
According to IMS Research, WiMAX could garner 13mn users by 2010, a figure that the company says is far lower than the technology’s most ardent supporters claim. In this reading of the runes the technology faces an uphill battle to gain adoption as it confronts competitive technologies (aka 3G) and delays to market. WiMAX mobile version commercial deployments are not expected until 2007 thus giving incumbent cellular operators a head start in the mobile data market with competitive technologies.
IMS observes that mobile operators are in the process of deploying, or have committed to deploying, high speed downlink packet access (HSDPA), high speed uplink packet access (HSUPA), and evolution data optimised (EVDO) services in the most lucrative markets around the world. These conclusions and others are contained in 'The Worldwide Cellular Infrastructure Report - 6th Edition'.
Report author, Carlos Guzmán, states that he "…expects 802.16e adoption to remain low for the rest of the decade. The current economics for 802.16e do not favour mass deployments of this technology as a standalone competitor versus cellular in the near future. By the time 802.16e is ready to be deployed the only markets where it will not be facing established competitive technologies is in developing markets, which are still mostly interested in voice service and basic data needs such as SMS, that current cellular standards are able to satisfy … without the added investment to launch a brand new network that WiMAX entails". Guzmán adds: "These markets have ARPUs that range of $10 to $15, making it a difficult business proposition to recoup their investments".
Looking at the WiMAX chipset business the In-Stat market research concern reaches a similar conclusion. Here the feeling is that while IEEE 802-2005 has enormous potential, as it promises to satisfy a strong demand for ubiquitous mobile broadband, competing technologies already have plenty going for them. Uncertainty about the prospects for WiMAX is such that the market research firm hedges its bets with forecasts that the WiMAX chipset market could be as high as US$950mn in 2009 or as low as US$450mn in the same year.
"Competing technologies include 3G technologies on the cellular side (EV-DO Release 0, A, and B; HSDPA) and Wi-Fi (coupled with wireless mesh networking and MIMO enhancements within 802.11n) on the networking side", says Gemma Tedesco, In-Stat analyst. "Persuading the large service providers to build infrastructures to support WiMAX will be the key for WiMAX boosters, especially convincing cellular operators, who already have built out expensive 3G infrastructures".
In-Stat's 'WiMAX: Wireless Super-Chips' report also found:
· despite tremendous hype around WiMAX, the WiMAX chipset market has a relatively small number of players, as the market is quite nascent;
· there has been much innovation in WiMAX chipsets this year, with heavyweights Intel and Fujitsu releasing WiMAX PHY and MAC system-on-a-chip (SoC) solutions, along with start-ups Sequans and Wavesat, while signal processing specialist, picoChip powered the market for macro base stations chipsets, with its software reference designs;
· and Intel, perhaps WiMAX’s biggest cheerleader, has the power to drive mobile WiMAX into becoming a standard embedded feature within mobile PCs, as Intel did with Wi-Fi in its Centrino mobile platform.
Over at ABI Research, the judgement is that earlier WiMAX hype is being replaced by WiMAX realism, and that the technology will be used to fill in gaps in 3G service providers’ repertoires.
This company recollects that when its previous annual study of WiMAX was published at the end of 2004, the new wireless broadband technology was touted as being capable of 75Mbits/s speeds at distances up to 48 km. According to ABI Research's latest WiMAX study- 'WiMAX: The Market for 802.16-2004 and 802.16e' – much of that hype has been replaced by a more sober assessment of WiMAX's performance and role. "Those who made extravagant performance claims were just trying to get the wheels of the WiMAX bandwagon moving", ventures the study's author, senior analyst Philip Solis. "Today, most commentators have no problem admitting that real-world speeds, depending as they do on the number of users per base station sector and their distance from the base-station, will be far slower than media reports had previously suggested".
According to ABI, some now question the need for WiMAX at all, certainly for 802.16e mobile WiMAX. In a recent press statement, another ABI Research analyst, Alan Varghese, voiced this concern: since they appear to meet many of the same demands, do we really need both cellular services and WiMAX?
In reply, Solis says: "Mobile WiMAX will eventually form part of cellular providers' networks, alleviating network congestion in urban areas. Providers will use it to offload part of the data traffic. At the same time, WiMAX is becoming a stepping-stone to 4G mobile services, which will be based on related technologies."
Which are almost the same arguments used to justify and describe the deployment scenario for 3G in the first instance.
John Williamson
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