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The Coming WiMAX Explosion
Monday October 15, 5:12 pm ET
ByJay Somaney, RealMoney.com Contributor
I was reading an article on the WiMAX World USA conference recently held in Chicago and was not surprised at all to read that attendance at the show hit over 8,000 and that there was 50% growth in attendance and the number of sponsors and exhibitors. I think the next year will be the year of WiMAX, and companies that are focusing on providing the WiMAX equipment and service will emerge as big winners in that time.
WiMAX, aptly described as "Wi-Fi on steroids," is an emerging wireless broadband technology that offers cable or DSL-like speeds over cellular phone-like distances. At present, the average range for Wi-Fi, which is a LAN technology, is approximately 100 feet or so depending on interference and physical obstructions.
Compare Wi-Fi to the two types of WiMAX under deployment at the moment:
Fixed WiMAX (806.16d or 802.16-2004) provides for speeds up to 40 megabytes per second (Mbps) per channel from three to 10 kilometers and is mostly used for wireless backhaul or last-mile access. For last-mile access, real-world throughput is in the 3 Mbps to 5 Mbps range. Interoperable fixed WiMAX equipment certified by the WiMAX forum has been available since 2006.
Mobile WiMAX (802.16e or 802.16-2005) supports mobile clients and seamless handoffs when passing from one base station to another. It is one of the proposed standards for 4G cellular networks, providing up to 15 Mbps capacity over a cell radius of three kilometers and an average of 2 Mbps to 4 Mbps per user.
I believe that WiMAX is a potentially disruptive technology for DSL and cable, not only because of the faster data speeds it can provide over current 3G networks (extensively used in emerging countries like BRIC), but also because of the new business models that will emerge, bettering the current standard subsidized handsets, plus fixed-term models prevalent in the cellular wireless industry at present.
WiMAX will also bring the same broadband experience we are used to when we use our computers to a wide variety of mobile devices, which will be a world apart from what we can do on our phones at the moment. However, early WiMAX growth will be driven mostly by laptops, as they remain the best portable devices (at present) to access the Internet.
Intel is embedding WiMAX into its Centrino mobile platform beginning in the second half of 2008. When the company launched the Centrino Wi-Fi laptop in 2003, a mere 15% of laptops had Wi-Fi capability vs. virtually 100% of laptops embedded with Wi-Fi today. I believe WiMAX will see similar adoption rates as Wi-Fi did, and in the same timeframe as well.
WiMAX handsets will also be available from Motorola , Nokia and Siemens in the latter half of 2008.
At the WiMAX World conference, MOT unveiled a number of customer-premise equipment (CPE) modems that will act as WiMAX gateways providing local Wi-Fi (or Ethernet) and VoIP connectivity to existing devices in the home.
By the end of this year, research firm iSuppli estimates that global WiMAX subscribers will be around 2 million, but that number will grow to more than 9 million by the end of 2010.
There are three small Canadian companies that are potentially big beneficiaries from the emergence of WiMAX, beginning with Tranzeo Wireless Technologies, DragonWave and Redline Communications. Of the three, only Tranzeo has been, and is, profitable. I will profile the three companies separately later this week.
Until the next time, happy investing. |
